When taking out a new mortgage, or even remortgaging, you will need to answer questions and provide information about your finances. Here’s what you can expect…
Mortgage lenders need to ensure that the people they are lending to are able to afford their repayments, and so must be thorough in their checks. The Mortgage Market Review, which came into force in 2014, brought with it a number of stringent requirements that needed to be met by lenders, with additional rules being introduced last year to determine whether borrowers could manage increases in the mortgage rate.
Answering Mortgage Questions
Once the type of mortgage has been chosen by the borrower (often with help from a financial adviser), they must undertake a lengthy interview with their lender, where earnings and bank statements must be supplied. If the borrower is self-employed, they may be asked to provided earnings records from the past few years, as well as evidence that they will be able to find work in the future.
What To Expect...
The interview questions borrowers can be expected to answer may seem excessive, but lenders need to be as sure as they can that current and future income and expenditure correspond with the amount being loaned. The Telegraph lists 26 questions that borrowers can expect to face, which should give you an idea of just how thorough lenders are when agreeing a mortgage….
- Do you have children?
- Are you planning to start a family or have more children?
- Do you have any plans to leave your job, start a business or become self-employed?
- Do you expect your income to fall over the next few years?
- Have you ever taken out a payday loan?
- Do you ever gamble?
- How much do you spend on eating out?
- ...TV and internet subscriptions
- ...Mobile phone
- ...Gym memberships
- ...Essential and non-essential travel
- ...Clothing and footwear
- ...Personal grooming
- ...Cleaning products
- ...Dry cleaning
- ...Dental care
- ...Eye care
If you would like more help or advice in choosing the right mortgage for you, please get in touch.