Early this year, the property sector was tense with uncertainty about the direction it would take. At the time, Brexit talks dominated discussion among experts. The Prime Minister’s January speech did little to quell the concerns of investors and potential homeowners.
However, half-way into the year, the market appears to be relatively calm. Interest rates are competitive, forcing borrowers to opt for re-mortgaging to secure better rates on their existing loans.
First-time homebuyers are also venturing into the market with a huge question on their minds; “Should they apply directly or involve a mortgage-broker?”
Many inexperienced borrowers will normally choose to hire a broker because they are unsure of whole process. If you are taking more than a mortgage, perhaps a fixer upper too, it is probably a good decision to hire an expert because of the process involved. But if you are only taking a home loan, you could apply directly to the bank or building society of your choice. Ensure you study the requirements thoroughly to make your application hitch-free.
For example, how is your credit score? Are records in place to prove your credibility? You will also need to have all documents ready for a successful application. For those applying directly to a mortgagee, the following is a checklist of documents you will need.
Documents for a mortgage application
- Proof of identity and address
You will need documents to show who you are and confirm where you live. A current driver’s license or an international passport will suffice. For your home address, a hard copy of your bill of statement or utility bills dating from the last 3 – 6 months. It must contain your primary address,
- Proof of income
This is to show you have a means for affording the loan you wish to take. There are requirements for the employed (P60 forms and the last 3 payslips), self-employed, irregular income, retirement income and so on. Your tax returns are important too.
- Evidence of outgoings
This includes your expenses such as previous loans, credit cards, statement of spousal or child maintenance and other obligations. Lenders will also need to see essential costs like broadband bills, TV licence, water bills, travel, and so on. Ensure you have all recent documents for proof of payment.
- Checking for your future
The mortgagee will also like to see how a change in interest rates might affect your ability to pay in future. They will also consider your budget. With all these in place, they will calculate your eligibility for affordability.
The requirements may vary across different mortgage-lenders. If you are unsure, look up their website or speak to a staff. The better prepared you are, the higher your chances of a successful application.