Considering buying a property for the first time? Thinking of moving homes? Better yet, planning on releasing equity? Are you trying to secure a mortgage and wondering what kind of questions mortgage advisors Edinburgh will ask? Well then, this guide is for you.
At Bespoke Home Finance, we want to ensure you’re well informed and prepared ahead of time in terms of the personal and financial documents we need from you during your mortgage interview.
We aim to provide our clients with clear, honest and professional advice, which is why we created a thorough list of the questions our experienced mortgage advisors Edinburgh will most likely ask you.
Firstly, you may be wondering why exactly a mortgage interview takes place. This is so our mortgage advisors Edinburgh have a better understanding of your lifestyle choices and financial situation so we can decide what deals are most suitable for you.
Essentially, we will ask how much you want to borrow along with the following questions to establish how much you are able to repay each month.
1. What Is Your Job Title?
Asking what type of job you have and your position helps our mortgage advisors Edinburgh understand the security of your income.
For example, a first time buyer working a stable industry job with a clear progression route and increased salary is seen as low risk and more likely to be offered a mortgage.
Whereas a first time buyer who only works freelance jobs will be seen as having an unstable income and high risk when trying to obtain a mortgage as meeting monthly repayments would be more difficult.
2. How Much Do You Earn?
Annual income is a highly important factor for all mortgage lenders unless you’re trying to get an equity release mortgage. It gives an estimate of what they can realistically lend and be paid back.
Self-employed individuals or those working part-time pose a bigger risk than those borrowing with a stable, full-time salary.
It’s important to be honest with our mortgage advisors Edinburgh when breaking down your earnings and how exactly you earn them, so we can find the perfect deals for you and lenders can give an accurate estimate.
To verify your job title and how much you earn to our mortgage advisors Edinburgh, you should bring three months’ payslips and your last P60 form to your mortgage interview.
Lenders usually base their affordability decisions on a two-year work history, so be sure to have all the necessary documents with you.
Furthermore, if you are self-employed, you will need to show at least two-years worth of accounts. Note that unfortunately, your choice of mortgage deals will be limited.
3. What Are Your Monthly Outgoings?
What your income is spent on as well as how much you spend per month is a key indicator of your ability to meet your monthly payments.
This includes expenses such as essential costs (groceries, toiletries, bills, utilities), personal wellbeing and grooming costs (haircuts, gym memberships), leisure activities (eating out, online subscriptions, holidays) and travel (petrol, public transport).
You should bring in bank statements for the last three months and be prepared to speak about your spending habits.
A lender is unlikely to not offer you a mortgage based on buying £100 worth of groceries, it’s more so about bigger spending habits that will affect your chances of receiving a mortgage.
That is because lenders will question your expenditure and wonder if it’s going to be a recurring habit and, if so, if a mortgage is going to be affordable under those circumstances.
4. Do You Have Any Existing Debts?
Be prepared to speak about any existing debts during your interview with our mortgage advisors Edinburgh.
Being in debt is completely acceptable and won’t lower your chances of receiving a mortgage. In fact, it’s better to showcase to lenders that you can borrow money and repay successfully, than having never borrowed.
It is only when your debt becomes problematic that your chance of getting a mortgage is decreased.
Once a borrower hits a high percentage usage of available credit such as reaching a maximum overdraft or credit card limit, the mortgage is more likely to be deemed unaffordable.
Essentially, lenders need to know that you are reliable when it comes to managing loans and handling your finances in general.
5. Do You Have Any Children?
The reason our mortgage advisors Edinburgh ask this is not to be nosy but because children are expensive. We want to grasp your financial situation and outgoings as accurately as possible.
Lenders need to know if your dependents will affect your monthly repayments in any way as they are a life-long commitment.
Therefore, be prepared to discuss your children or any other dependents such as siblings or elderly parents who require financial support.
Additionally, be ready to demonstrate how this will not have an impact on your payments and that you have already budgeted for these costs.
6. Where Is Your Source Deposit From?
Where you got your deposit from and how much money you deposit is crucial when seeking a mortgage.
Where the money for your deposit comes from is important as some lenders will favour deposits that you personally saved up for from scratch over a deposit that you were gifted or inherited. A small handful will even only accept a saved deposit.
In terms of the size of your deposit, the higher your deposit, the cheaper overall your home purchase is likely to be. This is because the higher the deposit, the lower risk a lender is exposed to.
Not only does a higher deposit secure a lower interest rate, but it shows lenders that you are more responsible with money, thus affecting your lender’s affordability assessment positively.
It’s important to bring along bank statements that showcase this information when meeting our expert mortgage advisors Edinburgh.
7. What Is the Value of the Property You Are Planning on Purchasing?
The value of the property such as where it is located, the size, etc. is important when determining how much you need to borrow.
The interest rate a lender offers you is based on the loan-to-value ratio (the difference between the value of the property and the size of the loan you need to borrow).
Additionally, lenders will also want to know the purpose of the property purchase (i.e. if you will be living in the property or letting it out).
Meeting with our mortgage advisors Edinburgh gives you an opportunity to really think about how much you can afford, how you will afford it and if this will affect other areas of your life.
Study your expenditure and the property itself so you can give confident, evidence-based answers to our dedicated mortgage advisors Edinburgh.
8. Have You Used Any Payday Loans?
Payday loans are not as free from harm as many assume. An individual willing to borrow emergency funds at extortionate rates shows lenders that they’re incapable of handling their finances responsibly.
It’s important to note that even lenders who accept adverse credit will flat decline anyone who’s taken out a payday loan.
As with all mortgages, each lender has their own individual criteria when assessing mortgage applications. Some lenders may decline your mortgage application because of a recent payday loan, whereas others may decline you for taking out a payday loan once six years ago.
Nonetheless, it’s not entirely impossible for you to get a mortgage if you’ve taken out payday loans. It does, however, make it incredibly more difficult.
Moreover, you won’t be granted the same level of flexibility as other borrowers who have never used payday loans.
If you have taken out a payday loan in the past, speak to one of our experienced mortgage advisors Edinburgh for advice and the perfect deals available to you.
9. Have You Ever Had Any Adverse Credit?
Your credit history affects how much money you can borrow as well as if lenders are willing to accept your mortgage application as a whole.
Your lender will thoroughly investigate your credit file to understand your history of borrowing and repaying debts. Missing bills by just a few days can have an influence on your credit score.
There are many ways your credit score can be improved in the months before your mortgage interview with a lender. Meet with one of our mortgage advisors Edinburgh for advice on how to do so.
Bear in mind that every lender is different and has their own criteria when assessing your mortgage application. Although you may have a low credit score with one lender, another may consider yours high and a safe prospect.
Furthermore, one lender may decline your mortgage application based on a credit payment you missed 5 years ago, whereas another lender will be more flexible and will consider those with extreme credit history issues such as bankruptcy.
This means it is worth it to shop around. However, plenty of mortgage application rejections will harm your credit score so speak to one of our expert mortgage advisors Edinburgh before making any applications.
Interested in Our Team of Dedicated Mortgage Advisors Edinburgh?
When you come to us at Bespoke Home Finance, communication and professionalism are our top priorities.
We are passionate about achieving the perfect and building better relationships with our clients. Our client base covers across the UK and we are very proud of the work we carry out for them.
Contact us today on 0330 111 2477 or fill in a contact form. We look forward to hearing from you, there is no obligation or no high-pressure tactics on ours.
Based in Scotland, our experienced mortgage advisors Edinburgh offer our thorough services to you and want you to have the perfect experience with us.
