Mortgage Preparation for the Business Person
Posted on 10th May 2018 at 18:37
Are you prepared for your new mortgage?
Mortgage Preparation can be started way in advance of your application, particularly if you’re self-employed
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• If you’re a first-time buyer, start saving EARLY and KEEP RECORDS of your savings statements, savings books etc – at least one year’s worth of savings evidence required for anti-money laundering purposes.
• Make sure you’re registered on the electoral role at the address you live at!
• Make sure your passport is up to date. Make sure your Driving Licence shows the correct address.
• If you’re recently married, get a copy of your marriage certificate to verify the change of surname.
• Make sure you have bank statements (even if you do on-line banking) that show your current address.
• Ideally don’t take out any hefty new credit commitments prior to a new application.
• Check your credit report (Experian or Equifax) if you are:
o Worried about any past credit blips
o Don’t know exactly what finance you have open – sometimes if your mobile contract includes the cost of the handset, this will show as a LOAN
o Unsure of whether you’re on the electoral role
o Hazy about your previous address history
• If you’re in a fixed mortgage term, KNOW when the end date is.
• Start looking at alternatives 4-6 months before the end date.
• Research the value of your property. Most will be easy to estimate comparing other, similar properties listed on Rightmove and Zoopla.
• If you’re employed, start saving your payslips (3 most recent months are needed) and your most recent P60 in safe and easily accessible place.
• If you’re self-employed, ensure you have up to date tax return data in the form of SA302s and tax year overviews. 3 years are required.
• Depending on the lender, if you’re a Limited Company, accounts may be used instead of SA302s but have both fully up to date!
• Also, 3 x months’ bank statements are required so keep them there too.
• If you have any properties in the background (holiday homes or Buy to Let properties in the UK) – have the information about those available too:
o Mortgage details if applicable
o Rental income details
o SA302s and tax year overviews showing your income being declared
o Tenancy agreement if applicable
• Make a note of your income (other than earned income) such as:
o Pensions (annual statement required)
o Child benefit (confirmed by bank statements)
o Maintenance payments (are they court ordered? If not, at least6 months’ bank statements required to verify regular receipt)
For all the above your bank statements should show these being credited
• Know your outgoings – most people under estimate their monthly expenditure:
o Council tax?
o Standing orders for utilities?
o Mobile phones?
o Travel costs?
o Childcare costs?
• If you are buying a new property (ie raising funds from a re-mortgage for the deposit), some lenders will need to know more details about the property you’re intending to buy.
• If you’re raising any capital (from a re-mortgage) to do any home improvements, make sure you have some quotes available if there is building work to be done.
Make sure you realise the value of a re-mortgage if that’s what you’re planning to do.
Re-mortgaging to a new lender may save you significantly more.
Your home may be at risk if you fail to keep up the repayments on your mortgage.
Any examples given are for illustrative purposes only and do not constitute advice.
Rates change and the interest rates mentioned were correct as at 10th May 2018.
Heide Swift CeMAP, CeRER
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