When you have completed all the credit checks with a lender, and the property has been valued by a chartered surveyor, the mortgage offer is then issued and passed to the solicitor to do the legal checks.

At this stage you will often hear the solicitor say  ”We are waiting for the searches to come back”.  But what are these searches?

We asked a solicitor and were given the following information:

• Land registy search – This supplies the title deed and plans for the property. You can apply for a copy yourself for £8 at www.landregistry.gov.uk
• Local authority searches – These show any planning permission connected with the property.
• Drainage searches – Does the property have sewage and water provided by a utility company?
• Environmental search – Is the property near any contaminated land?
• Chancel search – This is concerned if your property is in an area that has a liability to maintain the local church.

Solicitors tend to use agencies to obtain these searches for them. This is much quicker than having contacts with all the various search providers.

Typically searches take 7-10 working days to come back from the agency to the solicitor.

Mortgage lenders require the freehold property to be insured and proof of this is required to be provided to the solicitor or the lender. Certain lenders ask for their interests to be noted on the policy which is very easy for insurance companies to do.

For leasehold property the leaseholder is not responsible for the building insurance as it is the freeholders responsibility. The freeholder will take out a block policy covers all the leasehold properties that exist under the freehold.

What is common is for the block policy to state that the noted interest on the policy are all mortgage lenders and leaseholders. If this general interest is noted on the policy then the lenders will usually accept this and not expect their individual names to be noted.

Providing proof of income is a vital part when applying for finance or a mortgage. For employed people this is relatively straight forward as it can be provided by wage slips or a P60.

Self employed applicants tend to have more complicated tax affairs and can receive income from several sources including salary, dividends and rental income.

The best solution if you are self employed on how to  provide proof of income is as follows:

1) Don’t delay in submitting you self assessment tax returns. You have until January the following year to file your tax return but if you wait until this period, then the information can be out of date.

2) Obtain a summary print out of the self assessment tax return from the HMRC web site. Click on this link to see the Example_Proof of Income for self employed. This summary of your tax return can be downloaded very easily and quickly by you or your accountant. It is a very good way of showing a lender your income and its souces. In addition, if you are a property investor it will confirm important information such as the rents received, interest incurred and the 10% wear and tear charges.

3) IMPORTANT Alot of lenders are impleneting checks to ensure that these summary tax returns are authentic and not fraudulent. In addition to supplying the summary tax return as shown in the example in point 2, you will need to provide proof that the information has come from HMRC. This can be done by way of:

• Provide your tax statement (form SA300) which the HMRC will post to you to confirm the tax position. The lender can then reconcile the tax position with the self assessment summary provided.
• Provide your tax calculation (form SA302) which can be requested by contacting HMRC. This summarises on one page your income and tax payable. For property investors it doesn’t provide the level of detail that the full summary provides and the self assessment summary is therefore still required.
• If your accountant is chartered or certified ask them to stamp and certify the tax return summary to provide proof it has been obtained directly from the HMRC web site. 

Advocate Finance Ltd are required to confirm who we are dealing with under the 2007  prevention of money laundering act.

To satisfy this requirement Advocate Finance Ltd are required to obtain proof of ID and proof of address. Acceptable proofs include:

1) Proof of identification (ID)

• Valid UK/EU passport
• Valid UK/EU driving licence (paper or photocard)
• Non UK/EU passport with supporting proof of permission to reside/work in UK
• HM Forces / Police officers card

Please note all ID must be valid and NOT expired or out of date

2) Proof of address – This must show the current address on the application form and must be dated within 3 months

• Council tax bill
• Bank or credit card statement
• Utility bill
• Landline telephone bill
• Mortgage statement

Please note internet printouts are NOT acceptable only the original documents

You will need to send the orginal documents or send a photocopy that is certified

Please send one document from the above lists to prove your ID and address recorded delivery to Advocate Finance Ltd, 127 Straight Road Colchester CO3 9DE. We will then photocopy the orginal documents and certify we have seen the originals and return the documents to you recorded delivery.

Instead of sending in the original documents you can send in a photocopy as long as this photocopy is certified by a person of suitable standing.

To do this you need to photocopy the proof of ID and proof of address and take the original documents together with the photocopy to a person to certify the photocopy, such as

• Bank / Building Society employee
• Solicitor
• Accountant
• Independent Financial Advisor
• Any other professional authorised by the Financial Services Authority (FSA)

This person should check the photocopy against the original and if they approve of the photocopy they will write on the photocopy

“This is a certified copy of the orginal”

They will then need to write their name, provide a signature, date it and provide their professional registration number or company stamp on the photocopy.

This certified photocopy can then be sent in liue of the original document.