Experts Reveal 5 Ways to Lock In A Mortgage Quickly

Data shows that searches for “mortgage rates” have increased 164% in the past month

With interest rates on the rise, more people are looking to speed up their mortgage applications to ensure they get the best rate. Data shows that searches for “mortgage rates” have increased 164% in the past month! With almost 174 MILLION people discussing mortgage rates online there are a lot of questions swirling on the internet such as “is it too late to lock in mortgage interest rate” and “how to secure the best mortgage rate”. The experts at private and commercial banking firm Arbuthnot Latham have provided some expert information and revealed the 5 ways to lock in a mortgage rate quickly.

The two crucial steps in securing a mortgage are passing the affordability assessment and meeting the lender’s underwriting requirements, both of which require several documents to be provided explains James Glover, Head of Regulated Lending, Arbuthnot Latham.

Did you know that the most common reason for a mortgage application being delayed is that the required supporting documents are not being provided promptly?

There are crucial documents you need to have in place to help the mortgage application move through as quickly as possible.

Below are five things to prepare ahead of time to move your application along and lock in your mortgage rate fast:

Proof of Income

This requirement will vary depending on your employment status and source of income, but fundamentally you need to evidence that the income you have previously received will remain sustainable or that any future income (for example: starting a new job) will continue for the foreseeable future.

This can be done through a variety of methods, such as providing copies of pay slips, P60’s, SA100’s or HMRC tax computations.

Depending on your employment status most lenders will ask for your last three month’s pay slips if you are employed under a permanent contract, for those who earn bonuses or commission the lender may request your last three P60s or pay slips showing the received payments to ascertain a yearly average.

If you are self-employed then your last three years’ tax returns (SA100’s) and HMRC tax computations will be required.

If you are also a director/shareholder of your own company, the lender may request the company’s last three years’ accounts, to verify the income you draw is sustainable.

Proof of Expenditure

Most lenders will request copies of your last six months of bank statements. Lenders are looking for statements that show the income you have received versus payments you have made, therefore if you use different banks or different accounts within the same bank, you may be required to provide six months statement for each bank or account to meet this requirement.

It can also save you time if you make your lender aware of any anomalous payments you have made in the last six months, these could include one-off purchases or transfers as these can be flagged by the lender.

Evidence of Existing Debts

Lenders have several ways to identify existing financial commitments, but it is often easier to highlight these as part of the mortgage application process.

The most common forms of financial commitments are existing mortgages that will continue after the mortgage you are applying for is drawn, car finance, lease or hire purchase agreements, personal loans, and credit cards.

Each lender will have different documentation requirements for each type of financial commitment so having them all available is better than waiting for the lender to request the parts they need.

For mortgages, the most common requirement will be the latest mortgage statement, for the various forms of car finance, the contract you signed will usually be sufficient, for personal loans the contract you signed or the latest loan statement will be requested and for credit cards (with an outstanding balance or a balance repaid in full each month) the most common request is the last six months statements.

Property Details

The most important detail to have is the correct address of the property you wish to buy.

In addition, lenders will often want to know the property type, number of bedrooms, bathrooms, and any unique features, such as it being a listed property. One of the easiest ways of fulfilling this requirement is by retaining a copy of the property brochure (if this is online, it may be worth saving a copy to your computer as estate agents can remove them once a purchase is agreed).

Contact Details

Make sure your lender has your up-to-date contact details and that they are aware of your contact preferences.

There could be other documents required by a lender to assess and agree on a mortgage, therefore the key to securing a mortgage quickly is to respond to your lender’s requests for information as soon as possible.

Your property may be repossessed if you do not keep up repayments on your mortgage. If your income is not in Sterling, movement in the exchange rate could make it difficult for you to afford your mortgage repayments.

This communication is for information purposes only and does not constitute advice, a solicitation, recommendation, or an offer to buy or sell any security or other investment or banking product or service.

Kindly shared by Arbuthnot Latham

Main article photo courtesy of Pixabay