Hello and welcome to the June column about all things mortgages.
Many people we speak to have no idea 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 will take the stress and hassle away from you when arranging the mortgage and deal with the lender directly on your behalf, as well as advising you on the best deals available for your circumstances.
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 home, such as purchase price, borrowing amount and what deposit you’ll need.
To do this, you would have an initial appointment, which can be done over the phone or face to face, and 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 you can look at when searching for properties and the deposit required.
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, who may look more favourably at any offer you submit for a property if you already have this in place.
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. These are then used as evidence to a lender that you can afford the mortgage and for them to complete their checks.
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 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. Simple as that!
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. See you all next month.
