Thought it worth discussing the current state of play on mortgages & what the lenders are looking for.
Although there’s plenty of doom & gloom around the world of mortgages the actual truth is that lending is increasing year on year, although still short of the 2007 /2008 pre-crash figures.
What has changed is the lenders attitude to risk, prompted by FCA reviews. The lender is now tasked with ensuring that a mortgage is affordable to the client from the outset, which means that they are reducing income multiples & taking into account all of an applicant’s current outgoings. No more does equity play any part in a lenders decision other than more favourable rates for the “safer loan to values”.
So, how do you ensure that you can get that elusive mortgage & also ensure that it goes through as speedily as possible?
- Have latest P60, six months payslips & six month bank statements to hand. If you’re self-employed you’ll need to call HM Customs on 0300 900 0444 & request your latest three years SA302’s.
- Print off your latest Experian (Credit Expert) report. This’ll be what the lenders will use to assess your credit rating and your ability to manage debt. It will also show if you have any adverse credit showing against you.
- Ensure you have proof of your deposit. If your deposit is coming from savings you will need to provide proof that the savings have been built up over a period of time. If your deposit is coming as a gift from a family member then you will need a letter from that family member confirming that it is a true gift & not a loan & also you will need three months bank statements from the person providing the gift to prove that the funds are available.
With these points addressed you are then in a position to get a decision in principle from your chosen lender &, if positive your application will progress at a decent pace.
It’s worth noting that lenders vary what they will include as part of your income, what they will deduct & what adverse credit they will ignore. To save making applications to lenders that would not consider your application I would strongly recommend using a mortgage intermediary who will know lenders criteria and be able to recommend the product most suitable to your needs & situation.
For a free consultation from one of our independent advisers please call Zing on 01702 423900