Buying a house in the UK can be a complicated process, even without any of the key documnts.
There are so many legal, financial, and administrative requirements to navigate. From securing a mortgage to completing conveyancing, all of these steps can take time.
One of the most important parts of this process is gathering all of the key documents for the home purchase.
Key Documents for Your Solicitor When Buying A Home
Proof of Identity:
Providing proof of identity is a crucial step in the property buying process. The solicitor handling the transaction will need to verify the customer’s identity to comply with money laundering regulations. This is a legal requirement and must be completed before any property transaction can take place. The customer will need to provide a valid form of identification.
Any of the following should be good for this:
- Passport
- Driving license
- National ID card
The identification document needs to be current and not expired. The solicitor will take a copy of the document and retain it for their records.
Proof of Address:
The customer must also provide proof of their current address.
Again, this is related to regulations and solicitors will need to do this to move forward. It’s also important for a big reason – you need receive key documents from the solicitor when your house purchase moves forward!
The document should be less than three months old and show your name and address.
Acceptable documents include:
- Utility bill
- Bank statement
- Council tax bill
The document should be an original copy and not a print out.
Be careful about providing a print out of a bank statement. Some solicitors and lenders need to see the version of the document that is sent to you in the mail. Often the mailed versions of documents will have barcodes or markings on the side of the letter.
Mortgage Offer:
If the customer is obtaining a mortgage to purchase the property, they will need to provide a copy of the mortgage offer to the solicitor.
The mortgage offer is a document issued by the lender, outlining the terms of the mortgage, including the loan amount, interest rate, and repayment terms. The solicitor handling the transaction will need to review the mortgage offer to ensure that the terms are acceptable and that the lender has met all the necessary requirements. The solicitor will also need to ensure that the mortgage offer matches the terms agreed between the buyer and the seller.
Proof Of Funds
When purchasing a property in the UK, it is common for solicitors to ask their clients to provide proof of funds. This is because the solicitor has a duty to ensure that their client has the necessary funds to complete the purchase before proceeding with the transaction.
In practice – this means checking you have the deposit.
This may sound like an unnecessary process. You might think to yourself “surely I wouldn’t be going ahead with a purchase if I didn’t have the funds”.
But some customers do make mistakes. And some of them also miscalculate their deposit. It can be easy to miss the fees that need paying before a mortgage can complete. Solicitor fees, valuation fees and lender fees will need paying.
The solicitor can help verify that the buyer has the necessary funds in place, preventing delays or complications during the transaction.
Key Documents for Your Lender When Buying A Home
A lender will require many of the same documents as your solicitor, as they also need to comply with regulations.
So the lender will also require:
- Proof of identity
- Proof of funds
- Proof of address
But the lender also needs some other pieces of information
Payslips
When applying for a mortgage in the UK, lenders typically require applicants to provide their payslips as part of the application process.
This is because the lender needs to verify that the applicant has a steady and reliable source of income that will allow them to repay the mortgage over time.
Payslips also help to establish the borrower’s affordability. By examining the payslips, lenders can determine the borrower’s total gross income and calculate their affordability. Lenders often use the loan to income multiple for working out how much you can afford.
For part of this process the lender will work out the borrower’s monthly mortgage repayments to their monthly income. The lender wants to make sure that you as a customer will be able to pay your mortgage, even in a stressed scenario.