What documents do you need to apply for a mortgage?
As part of your mortgage application process, you will need to provide essential documents to support your application. Ensuring you have the correct documents from the outset could make the application process easier and quicker.
To support you through this process, we’ve provided a list of everything you’ll need to provide during the application.
Identification
You must provide evidence that you are the individual applying for the mortgage. Identity theft is one of the most common types of fraud and can have devastating effects on the victim. The name on your identification can also be used to ensure the correct spelling of your name on the application and, ultimately, the formal mortgage offer document.
Many lenders will be able to confirm that you reside at your current address when they conduct a voters roll search as part of the credit check. Although, it’s likely you may be required to provide additional proof.
Photo of your passport or driver’s licence
A photo of either your passport or driver’s licence are two of the most common documents used for identification. One thing to keep in mind, is that it must be in date. An expired licence or passport will not be valid by a mortgage lender.
To add to this, ensure that addresses on either document are up to date with where you currently live. If your utility bill or bank statement show a different address, it can cause issues.
Recent utility bill or bank statement
Typically, the document you use must have a date within the last three months to demonstrate that it was issued recently. Typical acceptable documents can include council tax notices, bank statements, and utility bills.
As mentioned previously, ensure all the information is consistent with what’s on your licence. This will save any confusion which could slow the application process down.
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Proof of earnings
When applying for a mortgage, your income and affordability are key factors in determining how much a lender is willing to allow you to borrow. If you are an employee, the documentation required is fairly straightforward.
However, if you’re self-employed or have multiple streams of income, you may need to submit extra documentation.
Employee income:
- Basic pay – your latest 3 months’ payslips. These documents will need to include your and your employer’s names, both the new and gross pay, and the date of payment.
- Any overtime, commission, and bonuses should also be included. This is shown through the three to six most recent payslips and P60. The amount required will depend on the lender.
- Any annual bonuses you receive. Lenders usually require the last two pay stubs displaying bonus payment and P60
Self-employed income:
- Self-assessment tax return forms (SA302) and your tax year overview, both from the same time period. These forms can be requested for HMRC and typically lenders require them to be from the last two years.
- Some lenders may also require
Benefit income
- If you are on benefits, you’ll need the most recent three months’ bank statements and/or the most recent letter of benefits award.
Additional income
- Pension payslip for any pension income.
- A letter from your local authority if you receive income from fostering.
- For any state pensions or benefits a letter from the Department of Work and Pensions.
Proof of expenses
Bank statements
Supplying your bank statements is an integral part of the mortgage application process. It enables a lender to verify a range of things including your expenses and prove your income.
It also enables a lender to check for potential risk factors including fraud, the use of payday loans, excessive gambling or other debts.
If you have multiple accounts, a lender will want to examine each. When reviewing your bank statements, lenders are also checking the source of your deposit. They are looking to see whether the money was saved, earned, or whether it was a legitimate gift.
When reviewing your bank statements, if a lender finds issues or potential issues, this could lead to them rejecting a mortgage application.
Credit history
When you apply for a mortgage, whether it be with HSBC, NatWest, or another lender, the information you provide will be cross-referenced with the information on your credit report.
Although the lender will not require you to provide them with a copy, if you obtain a copy of your credit report prior to applying, you will be able to see exactly what is registered and verify that the information matches.
It is also highly recommended that you obtain a copy of your credit report if you are aware of or have concerns about poor credit history. This will allow you to pinpoint specific information, such as dates, that will be crucial to your application.
The three main credit reference agencies are Experian, Equifax, and TransUnion. Obtaining reports from each one is essential, as they all may hold slightly different information on you.
Any information that doesn’t look right on your report, you should get corrected. This can be done by contacting the appropriate agency and explaining what you think is wrong.
Improving your credit before you apply for a mortgage can sometimes be a great idea. This is because having better credit makes you seem less risky to a lender. In turn, this improves your chances of obtaining a more competitive deal, saving you money in interest over time.
Using a mortgage broker
Every mortgage application will be different, while one lender may require you to provide the majority of the documents listed above, another may only require a small amount.
This is why using a mortgage broker can be crucial. By discussing your needs and situation with them, they will be able to advise you on your next steps. This will ensure you put yourself in the most favourable position to obtain a mortgage.
If you’re unsure about your documents or just want to understand your eligibility, reach out today. Our advisers are on hand to discuss your needs over a free no-obligation consultation.
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