Once an individual has taken financial advice and determined that a second charge mortgage is the right option for their circumstances, understanding the documentation that will typically be required can help to ensure a smooth and efficient application process. We sat down with our dedicated second-charge team to get their insights into the process and to find out the most commonly-requested items.
1. Proof of Identity
Lenders need to confirm an applicant’s identity to comply with anti-money laundering regulations. Official documents such as a valid passport or driving license will help verify that an individual is who they claim to be and that they are legally eligible to apply for a loan.
2. Proof of Address
To establish an applicant’s residency, lenders will request proof of their current address. Acceptable documents include:
- Recent utility bills (within the last three months)
- Council tax statements
- Bank or credit card statements with the address clearly visible
It’s important that the address on these documents matches the address listed in the application and that it is dated within the last 3 months (or annually).
3. Proof of Income
One of the key factors lenders consider is the applicant’s ability to repay the loan. To assess this, they need to see evidence of income. This can include:
- For employed applicants: recent payslips (usually the last three months)
- For self-employed applicants: tax returns, tax calculations (with the corresponding tax year overviews), or certified accounts. These can be needed for the latest one to two years
- Some lenders may also request bank statements to confirm that the income is deposited regularly
4. Property Documents
Because a second charge mortgage is secured against a property, lenders may require specific property-related documentation including:
- The property’s title deeds or land registry documents
- A property valuation or home appraisal report
5. Credit History and Financial Commitments
An applicant’s credit history gives lenders an understanding of their financial habits and reliability. They may ask for:
- A recent credit report (though lenders often run their own checks)
- Details of other outstanding loans or credit card balances
- In some scenarios, loan statements and/or credit card statements may be requested (e.g. when consolidating debt)
6. Consent from the First Mortgage Lender
A second charge mortgage is secured against a property that already holds a first charge mortgage, so the first charge mortgage lender must also consent to the arrangement. This is known as a Deed of Postponement and confirms the order of priority between the two loans.
To summarise, every application is unique and exact requirements depend upon both the individual’s financial situation and the lender’s policies. Not all the documents mentioned will be necessary every time and it’s also perfectly normal for additional documents to be requested throughout the application. However, the process can be streamlined by gathering documentation in advance, double-checking all information provided to the mortgage broker or lender, and providing any additional documents promptly when requested. If in doubt about what’s required, always ask!
