Ready for your mortgage interview?

April 1, 2022

Questions your mortgage lender will ask you

WHEN YOU APPLY for a mortgage you will always face some form of mortgage interview. The mortgage interview is for lenders to assess whether you qualify for a loan and then decide the maximum they are prepared to lend you.

This will also help you get a better understanding of how much mortgage you can afford. You must not only prove you can afford the mortgage on offer, but that you could cope with significantly higher repayments. 

For example, even if you are taking out a fixed rate loan at 2%, you will be stress tested at a higher rate above the lender’s standard variable rate, which is the rate you will be charged after the initial loan period expires, to ensure you can meet the mortgage payments. 

Lenders are under pressure to ensure that you don’t borrow more than you can afford. Typically, a mortgage interview happens before you submit your application. This is so that the lender can identify how much money you’ll have left over after your regular expenditure – this is what you have available to spend on mortgage repayments.

WHAT SHOULD YOU BE PREPARED TO ANSWER IN YOUR MORTGAGE INTERVIEW? Lenders are assessing if you can afford the mortgage repayments, so they’ll ask you about your income (the money you have coming in) and expenses (the money you’re likely to spend). These are a selection of questions you are likely to be asked.

  • How much do you earn per year? 
  • What do you spend your money on? 
  • What’s your credit history? 
  • How much existing debt do you have? 
  • Have you ever taken out a payday loan? 
  • Do you have children, or are you planning on having any more? 
  • Do you have any plans to leave your job, start a business or become self-employed? 
  • Do you expect your income to fall over the next few years? 
  • Do you ever gamble? 
  • What’s the value of the property you want to purchase?

You will be asked about outstanding and ongoing payments, including: 

  • children (for example, school fees, child maintenance, childcare) 
  • credit card and loan balances 
  • essential costs (like for groceries and toiletries) 
  • personal wellbeing and grooming costs (for example, gym memberships and haircuts) 
  • clothing and footwear 
  • costs for leisure activities (for example, eating out, socialising, TV licences, holidays) 
  • television and internet subscriptions 
  • mobile phone 
  • council tax 
  • utilities 
  • essential and non-essential travel (like petrol, public transportation costs, parking, hotels) 
  • ground rent or service charges 
  • insurance policy payments 
  • pension contributions 
  • insurance premiums 
  • alcohol and cigarettes 
  • cleaning products 
  • dry cleaning 
  • pets 
  • dental care

The questions will usually also cover future plans that you may have that involve spending money. These can include: 

  • having children 
  • car loans 
  • property renovation or redecorating 
  • repairs

MAKING YOUR FIRST TIME EASIER 

Buying your first home can be one of the most exciting times of your life. We have experience helping first-time buyers get on the property ladder, so you can rest assured you’re in safe hands with us. To discuss your requirements, contact The Official Mortgage Company – telephone 01777 809700 – email: admin@officialmortgages.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage.

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