What Documentation Will a Lender Want to See?

  • 3 months payslips (Israel)
  • 2 years most recent P60 or 1040 (UK or USA borrowers only)
  • 3 months bank statements

What is “Approval in Principle”?
An approval in principle is simply an indication of the amount of money that a bank will lend you to purchase a home. The approval is based on the information provided by the customer and is contingent on their income.

What is Self-Certification?
There are many benefits to being self-employed and running your own business. However, getting a mortgage isn’t always one of them. Lenders like to see documentation that shows a good steady income and good indication that this income will continue. Self certification (also know as self certified) mortgages are ideal for applicants whose income is not easily verifiable, or when accounts have not been audited.

If you are self-employed, a company director, or a contract worker, you may be unable to provide audited trading accounts. As a consequence, it can be difficult to secure the mortgage you want.

In short, if you know you can pay a mortgage, but have difficulty proving it in the usual way, we can help.

How Much Can I Borrow?
This depends on your income, your savings and which lender you go to. It can be based on a multiple of your income (and your partner’s income if applicable). However, most lenders base the loan amount on your disposable income. They look to see that your mortgage repayment does not exceed 30-40% of your net income after all other loans are paid each month. For first time buyers, it is very important to shop around to see what is available. At IMB, we do the searching for you and will advise which lender would best suit your circumstances.

How Long Does the Mortgage Process Take?
For normal house purchase mortgages, first time buyers, or existing homeowners moving homes, the length of the process is determined by the legal process more so than the mortgage process. It would be unusual for the mortgage process to delay matters. The average is 4-6 weeks. In relation to remortgages or switcher mortgages, where there is no house purchase involved, it can take as little as ten days, particularly if the loan is being refinanced at the same lender.

What is Mortgage Life Insurance and Do I Need It?
With a few exceptions, mortgage life insurance is compulsory when you take out a mortgage. It is, essentially, a life-cover plan which pays off the mortgage in the event that one of the mortgagees dies during the term of the mortgage. It is also possible to add critical illness cover to the life cover, but this is optional. This pays off the loan in the event that one of the mortgagees is diagnosed with one of the specified illnesses listed on the contract.

What is an Interest-Only Mortgage?
An interest-only mortgage is where you only repay the interest on your mortgage debt each month. Alongside this you will need to put money into a separate investment vehicle which is designed to grow sufficiently to pay off your loan when your mortgage comes to an end. You are responsible for the repayment of the capital when the mortgage reaches the end of its term.

What costs can I expect when buying a house?

  • Appraiser Fee: A valuer will assess the value of the property you wish to buy to ensure that it is worth at least its asking price for the purposes of the mortgage. The lender may insist that the valuer is chosen from their own panel of valuers.
  • Surveyor’s Fee: We recommend you arrange a survey to confirm the structural soundness of the property you propose to buy. This will allow you to identify any faults and factor these into your renovation budget.
  • Legal Fees: You will need a solicitor to make sure that that everything is legally in order for the house-buying process. Solicitor’s charges can vary considerably, so it’s worth shopping around.