Mortgage documents needed when applying?
Navigating the world of UK mortgages can be daunting. Often any wonder the mortgage documents needed when applying. Each lender has its own set of required documents, making the process feel unpredictable. This guide simplifies the paperwork maze, ensuring you have everything at your fingertips when applying for a mortgage in the UK. Although this is not an exhaustive list it will cover the majority of documents banks and building societies may request.
1. Proving Your Identity and Address
When looking at mortgage documents needed when applying, proving your identity and where you reside if often top of the requirements.
A. Photo Identification
- Current passport
- Driver’s license
Typically you will need to provide one of the above documents, this will need to be in date and
B. Proof of address
- Utility bill dated in the last 3 months
- Council tax bill dated in the last 12 month
- Bank statement or credit card statement in the last 3 months.
If you lack these, lenders can accommodate other methods to verify your identity. Many people, like students, might not have bills in their name. Mortgage advisers can offer tailored advice.
2. Showcasing Your Earnings
Lenders need assurance that you can handle the loan. Here’s what they might ask for based on your employment type:
A. PAYE Employment:
- Payslips: Recent ones, up to three months old.
- P60: Especially if you’ve recently changed jobs or roles.
- Tax calculations and Tax Year Overviews: Obtainable from HMRC for the last 2 years
- Accountant’s Certificate: From a qualified UK accountant.
- Finalised company accounts for the last 2 years
In some instances, lenders may ask for an SA100 which can be downloaded from HMRC, and also 3 months’ business bank statements to ensure the company is still trading at the level of business as per the company accounts. More information can be found about getting a mortgage when self-employed here.
C. Additional Income Sources:
- For bonuses, overtime or commission:P60 and/or three months of payslips.
- For benefits: Letters from HMRC or the Department of Work and Pensions (DWP).
- For fostering: Letter from the local authority detailing children and duration.
- For pensions: Pension payslip for private pensions or annuities.
3. Detailing Your Expenditures
Understanding your monthly expenses helps lenders gauge your repayment capacity:
- Recent and unaltered, from the last 2 months.
- Be ready to discuss any unusual or ambiguous transactions.
4. Proof of deposit (purchase applications)
If you are buying a property, lenders will want to know the source of your funds which will be used, common ways to evidence this include:
- Last 3 months bank statements for where the money is held
- Gifted deposit letter, If a family member is gifting you money as a deposit lenders will want a signed letter confirming the gift. In some instances, the lender may also ask for their bank statements.
If your money has passed through multiple accounts during that period lenders will also want to see the full audit trail of the accounts it has passed through and may want further information on how the funds have built up over time.
5. Preparing for a Mortgage Application
Before diving in, ensure you:
A. Understand Your Credit Reports:
- Review reports from the three key credit reference agencies in the UK.
- Rectify any anomalies that might hinder your application.
We suggest checking a copy of your CheckMyFile report as it shows all 3 agencies under one report.
B. Organise and Double-Check:
- Cross-check names on statements and bills.
- Keep up-to-date identification and prepare multiple document copies.
Feeling Overwhelmed when applying for a mortgage?
Mortgages can be intricate, especially for first-timers. If you would like to discuss in more detail the mortgage documents needed when applying we are always on hand at Dimora Mortgages to provide assistance where needed.