Take the first step to your mortgage. If you’re not sure what to expect or what you need to do, whether you’re a first-time buyer or experienced property owner, we’ve put together this list of the six steps required to get a mortgage.
Step 1. Monthly income and outgoings
Lenders will want to see proof of your income, type of employment and certain expenditure, and if you have any debts. Ideally, your mortgage repayment each month should be a maximum of one third of your monthly income. Think about the running costs of owning a property such as bills, council tax, insurance and maintenance and don’t stretch yourself if you think you’ll struggle to keep up repayments.
Step 2. Rates, repayment types and mortgage term
To find the most suitable mortgage, you should consider a number of aspects to make sure you get the right deal for you. Is your preference for a fixed, tracker or variable rate? Are you looking for a full capital and interest repayment mortgage or would you prefer all or part of the mortgage on interest-only? Consider how quickly you can pay off your mortgage and if you plan to do this gradually based on your earnings, paying a bit more each month or with an alternative investment plan at the end of your term? You may also want to factor in any pension provisions or benefits that will make up part of your payments.
Step 3. Your mortgage options
Once you’ve provided all the relevant details in steps one and two, our team search various lenders on your behalf and then provides a cost analysis and proposal of your best options.
We regularly access exclusive and semi-exclusive products and our excellent relationships with lenders mean we can deliver the lowest rate and most suitable terms for your mortgage. Such is the strength of our relationship with underwriters, we can often manage to get deals agreed by exception allowing our clients access to lenders that may have otherwise been off-limits.
Step 4. Agreement in Principle (AIP)
Once we’ve found you the best deal, the next step is to secure an ‘in principle’ agreement with the lender, which includes a credit check so that they are happy to finance your purchase. This is based on the details you’ve provided about your income, spending, and debts.
You’ll receive a document that the lender is prepared to lend you the money, subject to the relevant documentation to support your application, which usually will last for 90 days. An AIP doesn’t guarantee you can get a mortgage, but it will give you an idea of whether the lender is willing to provide the amount you need.
Step 5. Making an offer on the property
With an AIP, you can confidently make an offer on a property. Once your offer has been accepted, we’ll continue to progress your mortgage application. This will include arranging a valuation or survey, instructed by the lender, on the property by a surveyor.
If everything is okay and there are no issues during the valuation and application process, you’ll receive your formal mortgage offer. Typically, this takes two to four weeks.
Step 6. Your mortgage offer
If a lender is happy with your application, they’ll make a formal mortgage offer which they’ll send to you, your solicitor and the mortgage broker. All three parties need to check the offer.
Most mortgage offers are valid for six months, however, this does differ from lender to lender so it is always worth checking if you have a tighter deadline.
Finally, the conveyancing solicitor takes the transaction through to exchange and completion.
For a glossary of terms and answers to common mortgage-related questions see our FAQs.