Increasing numbers of Springtide Capital’s clients have been shocked by the extent of changes to the mortgage application process in the last six years. Many have reported that they are finding the process much more ‘challenging and time consuming’ than in previous years.
Before 2007 mortgage applications would regularly go through in under 10 working days, however clients now find they will have to wait at least 15 working days and often much longer. This has the result of delaying exchange dates and often jeopardises the entire sale.
This trend is largely attributed to regulatory change and the fact that lenders are now being far more diligent. Compared with fast track applications from 2007 which relied on a credit score alone, lenders will now ‘forensically’ examine all income and expenditure before agreeing to make an offer.
Henry Knight, Managing Director of Springtide Capital has told clients that the process can still be managed quickly and efficiently, as long as they are prepared and informed in advance of what is required.
Knight offers his top five tips for those wishing to be as organised as possible:
1. For purposes of identification make sure you have an up to date passport. If using your driving licence, ensure it is showing your current home address.
2. You will need to have a proof of address. Lenders will only accept a hard copy that has been posted to your address, rather than an online version. It must be addressed within the last three months and show the current address in its correct format. Many lenders also expect to see the first initial of the clients name showing.
3. If you are employed, you must obtain the last three months payslips and last two years P60s. These are the documents that people often have issues locating, however, you can normally obtain duplicates from your HR department if you cannot locate them.
4. If you receive a bonus, you must also demonstrate the latest pay slips for this. Again, it can be tricky to find so ask for assistance in your accounts or HR department if you cannot find the hard copy.
5. If you are self employed, you will need an SA302 form from the last three years as well as the last three years accounts. Few people have heard of an SA302 form and they are not sent out automatically. You will need to phone HMRC to request the documents and they will insist on posting them out. HMRC also only send these by second class post meaning they can take 10-15 days to come through.