Steady Income

Does my job provide me with a steady income?
Lenders focus on basic income, often excluding bonuses and overtime. Ensure you have:

• Six months of payslips
• Last year’s P60
• A salary certificate filled out by your employer (obtainable from your Financial Broker)

Employment Stability

How long have I been in permanent employment?
To qualify for a mortgage, you should be past your probationary period and have at least two years of continuous employment.

Long-term Residency

Do I plan on remaining in the same geographical area for a few years?
If you plan to move soon, purchasing a home might not be ideal. House prices can fluctuate, and short-term ownership increases the risk of negative equity, where your mortgage balance exceeds the home’s value, leaving you with debt even after selling.

Savings for Additional Costs

Do I have enough money set aside for my deposit, valuation, legal fees, and furnishing?
With lenders no longer offering 100% financing, you need to provide proof of funds for the deposit before a loan offer is issued.

Also, consider costs for valuation and legal fees:

• Valuation: Costs vary by location. Get advice from your financial advisor before instructing a valuation, as an approved valuer must do it.
• Solicitor: Similarly, ensure your solicitor is on the lender’s approved panel.

Evidence of Savings

Can I show regular savings?
Lenders often look for evidence of savings, demonstrating good financial planning and your ability to make repayments. Regular savings show you live within your means.

Documentation

Do I have six months’ payslips, current, and savings bank statements?
Bring the following to your financial advisor:

• Six months’ payslips
• Current and savings bank statements
• Last year’s P60
• Statements for any existing loans

Check for unpaid direct debits or standing orders (often marked by referral fees). If any exist, understand, and explain these to your financial advisor to avoid delays.

Repayment Ability

Can I show the ability to repay, such as paying rent?
Demonstrate your ability to repay by:

• Showing a strong savings history
• Providing evidence of regular rent payments

Living Within Means

Do I live within my means, avoiding overdrafts?
Review your bank statements to ensure you’re not frequently using overdrafts. If you have an overdraft, ensure you’re not habitually overdrawn. If you don’t have an overdraft, avoid unauthorised overdrafts. Consistent savings can bolster your application.

By addressing these points, you can prepare yourself effectively for a mortgage application. Consulting a financial advisor will help ensure you meet all requirements and streamline the process.