A few years ago, self certified mortgages were abundant, almost every lender was happy to lend you money without the need to check your income. Some lenders used a system called ‘Fast Track’ this is where the lender didn’t check your income but could request proof at a later date.
Self Certified mortgages and Fast Track are now a distant memory, each mortgage must be backed up with proof of your income, in fact the government are pushing lenders in to ensuring that they check affordability on each and every mortgage.
This isn’t a bad thing, why would you apply for a mortgage that you couldn’t afford.
Anyway, back to the reason of this article, proving your income when applying for a mortgage today. What do you need to provide;
If you are employed with just the one job, then your last 3 pay slips is usually acceptable to the lender, some would like to see bank statements showing your salary credited to your account.
If you are self employed, no longer are most lenders willing to accept your last 2 or 3 years accounts, even those audited by yor accountant, be expected tp obtain your last 3 years SA302 from the Inland Revenue. An SA302 is a document that the Inland Revenue generates to confirm the figures you have declared on your Tax Return.
If you are an employed director of a limited company with a significant shareholding, usually more than 20%, the lenders will certainly classify you as Self Employed and will want to see confirmation of your basic salary, dividends, company accounts and some are now requesting that you provide your own SA302′s as well.
So if your thinking of applying for a mortgage, be prepared to provide extensive proof of your income and if your self employed or a company director why not call the Inland Revenue and request 3 years SA302 early.
Previous Article | Next Article