Contributed by MJB Avanti
15/10/2020 - MJB Avanti
MJB Avanti inform us that the housing market is currently seeing a boom, despite the uncertainty surrounding the economy in the face of a second wave of Covid-19. Statistics provided by the Nationwide House Price Index show us that house prices in September saw a 5% rise on the prior year. While this sounds like good news, it is leading to inequality in the market with lenders being cagey about applications.
Doors Are Not Opening For All Applicants
In some cases, applicants employed by particular companies are being automatically denied due to their employer being exposed as showing reduced profits and following other negative trends such as increased redundancies.
The days of the 90 – 95% mortgage seem to be a long and distant memory, with deposits of 15 – 20% now being the norm.
So while the stamp duty threshold increase buoyed the market, home ownership remains particularly challenging for those on low incomes and again puts the housing ladder further out of reach for first time buyers. Figures from the MoneyFacts Group show that properties valued £500,000 and above make up a larger percentage of sales compared to the same quarter in 2019.
Consequently, mortgages are taking longer to process, lenders are scrutinising applications and you are required to provide much more information than previously expected.
How Can We Help You?
If you are self-employed, one thing you will be asked for when applying for a mortgage is your SA302 tax summary.
It is a common mistake to ask for the wrong year as applicants fail to allow for the fact that an SA302 is only valid for 18 months – for example, if you applied today – your 17/18 tax year summary would already be out of date.
If you want a mortgage you will therefore need to ensure you get your personal tax for the 2019/20 tax year submitted to HMRC.
Sole Traders, Partners and Directors are generally required to provide 2 years SA302’s. Employees are required to provide 3 months’ payslips, unless you’re in a new job.
In addition to the SA302’s, you also need to include a Tax Year Overview this confirms any tax outstanding. If you do have tax outstanding your application will get rejected until paid. Once you have paid any outstanding taxes, you will need to get a refreshed Tax Year Overview to confirm this before your application will be re-considered.
In a time when applications are being scrutinised, you need to ensure your finances are transparent and in good order – there are two people who can help you to maximise your chances of your application being accepted;
MJB Avanti are here for your tax return needs, if you have an outstanding tax return to file so you can provide the required SA302’s please get in touch – only today we fast tracked a client so he can get his figures to the broker on time. Modern accountants with traditional values.
Trust Financial Solutions are here to help guide you through the mortgage maze and pass the “additional layer” of COVID-19 questions with ease so that you can buy the home of your dreams. “If anyone can, Anthea can.”
For more information, please visit the MJB Avanti website.
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