For many of those who are planning to purchase a property or build a house, securing a mortgage is the preferred choice. At times, people who have already entered into mortgage agreements will want to re-negotiate the same to benefit from lower interest rates or else to obtain more funds. In any event, knowing your chances of obtaining a mortgage and the probable interest rate that will be applicable to you would be advantageous even before deciding on the house or the property that you intend to purchase. However, unless you submit the correct documents, you may have to experience delays or rejections from the financial institute, which you intend to apply for the mortgage.
Proof of identity
For any financial institution, proof of identity is an essential requirement necessitated by law. In this regard, you should provide your financial institution with a valid passport or a driver’s license. However, there may be other documents that you can provide to such institutions although identification documents issued by private companies or professional associations may not be acceptable to most financial institutions for the purpose of obtaining a mortgage.
Proof of billing address
Secondly, you should prove that you live at a particular address by using documents such as household bills issued under your name for that particular address. Financial institutions will want to verify your address as formal future communications between the financial institution and you will most likely take place via postal mail. Once you confirm your address, it is your responsibility to inform the financial institution regarding any changes of your place of residence. This will be important as the company will not be liable for communications that do not reach you on time due to changes in the initially given permanent address.
Proof of monthly income
Next, you need to prove your monthly income through official documentation issued by your employer. In most instances, you will have to provide the financial institution with salary slips pertaining to the last three months. In some instances, you may have to provide a letter from your employer confirming your status as an employee as well as your salary. In addition, certain organizations may request your last tax assessment notice for further clarification and strengthen the validity of your information. In case you are a self-employed person, it is necessary for you to provide the last two years personal income tax return, last two years co tax returns as well as last tax assessment notice.
Declaration of your financial activities
In certain situations, you may have to provide statements of your current, savings and loan accounts for the past 12 months in order to ascertain that you have the capacity to meet up with the mortgage demands. However, most financial institutions may not request such information given its sensitive nature while emphasizing that providing such details voluntarily will increase your chances of obtaining the mortgage and a better rate depending on your ability to meet the mortgage demands.
Declaring existing debt
Lastly, you may also have to disclose the loans and the credit cards that you have obtained and the amounts that you have to set-aside as a result of these commitments.
In addition, your financial institutions may request additional details based on their policies, government regulations or unclear borrower financial information.