The mortgage process can seem complicated but with the aid of a good mortgage broker everything should be taken care of seamlessly:
A lender or mortgage broker will need to assess your current financial position to identify how much you can borrow.
Once it has been established how much you can borrow, the lender or mortgage broker will apply for a Decision in Principle. This will include a credit score being conducted by the lender, and assuming that they are happy they will provide confirmation that ‘in principle’ they agree to lend the amount applied for.
This is not the same as a mortgage offer and on represents an informal agreement based on the limited information presented at this stage.
Once you have found a suitable property it is time for the lender or broker to present their mortgage recommendations and submit the mortgage application. The recommendation will be based on your current circumstances and what is best for you in the short, medium and long term, and based on the discussions that you have had with your advisor.
The mortgage application – this is that stage that ALL necessary information is disclosed to the lender, and all applicable evidence is provided by the applicant – pay slips, bank statements, current debt position, any commitments e.g. childcare, property information, address history, and adverse credit.
The lender will then take this information and fully assess it, or underwrite it, as well as performing a full, in-depth credit search on the applicant/s. The lender will also request for a valuation to be conducted on the property to ensure that it meets their criteria and is suitable for mortgage purposes.
This may be quick or take additional time if the lender has additional queries.
Once the lender has completed all their necessary checks and fully underwritten the application they will then produce a mortgage offer**. This is a binding agreement that the lender will lend the money when requested by your solicitor.
**A mortgage offer is based on all the information remaining the same up to completing the mortgage, so some lenders will conduct a further credit search to ensure no additional borrowing has taken place in between offer and completion, and also if anything changes with income etc… then the offer can be withdrawn.
Completion, this is the point where your solicitor has completed all of their necessary searches and had all enquiries answered by the vendors solicitors, or developers, solicitors and request the funds from the lender, to complete the mortgage. Once the funds have been paid to the vendor’s solicitors the purchase is complete and the property is yours!