First time buyer questions

suparman

I have a couple of questions about the process of completing on a purchase, especially with dealing with a lender.
I’ve approached an online-only broker, been given a mortgage in principle and worked out what deposit we would need. We would have the deposit at the end of March 2020.

A few properties have come onto the market that we really like, are chain free and would mean we can move out with only a short cross-over of our current tenancy.

Could someone help with the questions below:

1) My partner has been given a payrise in January 2020 and we would be basing our potential LTV on my partner’s new income. I currently understand that we would need to evidence our income with 3 months statement/payslips. Is that correct? So the soonest we could evidence our new income would be end of March 2020? Our friend’s broker said that he could use a letter from his employer confirming his new salary so he could apply sooner than waiting for more payslips. Is that a possibility or a fib?

2) At what point in the process do we need to provide proof of income and proof of deposit? Would it be as soon as the offer is accepted?

3) Would I be able to put in an offer a couple of weeks or a month sooner than I had the full deposit ready and the 3 months bank statements/payslips?

4) Are there more things we need to do/do we need to approach a lender in between getting a Mortgage in Principle and putting in an offer?

5) Are there any other things we can get ready to speed up the process?

Thank you oh, wise ones!

ReadingTim

Why don't you approach an off-line broker, and ask these questions to them - that's what they're there for, and will be best placed to tell you what lenders require, compared to randoms off the internet.

London & Country are pretty good, in my experience.

jimbo2108

Hi,

I have just gone through the mortgage process!. I started my job in Sept 19 and only had 1 month of payslips at the time I had to provide evidence, I had to send my contract to provide proof of income (signed) so a letter should suffice (as long as its signed). I put an offer in before I applied for my mortgage providing that you meet the criteria. One way to speed up the process is to hassle your sol when you get an offer accepted on a property otherwise they like to drag there feet!
On a side note, I didn't use a mortgage broker I did it all myself and went smoothly!

TiberUK

My partner was given a pay rise about a week before we applied, it was only on one of the payslips, but the bank worked out her income based on the new wage, not the old one.

suparman

thanks for your responses guys,

I have approached an off line broker that 3 people in my family have used previously but he hasn't responded to us yet, hence the questions.

How many days/weeks were there from putting in your offer to need to supply the proof of deposit?

jimbo2108

I talked to the mortgage team from Halifax on the Friday and had to supply the proof of income etc on the Monday. Proof of deposit only needs to be shown to the Solicitor and this generally has to be done before exchange of contracts.

smdabs

1) My partner has been given a payrise in January 2020 and we would be basing our potential LTV on my partner’s new income. I currently understand that we would need to evidence our income with 3 months statement/payslips. Is that correct? So the soonest we could evidence our new income would be end of March 2020? Our friend’s broker said that he could use a letter from his employer confirming his new salary so he could apply sooner than waiting for more payslips. Is that a possibility or a fib?


- Most lenders will accept a certified letter directly from the employer and it usually must be on company headed paper.

2) At what point in the process do we need to provide proof of income and proof of deposit? Would it be as soon as the offer is accepted?



- To get an agreement in principle, you don't need to have an offer accepted on a property, just basic details of the intended property purchase.


Once you submit a full application, it would (or should) be on the house you have had an offer accepted on as the lender needs to arrange a valuation and to undertake their affordability checks. A lender would not check that you've had your offer accepted, they conduct their affordability checks regardless of the house you are buying however it would be wasted time if they do these checks to then find they cannot offer you a mortgage on the house based should there be any issues with the survey so my advice would be to wait on submitting a full mortgage application until you have had an offer accepted.


Once you've had it accepted, they would need ID, income and deposit proof as soon as they request it so it should be ready to provide asap (if you want to move quickly).

3) Would I be able to put in an offer a couple of weeks or a month sooner than I had the full deposit ready and the 3 months bank statements/payslips?


You can put an offer in as soon as you want to however that isn't to say the seller will accept if they find out you don't have the necessary documents or funds to proceed. Not having this ready (especially the deposit) will delay the process and likely to cause a lot of frustration for a seller.

4) Are there more things we need to do/do we need to approach a lender in between getting a Mortgage in Principle and putting in an offer?


Putting an offer on a house is completely separate from your mortgage application.
The lenders will be ready to take your application forward as soon as you tell them to but you should wait until you've had your offer accepted.


Aside from getting the necessary paperwork together for the lender, nothing else is needed.

5) Are there any other things we can get ready to speed up the process?


- Make sure you have your paperwork ready. The certified letter from your partner's employer, your bank slips, proof of deposit (and proof as to how it has been accrued. Savings statements 3 - 6 months or a signed gift letter should you be receiving one, you can find a template online).


- Make sure your credit file is accurate by checking on Experian for any unknown defaults so you can try and resolve this BEFORE you submit the full application. If you have numerous missed/late payments, this could cause issues with your affordability checks.


- Check the purchase price vs your deposit, do a comparison check to see if there are any better rates available to you for your LTV (Loan to Value). Alternatively, approach a broker who will do all of this for you.


- Decide what type of survey you want completed on the house and when submitting your application to the lender inform them of the type of survey you want, otherwise they will arrange the standard mortgage valuation and it is likely to cost you more if you decide to then get an independent one after the fact.

smdabs

suparman wrote: »

thanks for your responses guys,

I have approached an off line broker that 3 people in my family have used previously but he hasn't responded to us yet, hence the questions.

How many days/weeks were there from putting in your offer to need to supply the proof of deposit?

They requested this information from me on the day the accepted my full application (Halifax) but it very much depends on the lender and their timescales. Some drip feed their requests (biggest pain in the a**) as and when they get round to assessing the information, others ask for it upfront.
It may be that they decide they need further information later down the line, this is more often than not for 'non-standard' or more complex applications (e.g. they can't confirm your income/expenditure or your credit file shows different information than what you've supplied)


Also just to confirm - your lender most definitely will want to see your proof of deposit and know how these funds were accrued. They have to see this to ensure they are compliant with their anti money laundering requirements. Think someone at Halifax may have misinformed Jimbo.

jimbo2108

[/QUOTE]
Also just to confirm - your lender most definitely will want to see your proof of deposit and know how these funds were accrued. They have to see this to ensure they are compliant with their anti money laundering requirements. Think someone at Halifax may have misinformed Jimbo.[/QUOTE]
I never had to show proof of my deposit to Halifax and still got a mortgage through and now im my own property.

smdabs

This is very unusual unless you used their own recommended solicitors where the solicitors would have internally supplied them with this proof. They have strict anti-money laundering regulation and guidelines to follow to ensure deposits are from legal sources and where your deposit is from is a vital piece of info in the mortgage selection process - some lenders accept sources where others would decline.


I completed with Halifax at the beginning of this month, initially the deposit was coming from a house sale (they couldn't ask for proof except for confirming the details of my property and the sale price) however when I changed the deposit vehicle in the form of gifts, Halifax requested not only the gift letters, but also the bank statements of the giftors (3 months, solicitors asked for 6) to show how the money was accrued.


From my years of mortgage underwriting, I can confirm that numerous lenders most definitely request proof of deposit and will not progress and application until they receive such.

jimbo2108

Well yea that's what I thought when I didn't have to supply my bank details, I used a solicitor that wasn't recommended by themselves (was on the board of solicitors). The solicitors didn't want to see 3 months of statements showing how the deposit was accrued just that I had the deposit ready. I think my case is very unusual and unlikely to happen again!