UK mortgage applications are just about to become lengthier and more detailed, as lenders scrutinise potential first time buyers with a fine-toothed comb.
New regulations, which came into force at the end of April, required applicants to have their financial details closely examined by regulators to ensure that they could afford to pay back loan sums and meet their monthly repayments.
Research in the past by Money Advice Service has found that homeowners have miscalculated the true cost of taking out a mortgage, as well as funding the costs of running their new home, resulting in them struggling to cope with looming repayments and therefore getting into financial difficulty.
Evidence of income can include up to six months of payslips and bank statements, and any other allowances. The full details are included in a mortgage checklist presented by Money Advice Service. It’s designed to prepare people for their application by listing the documentation they may be asked to provide to the lender. You can have a look it yourself by looking at the graphic below.
Another useful reference tool is their mortgage calculator, which can help applicants to work out if they can realistically afford to meet monthly mortgage commitments. You can try for yourself by clicking here.
An infographic brought to you by Money Advice Service