What do you need to know?
Frequently Asked Questions
What do mortgage lenders look for?
A mortgage advisor needs to see that you have a good credit history and are able to meet your monthly mortgage payments. They will look at your bank statements, your credit scores, level of debt, monthly outgoings, regularity of income and other commitments to decide if you are eligible.
How do mortgage lenders check my income?
Mortgage lenders will look at your last 3 months payslips, and take into consideration an average of any commission, overtime or bonuses. Some may wish to see your P60’s for the last 2 years. In addition they may check your bank statements. They look at the stability of your work and whether you have any gaps in your employment. They are trying to find out whether your income is regular and reliable.
What if I am self-employed?
Most lenders will want to see your last 2 years Tax Calculations (aka SA302. Not SA100 Tax Return) and bank statements. From these documents they will average your last 2 years Profits if a Sole Trader, or Salary & Dividends if Ltd Company Director.
However, some lenders will look at your Salary and share of Net Profit after Tax.
How can I improve my chances of getting a mortgage?
Six months before you wish to apply for a mortgage start preparing your finances so that you can be in the best position possible. It’s best to speak to your Mortgage Advisor at this stage to discuss the best way forward. Look at costs you can trim, make your monthly bill payments on time, avoid taking out additional loans and make regular down payments on any debt.
How long does a mortgage application take to be approved?
It can take two to six weeks to get a mortgage approved. This may be faster if you apply through a Mortgage Advisor who will find you the best deals for your personal circumstances.
I have been self employed for 12 months can I get a mortgage?
Yes. There are a few lenders that will consider just 1 years Accounts or Tax Calculations and their interest rates are competitive too.
What is the maximum mortgage term these days?
40 years.
I’ve been told that I can only borrow 3 times my salary. Is that correct?
No. Most lenders will lend you 4.49 times your salary with some going up as high as 4.75 times and 5 times. In special cases you could borrow 5.5 times and 6 times, depending on your profession and income. These are all subject to your other financial commitments.
I have a CCJ, do I have to wait 6 years until it disappears from my credit report before applying for a mortgage?
No. There are some lenders that will consider a mortgage application from you 6 months after you have received a CCJ or entered into an IVA. But be warned the interest rates could be very high.
I have spoken to two other Mortgage Advisors and they have said that I cannot get a mortgage. What can I do?
Speak to me! I enjoy exceeding expectations. There are over 70 mortgage lenders in the UK and I won’t leave a stone unturned until I have found a lender that will lend to you.