Let us look at what documents you will need to apply for a mortgage.
What you will need to provide will vary from lender to lender. However we will cover in this article thorough documentation that should be generic in nature and therefore satisfy most lenders and broker requirements.
Buy to let or residential?
The type of mortgage you are applying for whether that be a residential mortgage or a BTL mortgage, will determine in most cases what documents are needed. For BTLs most lenders use the estimated rent as the basis for lending so in these cases often no proof of income will be required. Whereas a residential mortgage is based on affordability and in all cases proof of earnings the lender will ask you to evidence
The lender or broker will always ask for proof of your name. Typically two forms of ID will be required for this. Usually a passport or driving licence will be OK for name ID
Proof of address is also required. This can take the form of a council tax bill, electricity or gas bill, bank statement, credit card statement etc. Typically these need to be dated within 3 months
Income Proof Documents Required
For someone who is employed then usually you will need to supply atleast 3 months worth of payslips. Sometimes lenders also ask for the latest P60 to support the payslips.
For a self employed person then typical you will be asked to supply the latest 2 years tax calculations and tax year overviews. Sometimes a lender may ask for signed accounts or they might also write to the accountant for an accountants reference.
Proof of income from both self employed and employed is usually also evidenced by providing the latest 3 months worth of bank statements. Lenders can check these to make sure that you are not going over the overdraft regularly. They can also go through the bank statements to look for any undeclared commitments such as loans and credit card payments. They might also look for other regular commitments such as child care payments or maintenance payments which do not show up on the credit file.
Bank statements usually need to be provided for the salary funded bank account and also the bill paying bank account therefore the lender can see the full picture.
Deposit documents needed
Most mortgage applications will require proof of the deposit to be evidenced.
- Deposit from saving – If the deposit is all from savings then the proof required will be 12 months bank statements showing build up of the funds. If the funds were saved quicker over perhaps 6 months then just 6 months will be needed. Any large transactions going in to the bank will also need to be looked at. For example if you inherited some money or sold a house. In that scenario you would also need to provided proof of the sale or a Will or letter from a solicitor about this.
- Gifted deposit – If some or all of the deposit is from a gift then normally a letter from the family member gifting the funds stating it is a gift, non refundable and they are taking no stake in the property will be needed. Also proof they have the funds available will usually be required
- Mixed deposit – If part of the deposit is savings and part from a gift then in that case both of the above will need to be evidenced.
It is the lenders or brokers responsibility to ensure the source of funds for the deposit is from a ligitomate source and thus they need to be satisfied that the funds are from genuine sources and do not come from money laundering activities. Therefore it may seem in some cases quite detailed and unnecessary but the broker and lenders are just carrying out their role to the best of their abilities.
Other miscellaneous documents beeded
- Property purchasing details such as address, type of property, number of bedrooms etc
- Estate agent details such as email, phone number address etc
- Card number expiry date and CSV for any valuation fee required.
- Bank sort code and account number for direct debits.
- If you have an existing mortgage then they might need existing account number.
- They might need addressees of your employers
- They might need contact details for your accountant.
- If the application involves proving any benefit income such as child tax credits, disability living allowance. Or other benefit income then the benefits award letter might also be needed.
The above post attempted to give a description as to what documents might be needed to apply for a mortgage. However the documents needed are bespoke to each applicant and also to each broker or lender. We would therefore suggest checking with a broker and asking them what documents you will need for your own unique situation.