Home Loans
Administration For Property Investors - Getting that Mortgage Offer Quickly
(presented by www.refinance-refinance.net - mortgage lenders)
By Mark P Harrison
One of the things that the investor can offer the house-seller is speed of purchase, and in some circumstances seller may be more intersted in this than in the highest price for the house.
In order to deliver on this promise, you need the right team in place, and the right paperwork in place - the joy of administration.
When prices are booming, lenders are desperate to lend money, and willing to sometimes turn a blind eye to the odd lapse in paperwork. Once prices look like stabilising, or there is a rumour of a price decline, then lenders typically over-react by asking for more and more backup information to support your loan application.
For the experienced investor this is seldom, if ever, a problem, since after a few properties, we end up setting up more formal filing systems. For the new investor, however, it can come as a sudden shock to be asked to produce odd bits of paperwork that, in the past, might have been thrown (or shredded.)
If you are intending to apply for finance, you should ensure that you have the following to hand before you go to see your mortgage broker:
- Two years worth of bank statements (most lenders will only ask for
3-6 months, but sometimes lenders ask for more.) These bank statements
should show an income to match the income you claim to have (!) and
proof that you have made payments on your existing mortgage(s) without
problems. - Mortgage statements on your own house for the last two years. Again
some lenders may ask for a rather shorter time period, but some ask
for more paperwork, and the requirements for paperwork are only going
up at the moment. - At least 3 months worth of payslips from the same employer, and the
P60 (UK tax form) from your last tax year. In addition, some lenders may wish for a
letter from your employer outlining what income is guaranteed, and
what is subject to performance (either yours, or your employers), and
confirming that you are not under threat of redundancy. /li> - If you are self-employed, then you may need to provide accounts for the last two
years, together with details of your accountant (who then may, or may not
actually be approached to verify that the accounts you are producing
have indeed been seen by them.) - If you already own investment property, mortgage statements for
each investment property for the last two years. - If you currently have tenanted property, tenancy agreements for each property, showing that
your tenants have valid contracts. - Your passport. Anti-money-laundering legislation is one of those
things that imposes a burden on all of us. In the UK, it is not uncommon to be
asked to provide a passport by not only your lawyer, but your
mortgage broker and even your estate agent (if you are using one)
these days.
One final recommendation - if ever you hand over ORIGINAL documents to a lender or mortgage broker, then ask them to sign a receipt that itemises exactly what they have taken, AND take photocopies of all the documents before you let go of the originals.
The reason for stressing this is that I once had a call from a lender who had asked to see two years statements from each property I owned, plus two years from my personal bank accounts, and had refused to accept photocopies. The call was to apologise that the lender had lost them! I explained that having originals was vital to my business, as the lender would agree, that each duplica!
te issue
d by my bank or other lenders would cost typically 20 pounds, and that I would therefore be issuing a small claims court claim against them for 20 pounds times 96 statements - that is to say for just under two thousand pounds. I reminded them that their representative had signed a receipt for all the documents. Mysteriously, within 90 minutes, I had a phone call back saying that the documents had been located.
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Mark Harrison is a property investor, author and speaker. He runs training courses and seminars about property investment and web marketing in the UK. |
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