Should we apply for a mortgage in principle now, or later?

jacr100

First post here – any advice will be very much appreciated :-)

My wife and I are planning to buy our first property within the year. We’re not sure whether we should approach banks and/or mortgage advisers now, or wait.

Essentially that’s because I’ve been working voluntarily for four days a week since December, to spend more time with my new son. From September I go back to five days a week, and in December I’ll receive a bonus equivalent to around 30% of my salary.

My wife is on maternity leave, and will go back to work three days a week from October. She is also due a bonus in the next couple of months and will move up a pay level within the year.

We already have sufficient deposit. All we’re thinking is: will banks or mortgage advisers take our word for it when it comes to returning to work for a certain number of days, bonus payments etc, without the payslips to prove that? Or should we wait until the money is in the bank and the new payslips in place, on the grounds that we will then be more likely to be offered the mortgage amount we’re looking for?

As we're new to this, it would be great to know how banks and mortgage advisers are likely to approach those in our kind of situation.

Thanks!

Thrugelmir

There's little point in doing anything until you are actually at the point of seriously considering purchasing a property. As what matters is your circumstances at the time, i.e. when you apply. Lenders aren't crystal ball gazers. They work on the facts only.

jacr100

Thanks for the reply Thrugelmir

I think we are at the point of seriously considering purchasing a property – what I'm not sure about is whether banks or mortgage advisers will take note of additional income or changes to salary due to come in over the next few months, if we can provide evidence of those.

What you've said suggests that they will discount them, and are likely to focus purely on income over the previous six months. That makes me inclined to wait until the changes I referred to are concrete, as we'll be offered a higher mortgage as a consequence.

Thrugelmir

jacr100 wrote: »

what I'm not sure about is whether banks or mortgage advisers will take note of additional income or changes to salary due to come in over the next few months, if we can provide evidence of those.

If you were formerly applying for a mortgage today. Then no. As far as the lender is concerned there's no certainty that this will be the case. Your circumstances as at today are what counts. .

Jkbc90

I'm not an expert, but we have been in contact with our broker for a year and a half (mortgage application only went in last month), he has guided us on what we needed to do etc before applying for a mortgage. It might be worth talking to a broker to see what they think. Good luck

jacr100

Thanks Jkbc90 - I really had no idea you could talk to a mortgage broker that far in advance. We'll contact one and see what they advise us to do.

Jkbc90

No problem, it was all free advice and we only paid him once the paperwork and applications started. There are brokers who don't charge a fee but after researching the ones in our area we decided to pay the fee and use him. Best of luck

theoutdoorman

What really matter is - that they are going to ask you for the last 3 months of pay slips and may be your P60 - proof of income.

That's what they are going to base your offer on.

They may take into account your bonus - but only after if its paid and generally only a percentage as it's not guaranteed in future years.

Most mortgage in principles are also time limited - may be 6 months.

We have just applied for an mortgage offer and that was sorted in principle within two days and an actual offer was within 10 days.

Just pick the right broker.