The main criteria for obtaining a Residential mortgage are as follows :
Both the lender and ourselves need to be assured that you have an income that can service the mortgage payments over the long term. Primarily, the lender’s main focus is on either ‘employed’ income (PAYE/commission/bonus) or ‘self-employed’ income (accounts/tax returns). However some lenders will take other forms of income into account which could include rental income, pension income, a car allowance, maintenance payments, tax credits or child benefit.
Lenders will generally conduct a search on your credit file to make sure that the payments on current and previous mortgages, loans, credit cards, etc, have been made. However, some lenders may consider a very small number of mortgage arrears or late payments on other loans or credit cards.
Should you wish to check out your credit report in advance you can go to www.creditexpert.co.uk or www.equifax.co.uk where you can obtain a full report. Please feel free to call and discuss your credit file with us should you wish.
Generally, the greater the amount of deposit you can put down, the better the product will become available. The minimum that is generally accepted is 10% although there are some schemes that may accept less.
The property is the lender’s security against the loan and so they will typically undertake an internal inspection and valuation of the property to make sure that it is adequate for their security. Call us if you are considering a property which is not of standard construction (brick and tile) as many lenders will shy away from these.
The above criteria applies to Buy-to-Let mortgages, however, there is a key difference in respect of ‘income’.
All Buy-to-Let lenders will need to be satisfied that the expected rent to be received is greater than the mortgage payment. As an example, if the mortgage payment is £1,000 per month, a typical Buy-to-Let lender will require the expected rent to be 125% of this, i.e. £1,250 per month.
In addition, many lenders will require evidence of your personal income from employment or self employment and some will require this to satisfy a minimum amount, for example £20,000 per annum. However, other lenders do not have a minimum personal income requirement at all.