Getting Ready For Your Mortgage
There’s no doubt, with interest rates rising, mortgages are becoming more expensive and difficult (our opinion only) to secure to get the best mortgage deal on your next remortgage or purchase, so what can you do to prepare?
Get your tax computations and Tax Year Overviews (TYO) ready for the appropriate years, or the SA302s if filing tax returns direct to HMRC. Most lenders will accept your tax computations and TYOs under an agreement between the Council of Mortgage Lenders and HMRC. If you are employed, get your relevant payslips ready.
Get your tax return done early. After September, mortgage lenders will often want the tax return for the tax year just past so whilst you may be relying on the previous years tax return, the mortgage application may be lengthy so be prepared to get your most recent tax return done and filed with HMRC asap do it’s ready to provide to your mortgage broker when needed. Don’t expect your accountant to prepare the documents overnight if you haven’t sent your information in with a good lead time. There may be someone else also buying their dream home who is ahead of you in the order of workload.
Consider paying off any personal debts that could hinder your borrowing opportunity. Your debts will be considered for lending and could effect how much you can borrow.
Plan ahead - if you have a company, look at your salary and dividend income and be mindful of the mortgage company response if your income has dropped so at least try to keep your income level consistent or increased if you need to maintain or increase your borrowing level.
If you are self-employed, be mindful of overspending on goods and services if you need to keep your income higher to borrow more.
Check in with your mortgage broker in good time before your renewal comes up, at least 3-6 months so you can plan ahead.
Keep your credit score in check and review every so often as you come up to renewal or needing a new mortgage.make sure you have good money habits in place to keep your credit score good
Remember if you fall in love with your dream property, time is of essence so get ahead and always stay on top of your tax affairs so you are in a good position for your offer.
FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.
