Over the past couple of years, we have noticed an interesting phenomenon. For some reason, an unusually high proportion of our clients apply for a mortgage in January.
Now, there could be a variety of reasons for this. I suppose at the beginning of each year we do like to review our finances as a whole, and plan for the year ahead – maybe this involves remortgaging to free up some cash, or just simply to switch to a better mortgage deal. Of course, maybe it is just a coincidence. Whatever the reason, if you are thinking of remortgaging in the next few months, we would highly recommend that you keep your accountant up to date with your plans.
Why? Because if you are either self-employed or own a limited company – there are increasing complexities which mean that applying for a mortgage is never as straightforward as it first appears.
Now, please don’t hear what I didn’t say, there is no problem in applying for a mortgage in January – just be prepared for a couple of inevitable complications:
- I have previously written about the pitfalls to avoid when applying for a mortgage. In the blog, I mentioned that if your accounts are more than 6 months old, you may well be required to produce a forecast for the next year. The likelihood is, if you are remortgaging or applying for a mortgage in January, you will be required to provide such a forecast.
- It’s just after Christmas! Now, this may seem like a pretty superficial reason, however it should probably be given some thought – January is a notoriously busy time for all involved. Banks and lenders always provide strict timescales, and the last thing you want is to make what is already a fairly stressful process any more pressured than it already is.
Now, obviously none of this is insurmountable, but both of the above points could be headed off a lot earlier if you keep your accountant up to date with your plans. Your accountant can advise you on the likely process that the lender will need to go through (i.e. will they request an accountant’s certificate, or require a full-blown forecast?). On the other hand, if your accountant knows that you are applying for a mortgage, they will be able to factor this into their work, to ensure that the requested information is provided as quickly as possible – to make the whole process as straightforward as it can be!
So, if there is one thing that you take from this blog, we implore you to take this: Talk to people like a mortgage broker and your accountant early. It doesn’t matter if you are still only planning, or if it is potentially months ahead. There are things that we can do in the months leading up that will help speed up and straighten out the process for you, and prevent the possible headaches in the process. Get in touch on 01872 300232 or email us at firstname.lastname@example.org.