How to get ‘mortgage fit’……
We get a lot of Superyacht Crew contacting us about mortgages because, as most of you are aware this is a great long term investment opportunity. However, this is something that cannot be rushed and needs to be viewed as a process rather than something you can just organise in a few days.
As yacht crew you lead a slightly different life to most people and this can result in certain aspects of applying for a mortgage being a little bit more difficult than you expected. Therefore, we have put together this guide in conjunction with our mortgage partners to help you understand some of the things that make applying for (and being granted) a mortgage a little easier.
As always one of the key elements here is TAX. If you are not declaring your income and filing tax returns the mortgage application process becomes a lot more complicated. Read on for more.
A few tips that could make getting a mortgage easier:
- Check Credit Report – Register for a 30 day free trial with Experian (experian.co.uk) or Equifax (www.equifax.co.uk). Alternatively, register ‘free for life’ with Noddle (www.noddle.co.uk) and receive a copy of the report every month without it costing a penny
- Correct any errors on the report – If there is anything wrong then contact the company involved and ask them to correct the error. If they refuse then complain or take matters to the ombudsman but it’s better to get the matter resolved than ignore it…..it may be 6 years before it goes away!
- Electoral Register – Make sure you are on the Electoral Role at your current residential address as this will improve the chances of getting a mortgage
- Manage credit carefully – Try to keep well below the limit on credit cards, store cards or overdrafts. Close any old bank or credit card accounts no longer being used. Some mortgage lenders penalise applications if they think clients still have access to unused credit limits or finance facilities
- Keep payments up to date – Just one missed or late payment on finance or credit cards can be enough for some lenders to refuse a mortgage. Always set up a direct debit to pay the minimum payment, the full balance can always be paid later
- Remove ‘Links’ or ‘Associations’ to any ex-partners – This is especially important if they’ve had credit problems in the past as the ‘Link’ or ‘Association’ to them could affect the application
- Don’t take out any payday loans prior to applying for a mortgage – Some mortgage lenders will not provide a mortgage if they see that a payday loan has been used in the last 12 months, even if it is settled
Part 2 (Documents)
In addition to checking your credit report, you need to make sure your supporting documents are in order:
- Proof of ID – Check passport and driving licence are in date and show the correct name & address. If married recently the lender may want to see the marriage certificate too
- Proof of Address – Keep some recent utility bills (dated in the last 3 months) to evidence address. Other items such as Council Tax Bills and House Insurance Certificates can sometimes be accepted
- Bank Statements – Mortgage lenders will want to see the last 3 months bank statements to evidence both income and regular outgoings. Online statements are fine in most instances as long as they are printed from the bank website and show name and address
- Proof of Income
- Employed applicants – Keep latest 3 months payslips and most recent P60. Lenders may also need to see additional payslips to evidence any annual bonus, commission or overtime received
- Self-employed applicants (this applies to most yacht crew)– Clients may be asked to provide anything between 1 and 3 years’ accounts, depending on the time self employed. Some lenders may also request HMRC Tax Year Overviews and SA302’s. These official documents can take 10-14 days to arrive in the post from HMRC, so we suggest registering on-line with HMRC before applying for a mortgage, the documents can then be downloaded in around 30 seconds!
- It is essential, as Yacht Crew to have completed this process prior to a mortgage application. DO NOT put an offer in on a property if you have not completed your tax return and received an SA302. It is very likely that if you are not filing tax returns and do not have proof of income in the form of an SA302 you will not pass approval. We have seen a number of crew rush into house purchases this year only to have their mortgage application rejected for this very reason.
- Other income – For income from investments or pensions the lender might ask for annual statements to evidence the amount involved. Likewise, if there is any benefit income the entitlement letter is likely to be needed to confirm the amounts payable
- Proof of Deposit – Statements will be required to show the deposit has been saved over a period of time. Alternatively, if the deposit is being gifted by a parent or close family member then the lender may require a certificate or letter from them to confirm the monies are being gifted without any reservations or claim to the property
If you would like to talk to us about property, mortgages and the steps you need to follow to go about this please get in touch as we are always happy to talk.