Once you have saved up a large enough sum of your income to put forward as your deposit, it is now time for you to get prepared for a mortgage!
We have put together a comprehensive list of some helpful, beneficial advice that will hopefully ensure you’re as mortgage ready as you possibly can be!
The first thing you should always have at the top of your list of things to do, is getting yourself an up-to-date credit report.
This is something that you should even do before you get in touch with a dedicated mortgage broker in Doncaster like ourselves for mortgage advice, as this will help make the process easier for you.
It is definitely a good idea to pay off any payments that you still have outstanding on your balance, even if you are holding back based on principle. We do sometimes hear of customers refusing to pay phone bills whilst in a dispute with the provider and it’s not something we recommend!
In doing this, you’ll have less going against you and can increase the likelihood of being able to obtain a mortgage. A helpful tip to remember is to make sure you’re on the voters roll, as that apparently has a positive effect on your credit score. Closing down any of your old credit cards also can be helpful.
Your dedicated mortgage advisor in Doncaster will be able to run through your credit report in the early stages of your mortgage journey, providing expert mortgage advice on what you can do to present your credit in the best light.
In the beginning stages of your home buying process, you will be asked to present some photo ID. Our customers usually prefer to put forward a driving license or passport to help with this.
Your driving license is something that you can also utilise for your address as well, though if you use it for proof of address, you can’t use it for proof of ID as you must have one for each, not one for both.
Any non-UK nationals who are now living within the UK will need to show us a copy of their Visa on top of this.
On top of proving your identity, you will also need some documents that can prove where your residence is. Generally speaking we find that regarding these, customers opt to use a utility bill or original bank statement that has a date of the last 3 months.
Alternatively, as mentioned above, if you choose to use a passport for photo ID, you can use your driving license as proof of address alongside it.
Your bank statements will be used as a means of evidencing your income and regular spending habits. If you’re a frequent gambler, we highly suggest avoiding gambling well in advance, as lenders do not like to see this on bank statements.
The same will apply in regards to going past overdraft limits and letting direct debits bounce. You must ensure you are as prepared as possible in order to present yourself as appealing to a mortgage lender.
Most lenders will want to take a look at your bank statements, as they like to go into the mortgage lending process with complete confidence that you are serious about your finances.
The bank statements usually needed are the ones that show your salary going in, and your bills and regular payments going out.
You will have to prove that you definitely have the funds in place to put forward for a deposit and be able to evidence this for the purposes of anti-money laundering.
We always feel that the best practice in this case, is to limit moving money around your accounts, as otherwise the audit trail can be a little more complicated.
Lenders have a preference of seeing your savings built up over time, so you’ll need to account for any large amounts that have been transferred into your accounts within any recent period of time.
Nowadays, we find that the deposits being put forward for properties are often gifted by family members. These are an increasingly popular way forward for first time buyers in Doncaster looking to find their footing on the property ladder.
These need to be evidenced also, with the person who has gifted you the money being required to sign a letter confirming it is purely a gift and not a loan that you are expected to pay back at a later date.
The most important thing when it comes to affordability is proving your income. This is often your last 3 months of payslips if you’re employed, with some lenders needing to see your most recent P60.
Lenders may also consider regular overtime, shift allowance, bonuses, and commission. If you have more than one employer (maybe you have a part-time job or are self-employed in Doncaster), lenders will also accept earnings from those.
These days, many applicants are self-employed and seeking fast and friendly Mortgage Advice in Doncaster. Self-employed applicants will need help from their accountants to request their last 2-3 years’ proof of earnings from the Revenue.
Our mortgage advisors in Doncaster are able to talk you through what to download from the Government Gateway if you’re in control of your own accounts.
It’s always smart to plan ahead and do your homework, creating an estimate of what you expect your outgoings to be after you move into your new home. This helps you to figure out roughly how much your council tax and utility bills will be, with any regular expenditures like food and drink added on as well.
It’s also helpful in showing you how much disposable income you’ll have available to pay your mortgage from. We’ll send you our version of a budget planner prior to your mortgage appointment, in hopes that you’ll find it handy to have.
As you can see from what has been mentioned in this article, it’s not super easy to get prepared for a mortgage, though by planning ahead and being careful, you it’ll be quite a bit easier! Putting in the hard work and remaining patient will definitely go a long way during your mortgage journey.