If you’re thinking of re-mortgaging or buying a house, before you start looking for the right mortgage, it’s worth spending some time getting all the necessary information together. If you’re not sure what’s needed, the simple answer is every lender approaches things differently, but I can give you a good idea of what may be required.
It’s a regulatory requirement that brokers complete a fact find for every mortgage application. A fact find includes questions on employment, income, financial commitments and mortgage requirements amongst others. They can be lengthy and are not always written in ‘plain English’ meaning the questions can be confusing. This is the first stage of the mortgage process so it’s important that the fact find is fully completed as otherwise your application could be delayed. I find one of the sections frequently overlooked is address history. Every lender needs a minimum of 3 years of address history to do a full credit check.
Remember that your brokers advice is based on the information provided in the fact find, so it’s important to be as accurate as possible.
ID and address verification
As a mortgage broker I need to document to the lender that I have reviewed and checked ID and address information for each applicant. Address information is checked via certain bills and they need to be no more than 3 months old. I’ve had many occasions when the utility bills for a couple are in one name and when doing a joint mortgage this can cause delays. You should also make sure you are on the voter’s role at your current address as if you’re not, your credit score can be affected.
Some lenders will require the last 3 months bank statements from your current account to show either income or outgoings. Interestingly, the same lenders are continually asking their banking clients to opt out of paper bank statements. It can take up to a week with most lenders to get up to date statements so it’s a good idea to call your bank and request these as soon as you know you will be applying for a mortgage.
Pay slips and bonus statements
Hopefully this one is simple as we all have a vested interest in knowing what we are paid. In most cases lenders will require the last 3 months pay statements, and the last 3 years bonus statements if applicable.
This can become more complicated when you receive income in different formats, for example if you receive overtime it is important to be able demonstrate that the overtime is sustainable and regular so keep hold of bank statements.
Most lenders will require your SA302 and supporting tax overview for the last 3 years. These can now be downloaded from HMRC. On top of that some lenders may request full signed accounts to support the earned income. It is always a good idea to speak to your accountant and get all this information together.
Previous mortgage information
If you are applying for a re mortgage or releasing equity with your existing lender a broker will need your existing mortgage details including account number. If you are applying for a buy to let mortgage and you have other properties you rent, out the new lender will require all the information of your rental properties including property values, outstanding mortgages and rental income. Many of my clients in this position hold the information on spreadsheets which makes it easy to extract the numbers needed.
It is important to have solicitors in place before you put your offer in on a property. In Scotland, the solicitors will submit your offer to the estate agent so make sure you source a solicitor that is not only reasonably priced but also has some good feedback from previous clients. If you are unsure speak to your Mortgage Broker who will be able to recommend firms to you.
As with many things in life there is not a one size fits all approach with mortgages, so be prepared for the lender to request further information. This could be credit card statements if you are clearing debt, or court documents if you have maintenance income.
Always remember to stay calm, try not to worry and work with your mortgage broker to make the process as quick and painless as possible.