How can you prepare yourself to ensure your mortgage application is successful? Take a look below!
Firstly, expect to be asked detailed budget questions.
Borrowers should expect questions about not only their income but also their outgoings when applying for a mortgage. That goes beyond commitments like personal loans and credit card balances. This is because lenders need to ensure that a mortgage will be affordable, not only now but in the future when rates may be higher.
When lenders look at committed expenditure, they will break down into spending on items such as utilities, food, council tax, travel costs and insurances. Other points that can have a significant bearing on how much you can borrow are the number of dependants and childcare costs.
Lenders will also check your credit rating.
It's a good idea to sit down on a monthly basis and breakdown your spending patterns as it will give you an insight into where your money goes.
What documents are needed for my application?
Other lenders will go through bank statements in more detail and may ask for explanations of any, especially large or regular outgoings. In addition to requesting bank statements, lenders will also want to see evidence of income to back up the application.
Make sure you have the following to hand as there is a variety of different information the lender will have to check. See below:
- 3 months worth of payslips, bank statements, P60 and / or self-assessment returns if you are self-employed. This is needed to verify your income.
- Details of your outgoings; this includes things such as childcare costs. This is to allow the broker to assess your financial commitments.
- Proof of your ID and current address.
- Proof of your deposit. If this has been gifted by parents, you need to ensure that you provide their bank statement and a letter to confirm that this is a gift.
- Details of the Solicitor who is carrying out your transaction.
- Details of the Estate Agent you are buying through.
Looking for Mortgage Advice? We have a team of experts who can help! Get in touch with your local branch for more information.