Once you have gotten your home buying journey underway and saved up a suitable deposit, it’s time for the next step; Getting prepared for your mortgage!
Below we have compiled a comprehensive list of some helpful advice that first time buyers in Liverpool may find useful, in order to help you ensure that you are ‘mortgage ready’.
Prior to getting in touch with a mortgage broker in Liverpool, before anything else, you should always make sure you get an up-to-date credit report.
We would recommend that you pay off any payments that you have left outstanding, even if you’re withholding those payments due to a conflict of principles.
You’ll be in a much better place for obtaining a mortgage, due to the fact that you’ll have a lot less going against you financially. This will be appealing to a mortgage lender.
We would also definitely suggest making sure that you are on the voters roll. Though it may not seem like much, it seems to have a largely positive effect on your credit score. You should also close down old, unused credit cards, as this seems to help as well.
Your mortgage advisor in Liverpool will be able to go through your credit report early on in your mortgage journey. You’ll receive expert mortgage advice on how they feel would be the best ways to further improve your credit score.
Early on in your home buying process, you’ll be asked to provide us with some ID that has a photo on it. Usually we see that our customers will give us their driving license or passport.
Your driving license can also be used as a means of proving your address, though you are only allowed to use this for either your photo ID or your address, not for both.
This means that if you are looking to use it for photo ID, you’ll need another document to detail proof of address. Any non-UK nationals now residing in the UK will also need to show us a copy of their Visa.
You’ll also need some documents to prove to the lender where you live. We normally find that customers send in utility bills or original bank statements that are dated within the last 3 months.
Alternatively, as touched upon previously, if you are opting to use a passport for photo ID, you will be able to use your driving license as proof of address.
Your bank statements should be able to display a list of your income and regular expenditures. We would highly suggest customers refrain from any gambling on the build up to this, as the lenders can hold this against you during your mortgage application.
Also make sure that you don’t go past any overdraft limits and let any direct debits you have bounce. It’s very important that you prepare yourself in plenty of time.
You will find that most mortgage lenders will ask to see your bank statements, as they like to be absolutely certain that you are completely able to keep up your monthly mortgage repayments.
The bank statements that will needed are usually the ones that will be documenting bills going in and out of your bank account.
As a first time buyer in Liverpool, you will have to be able to prove to the mortgage lender that you definitely have the means to afford an initial deposit, maintain your payments and be able to evidence that you can do this for anti-money laundering purposes.
Audit trails can be a little difficult to prove, especially if the money has been moved between accounts quite a bit. With this in mind we would highly recommend that this is kept to an absolute minimum.
Lenders would much rather prefer to see you building up your savings over time, so if you have any large amounts going in, make sure you are able to account for those with receipts to evidence the trail.
Nowadays, we find that a lot of times our customers deposits are actually gifted by family members and are the most popular choice for first time buyers in Liverpool to take that primary step onto the property ladder and into the mortgage world.
Gifted deposits will always need to be evidenced , with the “donor” (person who gifted you the deposit) being required to sign a letter confirming it’s not a loan that they are expecting you to pay back.
The thing you should always put a focus on when it comes to mortgage affordability is being able to prove to the lender where your income comes from.
If you’re a regularly employed applicant then this will generally come from your last 3 months of payslips, with a portion of mortgage lenders out there needing to see your most recent P60.
Lenders may also bear in mind any regular overtime, shift allowance, bonuses and commission that you have. If you have more than one employer (perhaps you are working a part-time job or are self employed with contracts in place), lenders will sometimes accept earnings from those as well.
We find that a large amount applicants who are self employed tend to call up seeking mortgage advice in Liverpool. If you are self employed in Liverpool and looking to apply for a mortgage, you will need help from your accountant to request your last 2-3 years’ proof of earnings from the revenue.
Our trusted and experienced mortgage advisors in Liverpool are able to have a discussion with you, instructing on how to navigate the online government gateway portal if required to do so.
It’s always within your best interests to do your homework ahead of time and write down an estimate of what you think your outgoings could possibly be once you have moved out of your current home and are living in your new home.
This will help you work out costs such as council tax and utility bills, as well as anything you regularly spend your money on, such as your food and drinks shop.
It will also help to give you a generalised estimate of how much disposable income you’ll have available in order to pay your monthly mortgage payments. Prior to our initial appointment, we’ll send you a copy of our budget planner, which hopefully will be able to help you out with your preparations.
As you can see from all of the points we have mentioned in this article, getting prepared for a mortgage can be quite complicated, although with the help of a dedicated mortgage advice team in Liverpool, you’ll still be readily prepared to move forward with your mortgage journey.
Putting in the effort from the start, staying patient and being careful will hopefully increase the likelihood of you walking out of the mortgage process with your dream property to show for it.