So, you’ve saved up for your deposit – or got the green light from the “bank of Mum and Dad” – and made the decision to move home. What’s the next step? Put simply, and in the best Boy Scout traditions – it’s time to get prepared.
Know where you stand
I’d recommend speaking to a UK Moneyman mortgage broker as early in the process as possible, so you know how much you can borrow for a mortgage and how much it will all cost.
Obtaining an up-to-date credit report should also be at the top of your list – you don’t want a meaningless squabble with your mobile phone provider holding you back from buying a home.
Your UK Moneyman mortgage broker will obtain a fully credit-checked agreement in principle on your behalf, but you’ll have to prove who you are, where you live and how much you earn.
There is some paperwork for you to get together, so it’s a good idea to open a file for yourself and start collecting everything in advance.
Proof of ID
In terms of proving who you are, you’ll need to produce some photo ID, such as a driving license or passport, and if you’re a non-UK national working over here on a visa, you’ll need that, too.
Proof of address
In addition to the above, you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the past three months.
Your bank statements should evidence your income and regular expenditures.
Lenders will not be happy to see gambling transactions or payday loans on your account and nor will they like it if you go over an agreed overdraft limit or if your direct debits bounce regularly.
Proof of deposit
You will have to prove you have the funds in place for the deposit and also evidence this for anti-money laundering purposes. Try not to move monies around your various accounts too much, as it will make evidencing the audit trail more difficult.
Lenders like to see your savings building up, so you’ll need to account for any large credits into your accounts. Quite often money for deposits has been gifted by family members. These funds need to be evidenced also and the “donor” will need to sign a letter to confirm it’s a non-refundable gift, not a loan.
Proof of Income
In terms of affordability, the most important thing is to be able to prove your income. If you are employed, this tends to be by way of your last three months of payslips and most recent P60. Lenders can take into account regular overtime, commission, shift allowance and bonuses.
If you are self-employed, then you’ll possibly need your accountant’s help to request your last one, two or three years of tax calculations and overview documents from HMRC.
Your expected outgoings
It’s a good idea to do your homework and write down an estimate of your anticipated outgoings after you move house. You can work out an idea of how much the council tax and utility bills will be, plus your regular expenditures, such as food and drink, and demonstrate how much disposable income you have available from which to pay your mortgage.
My own view is that it’s better to get all this at the outset and collate everything that the lender could possibly ask for.
This saves time and frustration later down the line if you’re subsequently asked for paperwork you could have had ready at the outset.
The exciting part, viewing properties.
Once you’ve found one you like, get in touch with your UK Moneyman advisor and they’ll help you put an offer forward and also when accepted, get the ball rolling with your mortgage application.