There’s a lot hanging on it. Finding a mortgage is never the simplest and most straightforward of matters. So, you want to instruct a mortgage adviser to help you. He or she are there to do just that and you want to make your first appointment count.
To set off on the right foot and to do all in your power to make the business of getting a mortgage as smooth and painless as possible, what do you take to see a mortgage adviser?
Helpfully, online listings site Rightmove suggests the answer:
- photo ID;
- proof of address;
- your last three payslips or pay advice;
- your latest form P60; and
- the last three months’ worth of bank statements.
The photo ID, of course, is needed to confirm your identity and may take the form of your passport, driving licence or any other official document bearing your name and photograph. Providing your proof of identity is a required anti money-laundering measure which also prevents criminals from illegally obtaining financial products and services.
Your proof of address is also an important part of your identification when any potential lender uses it when requesting your credit history from the credit reference agencies. The latter also use that address to check whether you are inscribed on your local electoral roll – an important measure in recording your credit rating.
The payslips, P60, and bank statements will all help to provide any mortgage broker with proof of your current income – and earnings in the immediate past.
If you are self-employed, you may need to be prepared for the fact that some lenders will require up to three years’ worth of audited accounts – or confirmation of your earnings for the same period as provided by a form SA302 (provided by HM Revenue & Customs as proof of your declared earnings and tax liability for the years in question).
It is worth emphasising that there is little point in exaggerating your income in the misguided belief that you are increasing your chances of a better mortgage offer. If a mortgage adviser subsequently becomes suspicious of the earnings information – or any other information, for that matter – there are established protocols agreed between lenders and HM Revenue & Customs to cross-check and validate the details you gave.
You get to ask the questions too
Getting off on that first foot with your mortgage adviser is the beginning of a two-way process. Just as the adviser is likely to ask you a number of questions and to provide some documentary evidence, so it is also your opportunity to ask whatever you want to know about getting your mortgage.
What might you want to ask?
- perhaps the first question to ask is for confirmation that your adviser is authorised and regulated by the Financial Conduct Authority (FCA) – registration is mandatory for anyone holding themselves out to be any kind of financial adviser, including a mortgage adviser (you can do your own investigation by searching the Financial Services Register);
- you also need to establish what your mortgage adviser is going to charge – some may charge you a flat-rate fee or one that is based on a percentage of the mortgage loan you are seeking while other advisers charge you nothing at all and rely solely on the commissions they charge the mortgage lenders for whom they are providing business;
- since you have gone to the effort of putting together the information and documents in support of your earnings and income, ask your adviser how much that suggests you are going to be able to borrow – different lenders may vary in exactly how much they are prepared to offer but your mortgage adviser is well placed to offer a fairly accurate ball-park figure;
- closely related to your questions about how much you are likely to be able to borrow is a question about how much deposit you will need – this depends on the loan to value (LTV) ratio any lender is prepared to offer, which may, in turn, depend not only on your financial means but also on the type of property which you want to buy; and
- with answers to those basic questions, you may be better placed to understand your adviser’s explanation of the different types of mortgage likely to be available and which type is likely to suit your particular needs and circumstances – a straight forward repayment mortgage, for example, a variable or fixed-rate mortgage, an interest-only mortgage, or an offset mortgage, to name just a few of the possibilities.
With a full and frank exchange of questions and answers, therefore, you and your mortgage adviser may be well on the road to identifying the most likely lenders and the type of mortgage that will be the most appropriate for you.
Further reading: What documents do I need to apply for a mortgage?