When you’re applying for a mortgage, any delay can hold up the entire chain of buyers and sellers, or even stop the sale going ahead. But you might be surprised at how seemingly minor details can derail the process.
Something as simple as the wrong address on your drivers’ licence could prompt the lender to return your application and request more information – while more serious lapses may lead to a rejection.
Which? has rounded up the most common stumbling blocks to having your mortgage application accepted quickly and hassle-free.
1. Wrong address on drivers’ licence
Updating the address on your drivers’ licence may not be top of mind when you’re moving house – but failing to do so can lead to complications.
When you apply for a mortgage, you can use your passport to prove your identity, but you’ll also need to show original proof of address.
The easiest way to do this is showing your drivers’ licence – but if the details don’t match your current address, you may need to provide much more documentation.
2. Not changing address on the voter’s roll
Lenders will want to track where you’ve been living over recent years.
As part of this, the lender will check the electoral roll to see if it matches the information you provided.
Updating your electoral roll details can also help you build your credit score, so should be a priority whenever you move.
Find out more in our guide to applying for a mortgage.
3. Mistakes on statements
Typos happen to everyone – but on a mortgage application, all your details need to match up.
If your bank statement, pay slips, proof of address or other documents contain a mistake – for example, they’re addressed to ‘Steven’ instead of ‘Stephen’ – the lender is unlikely to accept them as evidence.
Check all your documents carefully and have anything that isn’t right corrected, no matter how minor.
4. Changing your name after marriage
It’s common enough to change your name after marriage, but make sure you have evidence of the switch, or the lender may not be able to verify your identity.
When changing your name on financial accounts, be thorough – if there’s an out-of-date credit card out there with your previous name, it may throw up red flags.
5. Keeping unused credit cards open
If you no longer need one of your credit cards, and aren’t being charged a fee, it might be tempting to just leave it open in case you ever need it.
But lenders will consider your overall credit limit when deciding whether to approve your application, not just the credit your regularly use.
For this reason, it can be a good idea to shut down any unneeded credit cards before you apply.
Find out more in our guide to credit cards explained.
6. Forgetting to disclose credit
The lender will ask you to disclose any credit you have taken out, including loans and credit cards.
But there are other less obvious forms of credit that you may forget to mention. Some of the more common ones include:
- Shopping from a catalogue ‘on account’.
- Buying a smartphone on contract.
- Taking out a department store credit card.
- Shopping with ‘buy now, pay later’ services.
These are likely to show up when the lender runs a credit check on you. If you haven’t disclosed these, that could count as a black mark against your application.
7. Submitting your tax return at the last minute
If you’re self-employed, you’ll need to show lenders proof of your income for the current year (to the last October).
This means, for example, that in October 2018, you’d need to show your SA302 tax calculation for 2017-2018 – but you can only get this once you’ve submitted your tax return for 2017-2018.
While you technically have until January 2019 to submit, you won’t have the evidence you need to get your mortgage approved. You can find out more in our guide to getting a mortgage when you’re self-employed.
Submit now: you can send your tax return directly to HRMC with the Which? Tax Calculator 2017-18.
8. Proof of building up deposit
Showing that you have enough funds in your account for a deposit is normally not enough – you also need to show proof of how you’ve built it up.
Normally, the lender will want to see at least three months’ worth of bank statements – or, in many cases, longer – as evidence of your savings habits.
The lender may ask you to explain unusual transactions, so you should be prepared with evidence of anything likely to raise questions.
If you’re being given the deposit as a gift, you’ll need to provide a letter from the donor.
9. Out-of-date benefit award letter
If you receive benefits as part of your income, you’ll need to submit your benefits award letter.
The lender will want to see the latest version, meaning a letter issued within the past year.
But you also need to make sure this letter is up-to-date, reflecting your current income and the accurate amount of benefits that you receive.
10. Bringing scanned document instead of original
Some of your documents – including proof of address – will need to be originals.
If you provide a scanned copy, or one printed off from online, the lender may ask you to provide an original instead, delaying the process.
11. Errors in credit report
Your credit score will make or break your application, so it’s important it reflects the reality of your situation.
Occasionally, errors can creep in – for example, if a previous tenant at a property failed to pay a bill.
Before you apply, order a copy of your credit report and check whether it’s accurate.
Find out more in our guide to credit reports.
12. Late or missed payments on your record
Paying a bill a few days after the due date may not seem like a big deal, but lenders may be wary if they see late payments on your credit history.
How seriously the lender will take it may depend on the number of late payments and how much you owed.
In some cases, lenders may just ask for an explanation. But if it’s a serious lapse – for example, you’re consistently late, or you’ve ever missed a mortgage payment – they may reject your application out right.
13. Taking out payday loans – even in the past
In a financial rough patch, you might turn to a payday loan, but doing so can have repercussions for years to come.
Many lenders are unwilling to lend to someone with a payday loan on their record, even if it was fully paid off on time and from several years ago.
If you’re worried about your credit history, you may be better off speaking to a specialist lender that caters to people with lower credit scores.
Worried? Speak to an expert
Whatever your circumstances, one way to ensure your mortgage application goes smoothly is to speak to an expert mortgage broker. They can help you find the right deal and advise you how to strengthen your application.