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Here’s what lenders really ask for on a mortgage application

Here’s what lenders really ask for on a mortgage application
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The thought of getting your first mortgage can be daunting. It feels like proper ‘adulting’. But if you do your research and come prepared, there is nothing to worry about. We’re here to help make things that little bit easier. So here is what you can really expect from a mortgage application.

What is a mortgage application?

A mortgage application is your request to a lender for a mortgage in order to purchase a property.

Understandably, because of the amount of money involved, you’ll need to provide a lot of information. This is so that the lender can properly assess whether you can afford the monthly mortgage repayments.

Typically, you’ll have a mortgage interview before making your mortgage application. This is usually held face to face or over the phone. It can involve one large session or several smaller ones.

The interview gives the lender the opportunity to ask you questions about your income and outgoings in order to make a judgement about whether or not you can afford the mortgage you want to apply for.

What do I need for my mortgage application?

There are several hard documents that you need to provide for your mortgage application. Let’s take a look.

Proof of identity

Lenders obviously want to know that you are who you say you are. So you will need to provide hard copies of the following:

  • Driving licence or passport (you will need to provide the originals)
  • Council tax statement, utility bill dated within three months or bank statements (you will need hard copies of these, not printed statements)

Proof of income

In your mortgage application, you need to provide evidence of your income. This helps lenders to assess whether you have enough money coming in to cover the repayments. They’ll need to see:

  • Payslips from the past three months
  • Evidence of bonuses or commission
  • Your most recent P60
  • Bank statements from the past three to six months

If you are self-employed, then obviously you are not going to have some of the above. Instead, you’ll need to provide:

Details about outgoings

It’s all well and good showing what money you have coming in. But if it’s all going straight back out again, then lenders will be wary. So, as part of your mortgage application, expect that you’ll need to provide information in relation to your spending habits. This could include information on the following:

  • Borrowing using credit cards and personal loans
  • Essential costs like groceries and toiletries
  • Leisure activity costs such as eating out and holidays
  • Personal wellbeing costs like gym memberships
  • Utility costs
  • Commuting costs
  • Childcare costs
  • Insurance policy payments
  • Pension contributions

If you have an outstanding student loan, you don’t need to worry. This won’t be considered a factor in your mortgage application.

This is because repayments on a student loan are only made when your income is above a certain threshold. If your income was to drop, then your student loan payments would simply stop. So it doesn’t impact your ability to pay your mortgage.

What other information will I need to give?

Finally, as part of your mortgage application, your lender is likely to ask you about the origin of your deposit. If this is in a current account or savings account, this is easy enough to prove.

But if you are receiving a little help from your parents or anyone else, you will need to have a letter from them stating whether the money is a gift or a loan. This is because, if it is a loan, then that will affect your monthly outgoings. And therefore whether or not you can afford the mortgage.

You will also need to give information about the property you are intending to buy, the estate agent you are using and your solicitors details.

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