You’ve already done great and saved most of the money for your mortgage. Now it’s time for the next step; getting prepared for a mortgage! We’ve put together a list of some helpful advice for First Time Buyers in Liverpool, in order to help you become ‘mortgage ready’.
Before you even come to a Mortgage Broker in Liverpool, you should always aim to get an up-to-date credit report. It’s recommended that you pay off any outstanding payments you have, even if you’re holding off on certain payments due to conflict of principles. Once you’ve done this, you’ll have less going against you financially, putting you in a better place for getting a mortgage.
Another recommended action is to make sure you’re on the voters roll, as that can seemingly have a positive effect on your credit score. Closing down old credit cards also will benefit you greatly. Your Mortgage Advisor in Liverpool will run through your credit report in the early stages, providing expert advice on what they feel you could do to further improve your credit score!
At the beginning of your home buying process, you’ll be asked to provide some photo ID. Our customers usually bring a driving license or passport.
Your driving license can be quite a useful tool in regards to your address too, although you can only use it for one of the options. This means that if you’re using it for photo ID, you’ll need something else to showcase proof of address. Any non-UK nationals now residing in the UK will need to show us a copy of their Visa.
You’ll also need some documents that prove you live where you say you do. The normal choices here are utility bills or original bank statements that are dated within the last 3 months. Alternatively, as mentioned before, if you’re using a passport for photo ID, you can use your driving license as proof of address.
Your bank statements should show proof of your income and regular expenditures. We would highly suggest customers don’t gamble leading up to this, as the lenders can hold this against you. The same goes for going past overdraft limits and letting direct debits bounce – It’s imperative to get prepared.
The majority of lenders will ask to see your bank statements, as they like to have concrete evidence that you will be able to keep up your monthly repayments. The bank statements usually needed are the ones that show your salary going in and your bills going out.
As a First Time Buyer in Liverpool, you will have to show that you definitely have the funds in place for the deposit and be able to provide evidence of this for anti-money laundering purposes. Audit trails can prove difficult if money has been moved between accounts too much, so it’s recommended this be kept to a minimum.
Lenders prefer to see you building up your savings, so you’ll need to account for any vast amounts that have been transferred into your accounts recently.
Nowadays, we find that deposits are often gifted by family members and are the most popular choice for First Time Buyers to take that step onto the property ladder. These need to be evidenced also, with the “donor” needing to sign a letter confirming it’s non-refundable.
The most important thing when it comes to affordability is proving where your income comes from. If you’re employed then this will usually come from your last 3 months of payslips, with some lenders needing to see your most recent P60. Lenders may also take into account regular overtime, shift allowance, bonuses and commission. If you have more than one employer (maybe you have a part-time job or are self employed), lenders will accept earnings from those also.
We find that most applicants are self employed and seeking Mortgage Advice in Liverpool. Self Employed applicants will need help from their accountants to request their last 2-3 years’ proof of earnings from the revenue. Our Mortgage Advisors in Liverpool are able to have a chat with you and explain what to download from the government gateway if you have access to those accounts yourself.
It’s always best practice to do your homework and write down an estimate of what you think your outgoings might be after you move to your new home. This will help you work out costs such as council tax and utility bills, as well as regular expenditures like food and drink.
It will also help determine how much disposable income you’ll have available to pay your mortgage from. Before we go forward with our appointment we’ll send you a copy of our budget planner, which hopefully can help you with this.
As you can see from all of the above, getting prepared for a mortgage is no easy feat, although with hard work and care it’s still achievable! Putting in the effort from the start, staying patient and being careful will hopefully increase your chances of securing your dream property.