What is a Mortgage capacity report?
A Mortgage Capacity Report is in essence a letter which confirms how much you can obtain by way of a mortgage based on your circumstances or circumstances as they will be following divorce etc.
A Mortgage capacity report is usually required for courts prior to a divorce hearing. It is something we can provide for you. The Capacity report usually needs certain information included such as maximum lending amount based on repayment and interest only, the monthly repayments and so on. We have been providing these reports for around 3-4 years now and generally have them off to an art now based on feedback over the years from solicitors.
Why do I need a capacity report?
It is not the same as getting an affordability calculator or even a Decision in Principle from a lender, although the affordability calculator does form part of the report.
We do multiple affordability checks, but we also do criteria checks to ensure on the face of it you would likely be accepted. Where we have to provide the monthly repayments, we do them based on your circumstances. For example, if you have recent defaults, the rate and repayments will likely be higher.
Whilst there is an element of the report being an affordability calculator, as you can see from the image below, the maximum lending for the same set of circumstances can vary significantly. In the example below, that is over £100,000 difference!
The vast difference can be for a number of reasons, but typically it is down to income outside of basic wage (benefits or bonuses for example) or committed expenditure such as loans and credit cards.
What do we provide?
The letter will be written for you and your circumstances. It will include everything required in order to pass the courts requirements which includes:
- Maximum lending for Interest Only
- The monthly repayments for interest only
- Maximum lending for repayment
- The monthly repayments for a repayment mortgage
- An approximate deposit amount
We will also provide a brief overview of your circumstances. This ensures the other side know the letter is based on legitimate information. In 3-4 years we have never had a single letter disputed by the other side or courts.
Our Mortgage Capacity report is typically provided in draft format within 3 working days of receiving the paperwork. The final version can be produced within a couple of hours of confirmation the draft report is acceptable.
The cost of the report is £199.
If you would like to discuss getting a capacity report, please contact us using the contact form or by calling 0161 327 2799.