The process of obtaining a mortgage can be daunting to many people. In fact, our recent survey revealed that 61% of consumers find the process of buying a property confusing. That’s why we’ve put together this ‘mortgage manual’, to help break down and simplify the whole process.
Step one: Speak to a qualified mortgage advisor
Without professional advice and guidance, finding the right mortgage for you prove rather difficult. It’s often a good idea to have a quick google search of rates available, and then set up meetings with these lenders directly. During these meetings, you should discuss and consider set up fees, early repayment charges, the reversion rate after your initial term runs out, and whether you will fit the lender's criteria? These are just a few of the questions you have to consider when choosing the right mortgage.
Step two: Obtain a mortgage in principle
Also known as an agreement in principle, this is dependent on your credit score and involves your chosen lender pre-approving your mortgage subject to finding a property. A mortgage in principle doesn't cost anything and doesn't obligate you to take out a mortgage with that particular lender.
Step three: Choose and instruct your solicitor
It’s important that you feel you can speak with your solicitor whenever needed, so ensure you find a one that you have researched thoroughly and feel you can trust, as well as compare prices. Also make sure you check is that the company you decide on has at least two partners, as some lenders will not deal with a sole practitioner.
Step four: Offer on the property you wish to purchase
Once you've obtained a mortgage in principle, you’re ready to put down an offer on a property you wish to purchase. Putting an offer on a property can be tricky, and there's no sure way to achieve the best possible price, but remember to be brave but not too bold with negotiation.
Step five: Full mortgage application
You are now ready to apply for your full mortgage. At this point, all necessary research is carried out and application forms need to be completed and sent off alongside any further supporting documentation. The admin process necessary to keep on top of the lender's application process and ensure it runs as smoothly also begins at this time, and you should contact the estate agents and your solicitor/conveyancer to let them know the application has been completed. Most applications are now completed online, and therefore potentially be received by the lender the same day your offer is accepted.
Step six: Instruct a survey
A survey is necessary to avoid unwelcome structural surprises once you move in, and is also a good opportunity to discuss the property’s price with the vendor should your survey reveal that the property needs some work. Get a recommendation from your mortgage lender, family members or friends as to which surveyor you should choose, and make sure you choose the right type of survey for you, as there are several options out there.
Step seven: Supply your lender with any paperwork they request from you
At this point, all supporting documentation should be sent to your lender to confirm the purchase is going ahead.
Step eight: Property valuation
Your lender will insist that a basic mortgage valuation is carried out by one of their surveyors. This is primarily for the lender's benefit, but the cost for this is normally paid for by you on application. This particular survey will highlight any major defects, comment on the overall condition of the property and confirm whether it’s worth the offer you have put down for it.
Step nine: Receive your mortgage offer
Once your lender has assessed your mortgage application, the survey report and all the supporting documentation, they will issue you with a mortgage offer.
Step ten: Exchange and completion
Once you have your mortgage offer and the solicitor has completed all the legal work required, you will be able to exchange contracts. Exchange of contracts is the point when you are legally bound to purchase the property and you become the legal owner. From this point, you can start putting the wheels in motion for moving in, and it is also at this point that you may also be asked to put down a deposit and a date for completion is set.