Even though you have been through the home purchase process before, we would really recommend you review what you need for a new home purchase, to make sure you are well prepared and have the paperwork required to get your mortgage approved. Getting a mortgage is so much easier 2nd time round, as long as you do that preparation!
Even though you have been through the home purchase process before, we would really recommend you consider what you need as preparation for your home move. Make sure you have :
Identification - We will always need a copy of your Identification and evidence of your current Address. Is your passport in date? Does your Driving Licence have your most current address? If you need a Visa or other documentation to support your ID, make sure you can produce it (and it is in date).
If you can, turn on Paper Statements (rather than Online) - we can use these to help prove your current address as Online Documents cannot be used.
Bank Statements - If you use Online Banking, do you know how to Download Statements? We cannot use Excel Spreadsheet versions, they must be in a similar format to normal Bank Statements, and we will need 3 months' statements for every Current Account you have.
Payslips - We will need the last 3 months payslips, perhaps the last 6 (subject to the lender). If you receive a bonus then make sure you keep those payslips showing when you receive your bonus, commission, overtime, etc. as the mortgage lenders will always want to see them. If you cannot prove this income, you may not be able to borrow enough.
How Much do I owe on my current Mortgage? - you just need to check your last mortgage Statement or give your lender a quick call. The Mortgage balance will change every day so don't get too hung up on the accuracy. Also if you can make sure you have the Lender Reference Number please!
Are You in a Current Deal? - Are you currently in a mortgage deal that may be preferential to you, or may cost you significantly to break it early? If you have a copy of the Mortgage Statement or Offer letter that would be helpful.
Porting? - If your answer to the above is ‘Yes’ then we will look at the option to ‘Port’, or transfer the mortgage deal to the new property, assuming the lender is happy to have you still and gives you that option. Porting is not an option that is automatic - we would treat the application as if it is a new request, and assuming the lender will sanction the mortgage amount you want, we can then look to 'Port' the current deal to the new purchase, and if additional mortgage funds are needed, we would look to get a yop-up deal from the lender. Leave that bit to us!
Having put all your paperwork together, now is the time to re-establish what you can borrow, based on today's income, your expenditure, etc. If it has been a while since your last mortgage, we still need to go through this assessment as the first step, especially if there have been changes in your employment, earnings, and commitments.
If you have a mortgage already in place, and you are already in a product, then we will assess whether you are better to stay with them, or break the deal and look elsewhere. There are a lot of factors that will influence this decision, our role is to prove which is best.
Once we have established the right lenders and deals for your needs, we will then look to obtain a Decision In Principle
Decision In Principle
A Decision In Principle is an initial agreement from a Mortgage Lender, giving us a good idea of the amount they will lend you based upon your income, and an assessment of what is ‘Affordable’ - This will differ from lender to lender.
We don’t need a property at this time, it’s simply to confirm what you can borrow and a credit check is made at this time. (If you have found a potential property to buy it would be good have those details to hand).
Most lenders provide a letter or certificate that will show that a mortgage has been approved, ready for you to show to an Estate Agent that you can afford to buy a property
In the current climate, finding a suitable property may be your biggest battle - within your price range and the size / location you were looking for.
With your Mortgage ‘Decision in Principle’ in one hand, your deposit in place, finding a suitable property within your budget is your next move.
The vast majority of properties are now listed online, making it easier than ever to see what is available in the local market, with lots of photos, virtual tours, maps, etc.
The most popular sites include :
Once you have found a property you like, speak directly with the Sales Agent and let them know you have a mortgage already approved - you will probably need to show the Decision in Principle, also give them our details.
Make an Offer on what you would like to buy, and cross fingers you secure the property you would like!
At this stage we will complete a Full Mortgage Application, letting the lender have all the information we have collected from you so far. This will include the property details, solicitors details, all the evidence of income and bank statements, etc.
If it has been a while since the original 'Decision In Principle' then we will need more up to date Bank Statements and Payslips.
We will also take this opportunity to see if a better Mortgage Deal is available, which may be with another lender - leave that to us to check and report back!
This is the time in the process that fees may be payable, subject to the lender - some will need an Administration Fee and/or a Valuation Fee payable on application, or they won't do a great deal. As your Mortgage Broker we will advise you accordingly, and collect card details (Debit or Credit) from you.
See your section on Valuations for more details of the different versions of Property Valuations.
Most lenders will only arrange a Basic Valuation Report to help improve the speed of the whole Mortgage Process. Whilst basic, they give everyone a good overview of the condition of the property and expected value.
Whatever the surveyor says, the lender has to comply!
Once the lender has had a basic report about the property back for review, assuming all is okay the mortgage Lender will then look to issue a Mortgage Offer.
On occasions the surveyor will ask for additional information and reports - for conditions such as Damp and Timber Decay, or if there has been some structure movement. The Mortgage Offer may be delayed pending receipt of these reports (normally at your cost) or it may well be that some funds are retained by the lender, released once remedial work is completed.
We will talk through any of these issues should they arise with your valuation / survey.
At this point the Mortgage Lender will be committing to lend you the money agreed, assuming everything is okay with the property and you (and your paperwork). The Mortgage Offer will confirm the terms on the borrowing, so the amount, monthly payments, rate of interest, fees, etc.
A copy of the Mortgage Offer will be sent to you, your Solicitors and us for review - should we find any issues we will speak with the lender on your behalf.
Your Solicitors will then be able to request the money from the lender once their Legal Checks and their process is completed satisfactorily.
(Check our Section on Solicitors and the Conveyancing Process)
Whilst the purchase process is moving along, assuming your are selling at the same time as buying, you will have that process to consider too. Most of the time you will have the same solicitors dealing with both sides of the transaction.
There will be an eventual 'Exchange' of contracts, where the sale and purchase are formally processed and everyone in 'The Chain' are committed - the completion date is typically 1 or 2 weeks afterwards, but you should all move on the same day.
Your removal firm need to be ready for your move, with the typical senecio of you emptying your home by lunchtime on the Completion date, and you move into your new home in the afternoon, having collected the keys from the agent on the way.
The day will be a lot more hectic than that, but that is the very basic process!
Let us know if you have found this information useful!
Essex Home Finance Ltd
1 High Street
01245 398466- Office Number
Essex Home Finance Ltd is an Appointed Representative of Mortgage Intelligence Ltd which is authorised and regulated by the Financial Conduct Authority under number 305330 in respect of mortgage, insurance and consumer credit mediation activities only.
Registered address: 1 High Street, Chelmsford, Essex, CM1 1BE. Registered in England & Wales under number 10607263.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*From the 1st March 2018, We do not charge any Broker Fees for Residential First Time Buyers, Residential Home Movers, Residential Remortgage, and all Product Transfers (Residential or Buy to Let).
There will be a fee for all Buy to Let Purchase and Buy to Let Remortgage cases. Typically our fee will be £149, payable on Offer. We will agree any fees with you before we proceed with your case.
We always aim to provide a high quality service to our customers. However, if you encounter any problems and we are unable to resolve them you can take your complaint to an independent Ombudsman.
Our advice is covered under the Financial Ombudsman Service. You may be able to submit a claim through the EU Online Dispute Resolution Platform If you live outside the United Kingdom or if you prefer not to deal directly with the Financial Ombudsman Service.