Mortgage lenders
When looking for a mortgage loan, lenders will ask you to complete a mortgage application form to begin the process. Most major lenders and a good many smaller lenders provide access to mortgage application forms online from their web site. There you can choose the type of mortgage product that you want to apply for together with the desired combinations of interest rates and discounts.
Requirements of mortgage lenders
Before making a start on filling out mortgage lenders application forms you will need to dig out various documents to help you complete their forms. It is a good idea to look for this information prior to starting the form as many lenders provide access to their mortgage application forms on a secure browser link that will time out if left open for an extended period. You don't want to get half way through the mortgage form, find you don't have the right information to hand and the form time-out while your rummaging in your files for the relevant documents. If this happens then it's back to page one of the form!
In all likelihood the documents / information that you will need includes the following: -
Proof of income*
National Insurance Number
Tax code
Existing mortgage details (if you are transferring mortgage / re-mortgaging)
Estate agent details
Bank account details
Solicitor details
*Proof of income will need to be sent to the mortgage lender. For proof of income you will normally need your P60 and pay slips going back over three months if you are employed. If you are self employed you will need to present three years worth of audited accounts and tax return forms. Additionally, mortgage lenders require proof of identity in the form of a passport / driving license and a utility bill.
Credit scoring mortgage applications
All mortgage applications received by lenders are 'scored' using a bespoke credit scoring system. This involves lenders scoring each of the answers on the mortgage application form against a predetermined scale to assess the risk that they are taking in awarding a mortgage to the applicant. Different lenders give different weights to different answers or combinations of answers. Lenders may also not set the same 'pass' score as each other, and is the reason why some mortgage lenders are willing to give you a mortgage and some are not.
If your mortgage application fails a lenders credit scoring system, you can ask them why you failed. They will not be able to give you specifics, but if they are signed up to the Banking Code or Credit Scoring Guide they can give you a general indication of where your mortgage application went wrong. Common reasons that mortgage lenders give for failed credit scoring applications include lack of stability in the applicant's life, as well as the applicant being 'over-stretched' by other financial commitments.