What do you need to apply for a mortgage? | Checklist

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What do you need to apply for a mortgage?

Mortgage application checklist
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    Applying for a mortgage can be a daunting prospect, especially if you are buying a property for the first time. There are quite a few steps you need to take, so here at Simmonds Mortgage Services, we’ve made the process easier by creating a checklist for a smooth and hassle-free mortgage application.

    Mortgage application checklist

    Before you apply for a mortgage, there are several documents you’ll need to access and provide to your mortgage lender.

    Credit report

    Lenders use your credit score to assess your risk level as a potential customer. Different lenders will have different criteria. so you can’t be certain before you apply for a mortgage exactly what credit score the lender will require. However, having accurate data to give to a broker will massively help the process and you can do the following things to help achieve a good credit score:

    • Around 6-9 months before you need your formal mortgage offer, review your credit file. Correct any errors in your credit card bill payments or loan repayments in your credit history. The lender looks for evidence that you pay in full and on time and are not in arrears with your borrowing.
    • Bring any outstanding credit agreements up to date as soon as possible and ensure you do not miss or make late payments.
    • Make sure you are registered to vote at your current address.

    To see how you could improve your credit score, check out our blog.

    Proof of identity and address

    You’ll need to provide evidence of your identity. The following documents are acceptable photographic evidence: a driving license, a photo ID, a national ID card and a passport. The document you use must be valid and current. You will also need to provide a recent utility bill as evidence of your address.

    Proof of employment and income

    Mortgage lenders will ask for proof of your monthly earnings and your employment status if you are employed. You can provide at least three monthly payslips or 8-12 payslips if you are paid weekly which should show the following information:

    • Your gross pay and your net pay after deductions
    • Your name (which must match the name on your mortgage application documents)
    • Pay date and tax period
    • Any bonus, overtime or commission payments if you are using these to obtain the mortgage
    • Your employer’s name and address

    Evidence of other income

    If you are using any other incomings to get your mortgage deal, such as investment or property income, you must provide written evidence of these sources.

    This could be via bank statements for your current account showing rental payments or documents online supplied by other financial institutions that hold your investments.

    If you are including benefits or allowances such as child benefits in your application, you’ll also need to provide a recent HMRC letter of your entitlement.

    Tax returns

    If you are applying for a self-employed mortgage, you must supply evidence of your self-employed income and profits from HMRC.

    Most lenders will ask for two years of HM Revenue and Customs (HMRC) documents, commercial software tax calculations or tax reports, along with HMRC online tax year overviews to check you have a steady income and can afford the repayments.

    Proof of outgoings and expenses

    Lenders need to see your outgoing to assess whether you can meet your monthly mortgage repayments based on your normal spending habits.

    Your bank statement should clearly show your regular monthly outgoings such as rent, utility bills and credit card payments. You usually need at least three months of bank statements to back up your information about your expenses.

    Proof of deposit

    A mortgage lender must ask for evidence of where the money for your deposit is coming from as part of anti-money laundering regulations.

    If your deposit comes from your savings, you’ll need to provide your bank statement showing the money in your bank accounts.

    If someone like a parent is gifting you the deposit, you’ll need a signed letter from the person making the gift confirming whether the deposit is repayable or non-repayable.

    How can a mortgage broker help me during a mortgage application?

    When you use a mortgage broker, you can compare mortgages more easily and find the best deal for your personal circumstances.

    Get in touch with Simmonds Mortgage Services today

    Simmonds Mortgage Services works with new applicants through to seasoned buyers to help them through the application process, reducing time and frustration from sorting out your agreement in principle to completing your full mortgage application.

    We’ll help you get the best interest rate and term. Call us today on 01184 693037 to discuss your situation.

    Frequently asked questions about mortgage applications

    Which account do the bank statements need to reflect?

    You’ll need bank statements from your current bank or building society account where your salary and other earnings get paid. If your deposit is in a savings account, you must also provide this statement.

    Can you get a mortgage with bad bank statements?

    If your pay is low and your expenses are high or your bank statements show that you have failed payments, this could send a red flag to the lender about your suitability as a borrower. Keep clean bank statements for up to six months or longer to support your application.

    Do mortgage lenders check with HMRC?

    Your mortgage lender can check your income data with HMRC. If the income you use on the application does not match the records held by HMRC, your mortgage agreement, in principle, may be at risk of being retracted.

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    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

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