First Time Buyer
Buying your first Home is a real significant step in your life, so it is important to get the right amount of help and assistance from the professionals who are here to help you achieve your goals.
Getting the right mortgage is probably the most important element of this process – your home is going to be the most expensive purchase you will make, so its really important not to make any mistakes yourself, as it could cost you a significant amount of money.
So how does the whole process work? There is a process that all clients normally follow, as it follows a very logical process and makes it as straight forward as possible :
Before you have even started looking at mortgages and properties, we would really recommend that you get your paperwork in order and ready.
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 – I 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.
Deposit – As a First Time Buyer you may have either saved your deposit and/or got some help from your family. If you have savings, then we will need bank statements showing your savings, if you have had a Gift then we will need this declared. It’s not just to show you have the Deposit Money, but Money Laundering Regulations ask us for the Source of your Deposit too.
With the majority of your paperwork in order, now is the time to enrol the help of a Mortgage broker to advise on all your financial matters. By approaching someone like Essex Home Finance, we have helped hundreds of First Timer Buyers and Homemovers through the same process you are now facing. Tap into our help, advice and assistance, it will really make it less stressful (especially if you have all your paperwork in order!)
We will look to establish how much you want to borrow and can afford, and once we have looked at the market options we can recommend the right lenders and mortgage deals for you. We don’t just check with 1 or 2 lenders, but a considerable number of the UK Mortgage lenders, including High Street Lenders, Regional Building Societies and Specialist Lenders – including a number of exclusive deals and cheaper options you won’t find by going direct.
Once we have established the right lenders and deals for your needs, we will look to take enough information 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’. As Mortgage Brokers we will look to match you to the right Lender or Lenders, and make that approach on your behalf. 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.
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
Now this might be the hardest part of the whole process!
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)
You will get there eventually!
The whole process can take around 10-14 weeks on average, but once that date comes, the experience becomes a more pleasurable one! Money will be requested by the solicitors, paid directly to them and they will ask you for your deposit monies too, plus their fees and Stamp Duty if applicable.
On the Set Completion Date, that money will be sent onto the Sellers Solicitors, and the Estate agents will be able to release the keys – you are now a First Time Buyer!!
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: Suite 1, 8 Kingsdale Business Centre, Chelmsford, Essex, CM1 1PE
Registered in England & Wales under number 10607263.
Your home may be repossessed if you do not keep up repayments on your mortgage.
We do not charge 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.
There will be a fee for all Equity Release Mortgage cases. Typically our fee will be £695, 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.