Ideally, we recommend that you have your ducks in a row as early as possible, taking the time to organise your financial situation in advance of making an application. You should consider-
We need to be able to prove your income
This may be as simple as hanging on to your payslips. However, if you are self-employed we will need to be able to provide two years financial statements and if you have additional non-salaried earnings you should consider how this money can also be proven.
Think about how much ‘cash’ deposit you have
The amount of money you can contribute to the purchase will make a big difference. Most lenders will offer lower rates to applicants with more than the ‘minimum’ deposit. They will also tend to be more generous with their approval criteria for those applicants who have more cash to put down.
Are you a good record keeper!
Generally you need to be able to supply lots of paper when applying for a mortgage; bank statements, credit card statements, payslips and details of outstanding loans being the main ones. If you are not always quite as organised at home as you’d like, it might be time to make a special effort!
Do you run a monthly budget?
It’s really important to demonstrate that you can afford the mortgage you want. Preparing, and sticking to, a budget is key in this process. Especially so if your budget shows that you can afford the level of repayment you are proposing. Some applicants prepare complex excel spreadsheets but don’t panic, we have a simple budget planner you could also use.
What other commitments do you have?
From your monthly budget, think about the other regular costs you have. Payments for personal loans, credit cards and school fees will for instance count more highly against you than the cost of your regular holidays. However, the lender will want to see that you have considered the implication of the new mortgage cost and what changes you may have to make to your lifestyle.
Make sure you have considered everything!
Our advisers will also let you have an estimate for the other costs. The one-off fees such as stamp duty and legal fees are generally paid at completion. There are other costs such as your property and personal insurances which add to your monthly expenditure so we will make sure you have also allowed for these.
Allow enough time…
Some lenders will turn an application round in just a few days, others take considerably longer. The potential delay in approval does not make them the wrong choice, after all you may be with them for 30 years, but you do need to be realistic about how long the process can take. A quick chat with one of our advisers before you get started will give you a good idea of the current timings and in some cases it’s possible to have your mortgage pre-approved – helpful for calming the nerves!
So take some time to get organised!
So as you can see, filling in the mortgage application form is just one part of the process. Happily, over the years, we’ve successfully helped loads of people with their mortgage applications. We know how the lenders think and are confident that spending some time with us will help you on the road to a stress free house move!