A mortgage application is not a mystery. Every lender looks at the same five things, in roughly the same order. If you know what they are, you can fix most problems before they cost you an offer.
1. Income
Salary, bonus, overtime, commission and, for the self-employed, two or three years of accounts or tax calculations. Lenders differ on how much of variable pay they count; that is one of the main reasons the same person gets different answers from different lenders.
2. Outgoings
Loans, car finance, credit cards, childcare, maintenance. These reduce what you can borrow. Clearing a small loan before you apply can add more to your borrowing than the loan was worth.
3. Credit history
Missed payments, defaults and county court judgments all matter, and how much they matter depends on how old they are. Check your file before we apply. A wrong address or an old account you forgot about is easy to fix and can move you a whole rate band.
4. Deposit
How much, and where it came from. Savings statements, a gift letter, or completion statements from a sale. Lenders are required to ask, so gather it early.
5. The property
A valuer confirms it is worth what you are paying and that it is standard construction. Flats above shops, timber frames and ex-local-authority high rises are all lendable, but not by everyone. Tell us early and we go to the right lender first.
