Here it is: you have searched for months and finally you have found the property that will make an ideal home but you need a mortgage agreed quickly otherwise you could end up being disappointed again.
It is fair to say mortgages are not granted as freely as they used to be. Fraud is on the incline and lenders are still reeling from the pain of their liberal attitudes ahead of the credit crunch and as such they will require you to walk and somersault through the proverbial hoop – so how do you achieve a quick mortgage completion?
Well the experts in the Niche Advice Mortgage Department are on hand to guide through the reality and provide practical tips.
Key Stage 1 – The Deposit
Unlike yesteryear lender need to evidence the full deposit on has been brought forward to the mortgage application stage and it is no longer an element of the process that is reserved for the solicitors in their post mortgage Offer checks.
It is fair to say: ‘the larger the deposit – the lighter the paperwork and questions’. That said, be careful – if increasing the deposit means calling in favours from family and friends – the requirements can actually get more onerous. Lenders are absolutely paranoid on the origination of deposits. Most lender brands are already tarnished and empathy for banks is at an all time low – they just cannot afford another mishap such as providing a haven for terrorist money laundering. Nameless entries into bank statements have the alarm bells screaming. So if your father wants to give you a ‘hand up’ on the property ladder make sure it is a direct credit from his account rather than a cheque. The lender will also seek assurances that the money is a ‘gift’ and that the donor is not an interested third party. At Niche Advice we have the expertise to pre-empt the likely questions and the templates to deal with them face-on.
Key Stage 2 – Your Identity
The lender wants to know who they are lending to. You would too if you had thousands of pounds at stake!
All too often, at Niche, we see applicants with outdated passports or the lame cry that someone else pays the bills where they live. If you are not on the voters roll – do so – it makes a massive difference. If you don’t have bills take out a credit card, and clear it monthly by direct debit. In short put yourself on the map. If you are too lazy to update your drivers licence with your current address, not only are you being illegal, it portrays you in a poor light to the lender.
The lender will scrutinize the detail. If you are married and your water bill shows ‘Miss Tina Sharp’ when your name is actually now ‘Mrs Christina Johnstone’ – expect the lender to reject the document as an unsuitable proof of residency, and thus needlessly elongating the mortgage process.
Key Stage 3 – Your Outgoings
Don’t just do a ready-reckoner in your head – get out your last 3 bank statements and last 3 payslips. Deductions at source such as pension contributions, student loans and child care – are outgoings. Lenders do not like liars. It makes them uneasy. Non disclosure whether intentional or not does not go down well.
For more tips look out for our new instalment of ‘How to get a mortgage quickly’ or seek professional help, such as Niche Advice, to oversee the process.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.