Hi if we haven’t met before, my name is Dan, I am a CeMAP qualified mortgage & protection adviser. This video is purely for educational purposes only, and should not be seen as advice or a recommendation to act and I must stress your home may be repossessed if you do not keep up with the repayments on the mortgage.
With that out of the way, on with the video.
FIrstly, find yourself a mortgage adviser, and get in touch with them.
We would take very basic details from you, like:
Size of your deposit
The property value you’re looking to achieve
If you’re employed or self employed
How much your earn
and, questions about your credit history.
This information helps us establish at the very beginning if you could qualify for a mortgage before wasting your time any further.
Go through a “Factfind”.
Your mortgage adviser will go through the process of a factfind, which is a mortgage application form once they’re confident that there is a good chance of you obtaining a mortgage.
This will ask for more detailed information about you. We will also ask to see your passport and payslips at this stage.
This helps iron out any potential issues that may arise further down the line.
If you’re self employed, before approaching a mortgage adviser, it will speed up to process if you’ve already filed your latest years accounts.
Next stage is Lenders Affordability
Once the mortgage adviser is happy they have all of the information they need and the factfind has been completed then they’ll look at the lender’s affordability calculators.
Each lender has their own affordability calculator, as each lender will vary on how much they will lend. This is why it’s important you provide us with payslips or accounts from the very beginning. You’ll find more information about this in a video here
Searching the Mortgage Market for you
Once it has been established which lenders will lend the amount you require to buy the property, we will search the market for the most suitable lender that meets your requirements.
I must stress, it isn’t as simple as placing you with the lender who has the lowest interest rate, as there are other costs associated with mortgage products that need to be considered in the research before a recommendation can be made, such as product fees, valuation fees, and potential booking fees. You also occasionally receive cashback from lenders which need to be calculated.
Decision in Princple
Providing you’re happy with the mortgage quote which was supplied to you, then the next step is to obtain a Decision in Principle this is known as a DIP or AIP, which means Approved in Principle.
This is the process most estate agents ask you to be at before putting in a formal offer on a property. This is also the stage where a lot of mortgage advisers will ask you to instruct a conveyancer, if you haven’t found one yet, do not worry, a lot of advisers have dealt with firms in the past that they can recommend.
During the Decision in Principle process, you are credit searched and if successful, this is the lender telling you that subject to all the information you have provided being true, then they will consider lending to you.
It is important at the beginning to know what your credit history is like as it will dictate which lenders you’ll qualify with. I have made a couple of videos on how to obtain your credit report for free and also how to improve your credit score.
For more information on this, watch this video but I will also put links in the description.
Take your time when viewing the property, this is potentially going to be where you live, and where you’ll be investing thousands of pounds, so you need to make sure it is the right property for you.
You should not be afraid to ask to view the property a couple of times before putting in an offer. Perhaps take someone who already owns their own home with you, as they might know what to look out for.
Put an Offer in
Once you have found a property you like, then you should put an offer in to purchase the property. I have covered a video on 10 mistakes people make when buying a property, that can be found here
Hopefully, this is successfully accepted.
Next step, the mortgage application.
The mortgage adviser will provide more in-depth details about you to the mortgage lender, along with your proof of income, bank statements, and identity.
A valuation will be carried out on the property you’re buying, at some stage during the mortgage application process.
A lot of lenders these days will not book a valuation until the underwriter has reviewed your application and is satisfied but if you’re paying for a valuation, a bit of friendly advice would be to get the valuation put on hold until you or your mortgage adviser are more confident that you’ll be approved.
You do not want to pay for a survey on a property if your application is going to be declined.
Whilst on the subject of valuations, there are 3 main types of survey which can be carried out. Speak to your mortgage adviser to find out which one is best suited for your needs.
This is a legally binding document from the lender saying they’ll be happy to lend. One thing to note here though is some lenders will place “Special Conditions” on their mortgage offer, which your conveyancer will need to satisfy before you are able to complete the mortgage.
IF you haven’t yet instructed a Conveyancer, now is the time to do so.
Whilst the conveyancers are carrying out the work that needs to be done, you should be discussing with your mortgage adviser your insurance needs.
There are various insurances which you should be considering. Depending on your circumstances and needs, your mortgage adviser will make their own recommendations.
All the insurances are optional, but very important and you should consider them as they will provide you with protection and peace of mind of maintaining the mortgage. I covered this in a video here
The only insurance which is a legal requirement is buildings insurance as this acts in a similar way to car insurance.
Sign Contracts & Exchange
You will sign contracts and exchange, once the conveyancer has carried out the required work to successfully purchase the property.
You will set a completion date when you exchange, this will allow the lender enough notice to send the funds to the conveyancer and for everybody in the property purchasing chain to make arrangements to move their belongings to their new homes.
Hopefully that all makes sense.
If you’d like my help obtaining a mortgage, please contact me, my details are also below.
Also, not expected or necessary but sometimes I am contacted to ask how you can thank me for producing helpful videos, if you’d like to do this, you can buy me a coffee using the link below.
Check out this video to make sure you avoid making the 10 most common mistakes which are made when buying a property.
Remember, your home may be repossessed if you do not keep up with the repayments on the mortgage.
See you next week.