Mortgage Offer Process Explained
If you’re buying a house or a flat and you’re going to apply for a mortgage, it’s best to know how the whole mortgage offer process works, so you know exactly what to expect.
Whilst the details of a mortgage application will be different with each lender, the general process of getting a mortgage offer will be the same.
Before you start your mortgage application, do some research. Look into the different types of mortgages available on the market such as interest only, repayment, trackers and fixed terms. Some mortgage products will suit you better than others and knowing what’s on offer before you start the application process will mean you’re better equipped to make a decision.
Although we’ve listed the following steps one to three, you will be doing a lot of these things simultaneously. After all, you can’t really look for a home to buy without knowing exactly how much you can afford to borrow.
Step 1 – Get Advice
Make an appointment with an independent mortgage advisor who can find the best mortgage deal to suit your circumstances. Using their knowledge and expertise can help you to get a better deal, save time looking at all your options and probably most importantly, they can help you complete the paperwork.
Make sure that any mortgage advisor you use is registered with the Financial Conduct Authority (FCA). To find a financial advice firm near you, visit this FCA web page, enter your postcode and check the “mortgages” button.
You could also speak directly to a bank or building society who may give you a mortgage in principle. This shows how much they would be willing to lend you and is based on their calculations. But even though you may have a mortgage in principle, you’ll still need to satisfy all their requirements to get the mortgage offer.
Step 2 – Find Your Property
You’ve probably got a good idea of what you want to spend on your new home, so have a look in the area you want to live in at your price range. Having a mortgage in principle at offer stage can help you to secure that property whilst you complete the mortgage application process.
Step 3 – Applying for a Mortgage
If you’re using a mortgage advisor to arrange your mortgage, they’ll request all the paperwork they need from you and complete the forms on your behalf. If you go directly to a bank or building society, they’ll do this.
When making your mortgage application, you’ll need to get lots of documents together. If you’re buying a property with your partner, you’ll both have to provide these documents.
You’ll need proof of income and outgoing expenses each month, at least three months of payslips, bank statements and a tax return if you’re self employed. You’ll also need identification documents such as passport and utility bills.
Mortgage companies now decide if you can afford to buy a home based not only on your income, but also on your expenditure. If you can pay off any unnecessary debts or outgoings before applying for a mortgage, this can help you.
Your mortgage company will probably want to get a valuation on the property before they agree to make the mortgage offer. This is to make sure they are not lending more money than the property is worth. They should arrange the valuation themselves.
Step 4 – Get Your Mortgage Offer
Once you’ve completed all your paperwork and documents, you should get your mortgage offer confirmed. Once you have your offer, you should notify your Conveyancing Solicitor and make sure they are on the lender panel to act on your behalf. If your Conveyancing Solicitor is not on the panel this could delay your move.
Then you’re a little bit closer to buying a new place to call home.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London and Manchester.