Questions to Expect in Your Mortgage Interview
Written by Adele MacGregor
23rd Mar 2020 (Last updated on 31st Mar 2020) 6 minute read
Before you begin viewing properties, it is recommended that you make enquiries about a mortgage and how much a lender is willing to loan you.
The first step of the mortgage application is a mortgage interview to see if you are eligible for a loan. You will also be able to discuss the types of mortgages available to you and the size of the loan you can take out.
Compare My Move have created this guide to prepare you for a mortgage interview so that you know exactly what to expect on the day. We will also be providing some key steps you can take to put you in the best position possible when it comes to applying for a mortgage.
What is a Mortgage Interview For?
The mortgage interview is so that lenders can ensure that you qualify for a loan and will explore how much mortgage you can afford to take out.
From this meeting, the mortgage lender can get an understanding of your financial situation and suitability for a loan. An ideal candidate for a mortgage is someone who can show they are financially responsible and will be able to repay the loan without issue.
What Questions Will They Ask?
Your chosen mortgage lender will primarily ask about your employment, income and your spending habits.
They will want assurance that your employment and income is stable and secure and that you are financially mature enough to take out a mortgage. If you are looking to get a mortgage on a zero-hour contract, it's likely the lender will want more details about your employment and profession.
Some of the questions and queries during the mortgage interview may include:
Employment and income
- Where do you work and what is your role?
- How much do you make?
- How long have you been employed at your current place of work?
- Do you have a steady salary or an irregular income?
- Whether you are repaying a student loan
- How do you use your credit cards?
- Your pension contributions
- What savings accounts you have open, including if you have a Help to Buy ISA or a Lifetime ISA.
- If you are in any debt or have taken out any payday loans
- What costs you incur on a monthly basis including utilities and leisure activities.
They may also ask questions concerning future plans which would involve a change in the way you spend or financial investments. These include:
- Buying a new or second car
- Having children
- Any plans for property redecoration or renovation
- Any significant or large holidays planned
The mortgage lender will also want to know how much down payment you are planning on paying. This is the deposit paid on the home, on average 10% of the property price, with the rest made up of the mortgage.
They will also know where the money for the deposit is coming from, whether it is from your own savings or if it is a gifted mortgage deposit.
Your chosen mortgage lender will also want to know the purpose of the property purchase. They are likely to ask whether it is for you to live full-time, as a holiday home or if it is a buy to let property.
Will They Run a Credit Check?
The majority of mortgage providers will run a credit check at this stage. This will either be a soft credit check or a hard credit check, depending on your provider.
A soft credit check will not leave a “footprint” on your credit score and will give a general overview of your finances. It will take into account factors such as your spending habits, your income, whether you’re on the electoral register and the number of times you’ve moved house in the last few years.
This will be to ensure the details you have provided are correct, similar to a background check,. The mortgage lender will also be able to give you an idea of what credit score you need to get a mortgage.
A hard credit check will look at your finances in more detail and will leave a “footprint”. If this is a concern, it is worth checking with your chosen mortgage lender which check they will run before proceeding.
What Documents Do I Need?
At this stage, the mortgage lender will want to get an idea of who you are and how you approach your finances. Being prepared will show your chosen mortgage lender that you are serious about applying for a mortgage.
As part of the preparation for your meeting with a mortgage lender, it is worth gathering as many documents about you and your finances as possible. Examples include:
- Proof of income
- Proof of identity
- Proof of address
- Details of any earnings outside of a regular job
- Details of any debts and store cards
- A list of any and all assets, such as other properties.
How Can I Prepare for My Mortgage Interview?
As we’ve covered above, you will need to prove your identity with official documents such as a passport or driving license. In addition, you will need proof of address in the form of a recent utility bill, bank statement or council tax statement.
It is also likely that you will need to provide proof of income and outgoings. This includes three months of payslips and bank statements and your P60 if possible.
If you are self-employed, you will need to provide recent tax returns or signed accounts in addition to your self-assessment tax returns.
Prior to your mortgage interview, it is advisable that you check your credit score via sites such as Experian and see if and how it can be improved:
- Check that all details on your file are correct - something as small as a slightly wrong address could impact your score.
- Ensuring you are on the electoral register will also boost your credit score
- Credit cards have a bad reputation, but they can be essential in showing a lender that you are responsible with money and repay what you owe on time. This will also contribute to a positive credit score, putting you in a good position when it comes to your mortgage interview
- Close any credit cards that are no longer used.
- When it comes to credit, keeping your credit utilisation low is another way of improving your credit score. Your credit utilisation is the percentage you use of your current credit limit. For example, if the limit is £2,000 and you’ve used £1,000, your credit utilisation is 50%.
If the Interview is Successful, Am I Guaranteed a Mortgage?
Before you are given a mortgage offer, you are first given a Mortgage in Principle showing how much you could theoretically borrow. This does not guarantee a mortgage.
Once a successful mortgage interview is complete, you will be provided with a mortgage in principle. From here you can start the formal mortgage application once you have decided to make an offer on a property.
However, having an Agreement in Principle will mean both the estate agent and the seller will consider you a serious buyer. This will put you in a better position when it comes to making an offer on a property.
An AIP will also enable you to house hunt with the confidence that you are in a good position to apply for a mortgage, in addition to giving you an idea of budget.
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