Applying for Mortgage advice

rupertbankstaylor

Hi guys - hoping you can help.

When applying for a decision in principle I have a few questions:

1) Do they ask for proof of the deposit at this point?

2) If it takes us 6 months to find a house, do they then have to run a credit check again before we buy? If so does that damage our rating?

3) When we apply, if we state we want a 90% LTV mortgage but in 6 months time when we find a place, and if we have say 85%LTV can you easily switch the product without another credit check?

4) When applying, is it more likely we will get approved if we have a 15% deposit compared to a 10%?

Thanks

kingstreet

No.

Yes. Maybe. Depends on your overall credit picture.

You don't select a product at DIP. Apply for the worst LTV and highest amount, then you won't need re-scoring for a lower amount or LTV. However, most DIPs last three months only, so you may be re-scored because of time elapsed.

You are more likely to be accepted for 85%. So, apply for 90%, then change it to 85% if declined, or you may be offered 85% automatically depending on the lender concerned.

rupertbankstaylor

Very helpful thank you.

Ok is it pretty damaging if we get turned down for 90% then do another one at 85%?

rupertbankstaylor

oh and also another question - I own 30% in the company that I work for. I'm planning on putting myself down as employed (as I have an employment contract and get paid a salary). Is that ok?

Senior_Paper_Monitor

You will be self employed by definition for most lenders (might be all - I can't think of any lenders offhand who have a higher limit than 25%).

Why would you want A DIP so far ahead of purchase ?

kingstreet

rupertbankstaylor wrote: »

Ok is it pretty damaging if we get turned down for 90% then do another one at 85%?

It isn't damaging at all. Most lenders use the first credit search and allow a "cascade" down to an acceptable LTV by trial an error, if you fail at 90%.

rupertbankstaylor

You will be self employed by definition for most lenders (might be all - I can't think of any lenders offhand who have a higher limit than 25%).

Why would you want A DIP so far ahead of purchase ?


How would they know that I own 30% of the company though?
Our broker told us to apply for it first, is not better to make sure you can get a mortgage before embarking on a house hunt?

kingstreet

They will know because the application form asks "do you own more than 25% of the equity?" and you will answer honestly, "yes."

Obtain your last three years' SA302s from HMRC and you will have the evidence they need instead.

rupertbankstaylor

When you say application form - is this for particular banks or do all banks ask that question? I just did a fake application on Chelsea building society for a DIP and didnt ask for that question...

I cant do three years SA302's my companies a start up and doesnt make money (yet!), we are funded by business angels.

kingstreet

It's not asked on a DIP, it's asked on the full application.

rupertbankstaylor

Thats very frustrating, what a ridiculous rule, I'm on a salary just like all my staff who are capable of getting a mortgage on a smaller salary. How frustrating. Any ideas on what I can do?