Applying for a mortgage can feel complicated, but with the right guidance, it’s straightforward. Whether you’re a first-time buyer or moving home, knowing what to expect helps you confidently navigate the mortgage process. From preparing documents to submitting a mortgage application, each step plays an important role.
Step 1: Assess Your Finances
Before starting the mortgage process, review your financial situation. Lenders will check:
- Your income and employment status
- Credit score and history
- Existing debts and expenses
- Deposit amount
A common challenge is having a low credit score which can affect your chance of mortgage approval. Improve it by reducing debt, making timely payments and avoiding new credit applications before applying.
An Independent mortgage broker, such as Stuart Brown, can assess your eligibility and suggest suitable mortgage options. We can do so whilst looking at many different lenders in a single appointment. This will save you time and also minimise unnecessary credit checks.
Step 2: Get a Mortgage Agreement in Principle
An Agreement in Principle (AIP), also known as a Mortgage in Principle (MIP) or Decision in Principle (DIP), gives you an idea of how much you can borrow. This proves you’ve already been assessed by a lender and are financially capable of securing a mortgage, and at what level you can buy/borrow. It also helps when house-hunting, as sellers (and their Estate Agents) see that you are a serious buyer.
Most lenders offer an online application process for this stage, making it quick and easy. It is very important to note that several AIP’s are not advisable as it will mean multiple credit checks which can affect the chance of approval. It is for this reason that a single good Independent Mortgage Broker is a wise choice to use as they can approach the most suitable lender based on individual needs and circumstances, whilst still shopping around the other lenders in due course for you too.
A point to remember is that an AIP usually lasts between 60 to 90 days so you may need to renew if house hunting takes longer.
A failed AIP can result from errors in your credit file or affordability issues. Before applying, check your credit report and ensure your details are correct. The credit file typically shows whether you are on the electoral roll, what credit you have and how it has been conducted. Obviously we can guide you through this process so feel free to contact us.
Step 3: Find Your Ideal Mortgage
There are various mortgage types, including:
- Fixed-rate mortgages (static payments for a period of time)
- Tracker rate mortgages (rate charged and hence payments may change)
- Variable-rate mortgages (rate charged and hence payments may change)
- Discounted rate mortgages (rate charged and hence payments may change)
Choosing the right mortgage is important. A fixed-rate mortgage provides predictable payments, while one of the variable type schemes (tracker, discount, variable rate) rate may save you money if the rate drops. However, it could also result in an increase to your repayments if they rise. An Independent Broker can help you decide which mortgage is right for you based on your financial goals and circumstances.
Also of course they can shop around the market for you to find the best rate, saving you money.
Step 4: Submit Your Full Mortgage Application
Once you’ve found a property and had your offer accepted it’s time for the formal mortgage application process. You’ll need to provide:
- Proof of income
- Bank statements
- Proof of deposit
- Identification and address verification
In some instances additional documents may be required. A broker can guide you through this step to avoid delays. They will deal with the lender on your behalf, saving time and using their knowledge and experience to minimise the paperwork needed.
Mortgage approval can take from one to four weeks, depending on the lender, their current service levels and your circumstances.
To speed up the process, we always ensure all documents are submitted promptly, additionally making sure only the necessary documents are submitted to help prevent delays and also unnecessary additional questions coming from the lender.
At this point you will also need to instruct a solicitor or conveyancer to act for you. Their role is to liaise with the sellers legal adviser and undertake searches, deal with Stamp Duty and Land Registry too. We can recommend a suitable firm if you want us to.
Step 5: Property Valuation and Mortgage Offer
The lender will arrange a mortgage valuation to ensure the home is suitable security for the proposed mortgage amount. If everything checks out, you’ll receive a mortgage offer (after all other checks have also been carried out e.g. proof of income etc).
If the property is down-valued, your lender may reduce the loan amount. In some instances additional reports maybe requested by the lender, for example if their valuer has indicated damp or other aspects that should be checked further.
In either case you may need to review the situation possibly going on to get tradesman estimates, renegotiate with the seller or increase your deposit.
In addition to the mortgage valuation you may want to arrange a more detailed survey to assess the condition of the property for yourself too.
Step 6: Exchange Contracts and Complete Your Purchase
Your legal adviser will check out all legal aspects of the property and liaise with the sellers solicitors, exchange and completion dates will be agreed between parties and all enquiries resolved beforehand.
Once contracts are exchanged, the purchase is legally binding. At this stage, your solicitor handles key tasks. This includes final property checks, arranging funds transfer from the lender and deposit from you.
On completion day, funds are transferred to the seller and you receive the keys to your new home.
Get Expert Help with Your Mortgage Application
Navigating the mortgage process alone can be complex. Here at Stuart Brown, we provide expert guidance, ensuring a smooth experience from start to finish.
Whatever your situation we can help, we have experience of over 25 years in the industry and we’re here to assist at every point in the process.
Contact us today for expert mortgage advice and start your journey to homeownership with confidence.
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