What do I need to get a mortgage?

So, you’re thinking about buying a home? We understand that applying for a mortgage can seem like a daunting thing to do, but it doesn’t have to be. First things first, be prepared as applying and getting a mortgage involves a hefty amount of form filling; and you will need to provide lots of different information which is dependent on what type of mortgage you are applying for; but being prepared will help you and make the process move as smoothly as possible.

Preparing to get a mortgage

Before you apply to get a mortgage, it is useful to have certain documents ready and easily accessible. We also recommend that you have a good understanding of your finances. Don’t worry you don’t need to be a finance wizard, but having good knowledge of your credit score, income and outgoings and budget are helpful, and will help you be more prepared to get a mortgage.

Read on to find out what documents you typically need to get a mortgage.

1. Check your credit report

This is one of the most common recommendations for when you are looking to apply for a mortgage; and is very important in the process. Don’t panic this isn’t like an exam as there isn’t a specific credit score you need for a mortgage, and that’s because there isn’t just one credit score. However, a higher credit score means you’re seen as a ‘lower risk’ applicant; and means that you have more chance of being accepted to get a mortgage, and at better rates.

Getting a mortgage for bad credit is certainly not impossible, but can be harder and is likely to mean you’ll get high interest rates and need a larger deposit than normal.

So, what do they do with your credit score? Lenders will look at your credit report as this gives them a detailed insight into your credit history. It will show things like, how much you owe on credit cards, if you’re registered to vote and if you’ve missed payments in the past. Lenders will then put that all together and give you a credit score of their own. But it isn’t just about your credit score.

As well as looking at your credit score/history, mortgage lenders will look at how much you earn and your outgoings. This includes credit repayments and other regular fixed payments, such as council tax, phone bills, childcare and other outgoings you have on a monthly basis. This will be viewed as lenders will want to see if you can afford your mortgage before they lend you the money.

This leads us on to our second tip of what documents you need to get a mortgage.

2. Proving your income and monthly outgoings

Your income is a very important aspect of getting a mortgage, as this will be the main source of how you will repay your monthly mortgage repayments back to the lender. Therefore, mortgage lenders will want to see how much you earn and if you can afford the monthly repayments with your current income and outgoings.

Be prepared and have your last 3 months’ payslips ready. If you have recently started a new job, or changed salary, you’ll need to be able to provide proof of your salary. Additionally, if you have any bonus payments or overtime that you would like to be considered with this, it can be added when it comes to your mortgage application.

Along with your recent payslips, you will typically need your last 3 months’ bank statements. This should be the account that your salary is paid into; this is to ensure that the figures match on your payslips compared to the relevant bank account. Mortgage lenders may request to see bank statements from other bank accounts you hold as well, if it is relevant to your circumstances and application.

What if I’m self-employed or a freelancer? If you’re self-employed, you will need to provide the following additional documents.

• Proof of income (2 years)
• Certified accounts
• SA302 form and tax year overview from HMRC
• Business bank statements

3. Proof of ID

Very standard with every application, lenders will want to check who you are. The most used documents provided to certify your ID is a passport or driving license. But there are numerous other verified documents you can provide if you do not have these. Speak to a member of our team to find out what these are.

4. Proof of address

The same as your proof of ID, these are just as important. This can be provided from the list below as long as they are dated with the last 3 months:

• Council tax bills
• Utility Bill (not mobile phone bill)
• Bank statements
• State pension notification letter
• HMRC Tax notification documents (excluding P60s)
• A tenancy agreement from a local council or housing association

5. Evidence of your deposit and where it’s coming from

Mortgage lenders will need see proof of deposit; this will help them understand where your deposit is coming from. If your mortgage deposit is coming from your savings, you’ll need to provide bank statements for the relevant account and any large payments will need to be explained. These bank statements will also need to show your name and address.

If you’ve got a gifted deposit, mortgage lenders will usually require a signed letter from the person who is gifting you the money. This will need to confirm that the gift is either non repayable or repayable. It is worth checking when applying what your lender will require if this is applicable to you.

Have you considered choosing a mortgage broker to help you with your mortgage application?

Working with The Residential Mortgage Hub means you’ll have access to over 1,000’s of mortgage rates from 90+ UK lenders. Our advisors will handle the application and paperwork on your behalf. And we will communicate with and chase your solicitors for you to ensure things are completed as quickly as possible.

Find out more about how we can help you by calling us on 01634 968111 or send us an enquiry.