4 Important Documents to Have Ready Before Seeking a Mortgage
Getting a mortgage can be an uphill struggle, and one of the main ways to make it as stress-free as possible is to prepare properly before you apply.
Having the right paperwork to hand is a big part of this, so if you are in the dark about what you will need, this checklist of must-have documents will set you on the right path.
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Proof of income (e.g. paystubs)
A top priority to provide prospective lenders when seeking a mortgage is proof of income, since you will only be eligible for approval and capable of getting the best rates if you can demonstrate that you are bringing in enough cash to keep up with the repayments.
There are a few things that are accepted as proof of income, with paystubs being one of the most commonly provided documents for this purpose. If your employer does not issue you with paystubs, then you can address this by using a paystub generator to make your own with all the relevant info included.
Another example of a proof of income document is a tax return, and this will typically be requested if you are self-employed, freelance or a contractor in some shape or form, rather than someone with a permanent role at a company.
Bank statements
Your income is one thing, but mortgage providers also want to see that you are responsible with the money you make, which is why sending in bank statements to support your application is entirely normal.
Different lenders will require bank statements covering different periods, but it is typical for banks to require at least three month’s worth of statements. This means that they can assess your spending habits and see whether there are any red flags which might make you a bad prospect for a mortgage, or indeed good signs that you are sensible enough to become a customer. A good mortgage company like Altrua Financial will need to see these documents before offering a rate.
Credit report & explanations
Mortgage firms will be able to pull up your credit report from one of the relevant issuing agencies automatically without you needing to do anything, other than giving them permission to go ahead with this. So while you will not need to provide the document yourself, you should be prepared to issue any explanations which may be necessary if the data included in the report is potentially detrimental to your chances of approval.
For example, even if there is an instance of you being denied credit in the past, which might count against you, if this was done in error or there were some other mitigating circumstances, being able to both explain this in writing and prove it with any other correspondence and supporting evidence, could be crucial.
Gift guarantees
As house prices are still rising, lots of first time buyers need additional support from friends and family members in order to build up a deposit to put down against their mortgage. Lenders will be accepting of this, but you may be asked to get written confirmation that any financial gifts you are using to secure your house loan are just that.
This is because if you were to claim that you had received a gift to bulk up your deposit, but this was actually a loan from a third party, then there would obviously be repayments to factor in as part of your monthly outgoings, which would impact the affordability of any mortgage you were offered.
Remember that your chosen mortgage provider could have its own stipulations for documents to submit with your application, so check the small print to avoid being caught out.
