Getting a mortgage can be a stressful time, however, it doesn’t have to be. The following guide will help you through the steps required to ensure a smooth, hassle free process.
1) How much can I borrow?
The first step in this important journey is to find out how much you can borrow. All lenders now use affordability calculators which assess your income and expenditure to work out what they are prepared to lend you. It’s also worth noting that most lenders offer different levels of affordability so it’s worth investigating several options.
2) How much will my monthly payment be?
The next step is to find out details of the monthly payments and how much deposit will be required. We always recommend having a face to face meeting with one of our fully qualified mortgage advisers who can search over 10,000 mortgage products, from 90 lenders to find the most suitable deal.
Now you know how much deposit you need, how much you can borrow and your monthly payment the next step is to find a house.
3) Finding the perfect property
At this point we suggest registering with your local estate agents who will be able to let you have details of available properties within your budget. We also recommend using one of the several online property portals which list the majority of local properties. If you see a property of interest then you need to contact the agent to arrange a viewing. Some agents may require you to provide proof that you can get a mortgage.
4) Getting a mortgage in principle
A mortgage in principle is where the lender will undertake a credit search and an assessment of your income and offer an ‘in principle decision’ to lend you the money. This decision is still subject to full underwriting and the bank will need to see your bank statements and payslips etc. A mortgage in principle is also known as an AIP, MIP or even a mortgage promise. Our mortgage advisers can help you obtain your mortgage in principle.
5) Making an offer
Once you have found a property you wish to buy then the next stage is to make a formal offer. Most vendors will factor in to their asking price an assumption of a small reduction. Most people usually start at 10% below the asking price and work upwards until a figure is agreed. Our advisers will also be able to make the offer on your behalf. Once the offer is accepted then you need to start the mortgage process.
6) Applying for the mortgage
Now your mortgage in principle has been agreed and your offer has been accepted, you need to apply for the mortgage and nominate a local solicitor. Once an appointment has been made to see our adviser, they will guide you through the process of making the application to the Bank or Building Society. This will involve getting the following items together; Last 3 months payslips or your latest 2 years accounts (or SA302) if self employed, Last 3 months bank statements, proof of your ID (passport or driving licence) a recent utility bill and your proof of deposit (a letter from whoever is gifting it or a copy of a bank statement). Once the bank has underwritten your application they will instruct a chartered surveyor to carry out a survey/valuation on the property. This is mainly for the bank to ensure that the property is worth what it is being sold for and this it is acceptable security for the loan.
7) The mortgage offer
Once the lender has approved your application they will issue the mortgage offer. This is a standard document that details all the terms and conditions of your mortgage, a copy will go to you, your solicitor and the mortgage adviser.
8) Exchanging contracts and completion
Once your solicitor has completed all relevant checks i.e. ensuring the property boundaries are registered correctly with the land registry, any environmental or planning issues are addressed, the solicitor will arrange to exchange contracts. This is the legal term meaning to put the sale ‘on contract’ whereby you are required to pay your deposit and are now legally obliged to purchase the house. The completion date usually follows shortly after. You may now arrange with the selling estate agent to collect the keys.
Let’s Talk Mortgages provide expert mortgage advice from local brokers based in York, Leeds, Hull and Sheffield. To arrange a free face to face consultation please visit www.lets-talk-mortgages.co.uk or our local pages: