You will need to provide payslips, a bank statement, revenue and customs documentation to confirm your income. You will provide an income form summarizing your income and deducted tax that you receive every year from your employer. If you are self-employed, lenders will most likely reject your application. Mortgage lenders often tend to work with individuals who have a permanent job with a stable income. Your income size determines the size of the mortgage loan you receive. You cannot receive a loan that is greater than your income. It is only sensible you take on a loan you can manage to pay
Even with similar incomes, the commitments of different individuals may not be the same. Mortgage lenders also check your outgoings. Checking on your financial commitments helps mortgage lenders to estimate the effects of future interests on your finances. Mortgages together with commitments like loans, credits and cash advance may make your finances become unmanageable. Paying off all these loans at one go may leave you with nothing to spare for your basic necessities. Mortgage service providers will ask for credit receipts and any documentation concerning full loan repayments to ensure you have minimal commitments and can be able to keep up with mortgage payments. When submitting your application, make sure you don’t have outstanding loans.
You may opt to borrow form a mortgage that calculates their monthly payments on interest and repayment, the most you can get is 75% of the property value. You can apply up to 90 % of the property value if the monthly payments are calculated on a repayment only paying method.
Some lenders will check how long you have been employed in your current job before approving your mortgage request. If you have been in your current job for more than half a year, you are more likely to get a loan approval. Switching jobs right before you request for a mortgage will lead the lenders to decline your application.
You must be 18 years old and above to apply for a mortgage. Individuals over 75 years old cannot apply for a mortgage using payslips and credit card statements. Instead, their retirement income will be considered.
When calculated, your monthly housing costs should not be more than 30% of your monthly income. The housing costs are calculated from property taxes, home insurance, homeowners’ fee and the mortgage while income includes your monthly salary, part-time and overtime jobs, social security benefits and retirement funds.
Getting a mortgage as a foreigner can be easy provided you meet their legal requirements. The paperwork needed include your identification documents, UK legal residence proof, credit card checks and bank and utility statements. Individual companies make their own rules about providing a mortgage to foreigners. Do a research on a few different mortgage providers and choose one that will cater to your needs. Mortgage offered to foreigners has slightly less favourable conditions compared to those offered to the natives. They have a higher interest rate and more strict policy.