Posted by Malcolm Wallace | April 13, 2018
Confessions of a Mortgage Administrator
We think Mortgages are easy. There’s lots of hoops to jump through but it all looks odd if you don’t do mortgages every day. Thankfully, we do, so here’s a view from behind the scenes.
The first step is to give us a call. Buying your first property or even moving house is one of the biggest decisions you will make. Let us ease your worries and let our mortgage specialist take the pressure off.
Before you start
Before we begin the mortgage application process you can help by getting your finances in order.
- Get a copy of your credit report which is held by credit reference agencies such as Experian or Equifax.
- Work out how much you can afford as a deposit? Put together a breakdown of all your income and expenditure, remember to count any pension contributions you make or childcare costs. We can help you gather your spending habits if you get an up to date bank statement.
- Think about extra costs – legal/advice costs? Stamp duty costs? Have you got enough money for those?
- Read our Top Ten Tips page, here.
- And here is a list of pitfalls to avoid
Working out how much
Once we meet, we can put together some options and discuss what amount you could potentially be able to borrow.
We can then submit a ‘decision in principle’. That means the lender will initially assess your circumstances, including your income, outgoings and your credit score. They will tell you an amount that they are willing to lend.
The lender will have access to your credit file so it’s best to disclose everything, including any credit card balances or loans. They will be able to see it all anyway.
You can then go off to find the house you want to buy. Some estate agents will ask to see a copy of the decision in principle as proof that you are able to buy the property.
I’ve found a house/flat/mansion/etc!
When you find a property and make a successful offer, we submit your mortgage application. The lender will assess your full application along with the supporting documents they request. Those are the documents that most of us forget to file carefully, like payslips; P60 and bank statements in full (well, ish) and will complete the initial checks.
Sometimes the lender asks for additional evidence, we will keep you updated throughout this process.
Once the lender has completed their checks they will request a valuation of the property you are purchasing.
Valuation? But I already know the price, don’t I?
We can help you choose the right valuation survey relevant for the type of property you plan to buy.
The basic survey is the cheapest, but perhaps not in the long run because it might miss important things that you need to fix later.
Once the valuation is complete, the lender will carry out their final checks and will send their mortgage offer to you and your solicitor. This will include a copy of the valuation report. If you want to make any final changes to the loan amount or purchase price, we can discuss this with you at this point.
For example, if the house needs work done that you didn’t know about. You might have to ask the seller to reduce the price a little, so then you can borrow a little less.
The Mortgage Offer: When it all gets real
If you accept the official mortgage offer your chosen solicitor will begin work. It is their job to liaise with the vendor’s solicitor and put together the binding mortgage contracts. The timescales to complete this work vary and are out of our control but we do like to give the legal team a gentle nudge every now and again.
The offer usually comes between a week and a month after you begin the application. You might think the solicitor could be getting on with something first, but they avoid that because the mortgage offer is the first real commitment from the lender that you can borrow the money.
Are we nearly there, yet?
Yes. After the mortgage offer, your solicitor/conveyancer will finish their work, checking legal stuff. Expect their bit to take a few weeks. Here’s a tip – give them a deadline. They might resist, but we see customers move quicker with a deadline. Also – tell them you want to exchange a week before you complete.
During the solicitor’s bit, you might agree a change to the price for some reason. Do come back to us and tell us straight away because we will need to get you a new offer prepared. You need the offer updated even if you negotiate the price down by £1!
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for the mortgage advice, the amount will depend upon your circumstances. The fees for our advice and service range from £zero if we are advising you on a new mortgage product from the same lender and the lender pays us, and typically the lender pays quite a lot of our £1,150 fee so there could be only £150 from you.