This blog comes from an interview with Dan Rowden, First Time Home Buyer Specialist
This blog is going to be about the five key areas of information that a mortgage broker like ourselves will need, in order to research the whole UK mortgage market to find your best options.
Firstly, and arguably the most important, is your proof of income. In a nutshell if you’re an employee, this will be your most recent three payslips, and also your most recent P60. If you’re self employed as a sole trader or a partnership, the last two years tax returns or tax calculations showing your net profit will be crucial. If you are a limited company director, the same applies with regards to tax year calculations for the last two years or last two years accounts. But the key things there are your salary, director salary, any dividends and also retained profit, if applicable. So, proof of income, that’s the first one.
Secondly, proof of ID and address. Passport, driver’s license, utility bills, bank statements, credit card statements, anything along those lines to prove who you are and also where you’re currently living.
Thirdly, we need to get an idea of your income and outgoings. So as I’ve already said, obviously we need your income documents. That is crucial. But as well, we need to know what your outgoings are. We have an expenditure form that we send out to our clients and we can go through it with them to break down normal living costs, food, utilities, etc., but also any fixed committed expenditure, credit cards, secured loans, car loans, hire purchase (anything along those lines), so that we can see what is currently there at the moment, is any of that going to be paid off, and if not, obviously, which bits are going to be ongoing? So that’s number three.
Number four, we need the last three months bank statements. So if you are self employed, that would normally be your business bank statements to show the turnover going through the account. And if you are employed, it would be your personal bank statements, showing your salary going in every month and obviously the lenders need to sync that up.
And finally, more and more important these days is getting a copy of your credit report. There are plenty of available credit agencies now. The two biggest ones are Experian and Equifax, but there are quite a few other companies as well, which offer a pretty decent credit report, including ClearScore, Credit Karma, TransUnion. A lot of them will offer free reports or there’ll be a introductory period that is free and then a monthly subscription. But having a copy of your credit report is very, very helpful for us, especially if you think, or you are aware of any late or missed payments, court judgements, or anything along those lines, that may or may not have been on your credit history in the past.
So a quick summary. Number one, proof of income. Number two, proof of ID and address. Number three, expenditure form for outgoings. Number four, last three months bank statements. Number five, your credit report. With all of that information, we can research the whole of the UK mortgage market to find your best options!