Hello and welcome to my first advice column of 2023 about all things mortgages.
Many people we speak to have no idea or can’t remember what’s involved in getting a mortgage for a new home, especially if you’re a first time buyer or haven’t taken out a new mortgage in years.
The great thing about using a mortgage broker to arrange this is they’ll take the stress and hassle away from you when arranging the mortgage, deal with the lender directly on your behalf, as well as advising you on the best deals available.
The first thing you should do is look to get a Mortgage ‘Decision In Principle’ agreed so you know what your parameters are when looking to buy a new property..
To do this, you would have an initial appointment during this the adviser will gather your basic information such as employment status, income and any credit commitments you pay, like credit cards or loans.
Your broker will then calculate what the likely borrowing amount is available and submit an initial application to the relevant lender(s).
Once agreed, this gives you the approximate purchase price and the deposit required you can look at when searching for properties.
It also gives you an idea of what your monthly mortgage payments are which can help you decide on how high or low you can go with property prices.
Once you have a ‘DIP’ agreed, as it’s also called, you can then start the process of viewing properties and will be able to provide a certificate as evidence of your ‘DIP’ to estate agents.
After you have an offer accepted on a property, which is done through your chosen solicitor, you supply your supporting documents to the adviser. This usually consists of payslips, bank statements and ID.
A full mortgage application can then be submitted by your mortgage adviser and it goes into a queue for the lender to work through.
The lender will conduct their checks, called underwriting, and deal with your broker directly if they have any questions.
If they are satisfied with the information supplied, the property valuation is acceptable along with the property deemed suitable for lending and it passes the final credit check, a mortgage offer will be issued.
That essentially guarantees you the mortgage borrowing and so long as there’s no significant changes to your circumstances before completion, your solicitor will complete the legal work required and you should expect to get the keys to your new home within six to eight weeks and then your mortgage will begin.
That’s a brief overview of how it works and I hope it’s useful for anyone looking to buy a new property in the coming months.
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