In this post I will try to clarify what documents are needed in order for you to get a mortgage.
Please can I start by stating that since the FCA Mortgage Market Review (MMR), the level of documentation required by the lenders as well as brokers has dramatically increased.
Fundamentally the lender is now responsible to ensure the applicant has affordability and sustainability not only at the point of application, but throughout the term of the mortgage. This has ensured lenders are now taking greater care over applications with a greater emphasis on evidence of income, and expenditure together with feasibility of lending throughout the term.
PROOF OF INCOME
Employed Applicants
- Last 3 months’ payslips (all jobs)*. If you are looking to factor in a lump sum payment such as an annual bonus then we will need to see the individual payslip(s) showing the additional payment(s).
- Last 3 months’ bank statements for all accounts that can accept direct debits. This should also include salary credit. If you have had a negative balance please provide proof of an agreed overdraft facility.
- Last 2 years’ P60s (all jobs). This is generally needed if you are looking to use an element irregular income such as overtime, commission or bonuses as part of your income.
Self Employed Applicants / Landlords / Limited Company Directors
- Last 3 years HRMC Tax Calculation SA302s. For more information on how to obtain these click here: https://www.nicheadvice.co.uk/hmrc-sa302-tax-year-overviews-for-getting-a-mortgage
- Last 3 years HRMC Tax Overviews. For more information on how to obtain these click here: https://www.nicheadvice.co.uk/hmrc-sa302-tax-year-overviews-for-getting-a-mortgage/
- In addition Limited Company Directors will need to provide the last 3 years’ full accounts compiled by a Chartered or Certified Accountant.
Maternity leave
- Return to work letter from their employer. The letter should state the return date, salary, and confirmation of any changes terms to the employment.
- Last 3 payslips’ before maternity leave.
- Depending on the lender they may also need to see proof of savings to the mortgage payments for the period you are absent.
Benefits and other income
- Latest HMRC Tax aware to evidence child and/or working tax credit.
- Court order or bank statements showing credit for proof of maintenance.
PROOF OF IDENTITY AND ADDRESS
- Passport and drivers licence. Please check these are in date. If on a VISA please provide stamp in the passport confirming the expiry date or a residency permit.
- If the meeting has not taken place face-to-face then extra identity checks will take place by Skype. More information will be provided to you before application.
- Last month’s utility bill or credit card statements.
- Latest council tax statement or voters roll confirmation (poll card or credit report).
- If you are not on the voters roll at your current address please provide a statement or bill covering each of the last 3 years.
- Last mortgage statement (all properties).
PROOF OF DEPOSIT
SAVINGS. We will need to evidence the build-up of funds by bank statements covering the last 3 months. An explanation for the source of any entry over £1,000 entering into your account will be required.
GIFT. If all or part of the deposit is via a gift we will provide you with a templated letter for the donor to complete. We will also ask the donor for Post Office certified passport and a recent utility bill or credit card statement showing their current address. In addition we will need to evidence the build-up of funds by bank statements covering the last 3 months. Where there are more than two donors please speak to your Mortgage Advisor.
EQUITY. If you are selling a property and the equity is to be used as a deposit then we will need the last mortgage statement and an estate agents Memorandum of Sale.
NEW BUILD / AUCTION. If you have paid a deposit already on the property to the developer please provide evidence of the payment.
BUY-TO-LETS IN THE BACKGROUND
- Last 3 months’ bank statements showing rental credit.
- Existing tenancy agreements for all properties that are let.
- If the property is just about to be let for the first time, please provide a letting agent’s letter advising the expecting rental income.
Please also see the Self Employed Applicants / Landlords / Limited Company Directors section above.
RIGHT-TO-BUY
- Right to Buy Offer papers officially supplied from the local authority. If the purchaser names differ from those who will be on the mortgage please let us know immediately.
SHARED OWNERSHIP
- Shared Ownership Contract Offer papers. This must show the share percentage being purchased, rent on the remaining share, ground rent and service charges.
PROPERTIES THAT HAVE BEEN BUILT IN THE LAST 10 YEARS
- If the property you are purchasing was built in the last ten years please can you email confirmation of what builder’s warranty there is in place e.g. NHBC, Zurich Foundation etc.
NEW BUILD
- Please provide a copy of the CML disclosure form which you can get from the estate agent or builder.
- Please ask the estate agent or builder for any special directions to the plot so the surveyor has no difficulty in finding the property as this can be problematic on new builds in particular.
- If you have already paid a reservation fee please provide evidence of this payment.
EXTRA DOCUMENTION NEEDED FOR ADVERSE CREDIT CLIENTS
- Copy of a recent credit report from either Equifax or Experian.
- Letter of explanation for the adverse credit addressed to the lender, including your full name(s), property address, and lender reference number which will be provided. This should stick to the facts and cover all of the issues (in your credit report or otherwise). It should also state why the situation occurred and why it unlikely to occur again i.e. circumstance changes.
- CCJ satisfaction certificate (if applicable).
- Bankruptcy discharge certificate (if applicable).
- IVA settlement certificate showing all the creditors, amounts and a statement on how well the arrangement was conducted (if applicable).
- If it is a purchase the Estate Agent’s sales property particulars flyer.
ADDITIONAL INFORMATON IF YOU PROVIDING BANK STATEMENTS
- They must cover the full period requested. For example:
– 3rd August 15 to 2nd September 15 (from the 5th August 15 would be unacceptable). - If printed online (or duplicates printed in branch), they must:
a) be via the official print option. Screen prints are unacceptable.
b) include the https web address at the bottom of every page. Most banks can talk you through this process. If they is not the option for the https to be shown every page must have a branch stamp.
c) include the bank or building society’s’ name.
d) include your full name. First name initials are unacceptable.
e) include the full account number. ****1234 for instance is unacceptable. - Any transactions over £1,000 (apart from regular salary) are likely to be questioned by the lender so please email us an explanation. If internal transfers please also provide the statements for that account (covering the same requested period).
- Any payments to or from abroad are likely to be questioned by the lender. Please provide an explanation on an email to us.
- If you have had a negative balance please provide proof of an agreed overdraft facility.
PLEASE BE WARNED
The creation or submission of false institutional documents to obtain a mortgage is fraud and could lead you to blacklisting or imprisonment.
If you are using a Broker that says that the above documentation is not necessary please question their activity as any wrongdoing will reflect directly on you as they are operating on your behalf.
For more information on getting a Mortgage please call us on 020 7993 2044 or simply complete the online enquiry form on this page.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.
