A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
While you can’t one-hundred per cent guarantee your mortgage application will go through, there are steps you can take to improve your chances of getting approved. In this article we explain a few simple but important steps.
Please remember that a mortgage is a loan secured against your home. Your home may be repossessed if you do not maintain repayments on your mortgage or any other load secured against it. And it is always a good idea to speak with an experienced mortgage broker who can talk you through the process, and understand the options and what they will mean for you.
Get your name on the electoral roll.
You must be 16 years or older to register to vote, unless you live in Scotland or Wales, in which case you must be 14 years old or older. In addition, you must meet one of the following criteria:
- A British citizen
- An Irish citizen living in the UK
- A Commonwealth citizen who has permission to enter or stay in the UK, or who does not need permission
- A EU Citizen with settled or pre-settled status
- A non-British/Irish/EU Citizen, with permission to enter and stay in the UK.
To register to vote, you can either go to gov.uk or fill out a paper form, which you can find on the government website.
Cut back on your expenses
A lender will likely review your last three bank statements as part of the decision-making process for lending you money. So, to improve your chances at getting approved, curb expenses and live modestly for at least 3 months prior to applying for a mortgage loan. That means skipping out on big purchases like a new sofa or home computer and even avoiding smaller indulgences like costly haircuts or holidays.
Make sure you have all the right documents.
Make sure to have all the right documents with corresponding dates before meeting with your broker or lender.
The last three months of your account statements will be needed to show income and outgoings. For most apps, you can go to the statements and documents section, select a statement, and then tap the download button.
In order to apply, you will need three months’ worth of payslips.
In order to verify your identity, you’ll need an official copy of either your passport or driver’s license. Your lender will tell you which one they require. Many post offices can certify copies for you. Just make sure that your ID isn’t expired first.
Bank statements, utility bills and council tax bills that are less than 3 months old can be used as evidence of your current address.
Proof of deposit
In order to confirm your deposit, you’ll need either a saving statement or bank statement, typically covering 3 months but they can also be 6 months or more depending on how you accumulated the money for the deposit. If your deposit is a gift, you will need to provide a gifted deposit letter signed by the donor (your mortgage broker can give you the form to use) and typically also provide the donor’s most recent three months of bank statements.
A few more documents might be requested from you, which could include proof of:
- Any extra income, like bonuses, commission and overtime
- The income you don’t earn, such as maintenance, tax credits and child benefit
- Evidence of your right to reside in the country, such as visas or residency cards
Documents if you’re self-employed
If you work for yourself (for example, as a sole trader/Limited Company Director/Partnerships/LLP), you’ll need to provide:
- 2-3 years SA302s
- 2-3 years accounts
Lenders might also ask for 3 to 6 months of business bank statements.
Understand your budget
You should only apply for a mortgage if you know that you can afford it, so be aware of your total limit. You will want to know your monthly budget (i.e. how much you have left each month, after you pay for your regular bills and living expenses), and work out how much money is left to pay for a mortgage. Work with a specialist mortgage broker to help you as needed.
Clear (if you can) or reduce your other debt.
A mortgage is a large sum of money that you borrow and must pay back with interest. Lenders will look at your current debt when considering you for a loan. If you have savings (besides what you need for the purchase), it might be beneficial to clear your debt so that you appear more responsible to the lender. This also increases the chance of being able to borrow more money from them.
Talk to a mortgage broker
It’s worth considering using a mortgage broker as they can help you find the most suitable lender for your specific situation, that is likely to accept your application, and that will have the most cost effective mortgage product to suit your needs. This is critical, as every mortgage lender has different criteria and whilst some may reject your application, others could be a perfect fit.
Brokers will also assist with any paperwork that’s required, and guide you through the various steps, as well as keep you up to date on progress.
Discuss your plans with your accountant if you’re self-employed.
If you plan on self-employment, tell your accountant in advance that you will intend to apply for a mortgage.
They will be able to ensure that your taxes are done efficiently and reflect Income professionally, and that you will get your tax calculations documents in good time to support a mortgage application.
Get the support of an Expert
Whether you are thinking about getting a mortgage for your purchase, or securing your next mortgage deal or reviewing what may be done about the increased mortgage monthly payments, Your Mortgage Experts can help you.
Give us a call today or send us a question and one of our friendly advisers will be happy to help you.
Call us on: 020 8154 1111
Or drop us a line: firstname.lastname@example.org
Your Mortgage Experts, London W9 2HQ.
Luca BertolinoMortgage Expert
Your Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.