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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
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Question
What documents should I get ready?
I am about to take my first step on the property ladder and would like to get some advice about what information I should prepare for my lender/broker?
I know I need bank statements but should I print these out or will the mortgage company be able to access these? Do they need to see payslips etc? And is there anything else? Thanks for your advice.
Answer
How exciting! So, the main documents you will need are:
• Proof of identity (passport/driving licence)
• Utility bill from within the last three months
• Three months of payslips & P60
• Three months of bank statements
• Proof of deposit (usually shown in bank or investment statements)
You can get hard copies of these, but a lot of lenders now accept scanned/downloaded copies. Some even use Open Banking for financial information, which gives them temporary access to your bank statements online.
Depending on your application details, some lenders may ask for more than the above list, but it’s a good starting point. A mortgage broker will be able to help you getting everything together – good luck!
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Question
Family assist – can I get help from a friend?
I have heard there are mortgages which allow parents or grandparents to support their children with a home purchase.
None of my family is in a position to help me with this but I have a friend who has offered to be a guarantor on a mortgage for me. Will we be able to proceed with this arrangement?
Answer
Having a friend as a guarantor would be unusual, and I think some lenders would be wary of it. Ultimately, the guarantor is liable for the mortgage, so it’s a big responsibility.
Don’t lose hope! I’m sure a knowledgeable, whole of market mortgage broker will be able to find a willing lender and make your case!
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Question
Two self-employed borrowers: Can we get a mortgage?
My boyfriend and I are both in our 30s and have been renting for, what seems like, an eternity. We have saved a very significant sum of money to put down as a deposit but I have seen in the press recently that self-employed borrowers are being rejected because of the problems created by the pandemic.
I am a hairdresser and my boyfriend runs his own building business. We actually managed – through very clever management and taking advantage of self-employed government support – to keep our finances on track during the pandemic and we have both experienced a boom in our businesses and have been working extra hours when restrictions were lifted.
We have £32,000 in our deposit fund. Do we stand a chance of getting on the property ladder or should we wait a few more years?
Answer
When lenders lend to self-employed borrowers, they like to assess your income over the last two years. Doing so gives them a better understanding of your financial situation and whether the mortgage you want is affordable.
Lenders are mindful that the pandemic has impacted many people’s incomes, but now things are returning to normal. Rest assured, it is still possible for self-employed individuals to get a mortgage, but lenders are scrutinising applications more than pre-pandemic.
I’d recommend speaking to an experienced broker who can look over your finances for you and advise how lenders are likely to respond.
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Question
Do-er upper: Can we borrow additional money for building work?
My partner and I are looking at purchasing what can only be described as a ‘wreck’ of a house and we plan to renovate the property to live in.
We are staying with my parents rent-free during the renovation. The house in question is £150,000 for which we have a 20% deposit and the building work looks set to cost us another £100k – at least!
Can we include the cost of the renovation work in our mortgage? And, if so, do we need to get specialist deal?
Answer
There are mortgages specifically designed for these types of projects where funds are released to cover the cost of works.
They are specialist and thus more expensive than traditional mortgages, so it’s worth exploring your options. I would strongly suggest speaking to a mortgage broker specialising in these projects to get the best advice for your situation.
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