So, you've got your deposit ready to go and you've worked out how much you can afford. Unfortunately, though, the mortgage lender can't just take your word for it. Before you can be approved for a loan, you'll need to show that you're able to pay it back. Collect the following documents so you can prove to the bank that you're an attractive candidate.
Employed applicants must bring along their two most recent P60 forms. The P60 is given to you at the end of every tax year by your employer, and shows how much money you've earned and tax you’ve paid for the year. If you can’t find one of your P60 forms, don’t worry, you can ask your employer to provide a replacement.
If you're self-employed or freelance, your mortgage lender will want to see at least three years’ worth of records, from your own accountant and from HMRC using form SA302. You should also bring along evidence of any money you earned on the side or benefits you received from the government. Include anything that helps to paint a positive (but accurate) picture of your income overall.
Evidence you can handle your finances
Your lender will want to see three months’ worth of bank statements from your current account, whether you're employed or freelance, to check that you're able to handle your monthly outgoings, and to make sure you don't spend more money than you earn.
They’ll also want information on any credit commitments you currently have (such as credit cards, overdrafts and loans), as this will help them to establish how you cope with them, and whether you’re likely to struggle with an additional loan.
Proof of identity
You'll need to provide evidence that you are who you say you are. Bring along a couple of utility or council tax bills as proof of address, and one photographic form of identification like your driving license or passport.
Other key information
You're also normally to be asked to supply the following:
- details of any life or home insurance policies you have;
- information on the property you intend to buy;
- contact details of your solicitor.
With all this information at the ready, it’s time to apply for your mortgage and move to the next step of the private house sale process.