In today’s blog, we breakdown the stages of applying for a mortgage to help simplify the journey. It can seem like a daunting process, but with our help, you’ll be collecting the keys with confidence you got the best deal possible for your first home.

1. Prepare your finances:

• Financial health check-up: take stock of your finances. Calculate your monthly income and expenses to see how much you can comfortably afford for a mortgage payment. We can help you estimate potential loans and repayments.
• Deposit: gather your savings as a deposit. While 5% is the minimum, aiming for 10% or more usually gets you better interest rates. Consider government schemes like the Lifetime ISA to boost your deposit, or take a gift from a family member.
• Credit score: Check your credit score and fix any issues to improve your borrowing power. Get your free credit file from Check My File today (free for the first 30 days, then £14.99 a month, cancel at any time).

2. Finding the right mortgage:

• We’ll help you navigate which lender suits your financial scenario best, and compare their mortgage products. We’ll advise on whether fixed-rate, variable-rate, or tracker mortgages would be best, and help you understand the pros and cons of each.
• We’ll apply for a Decision in Principle (DIP): This will confirm how much you can borrow before officially and will need to be sent to your estate agent once your offer is accepted.

3. Applying for the mortgage:

• We’ll ask for documents like payslips, bank statements, and proof of address to supply to the lender.
• We’ll source a reliable, recommended solicitor for you.
• We’ll then submit your application and supply all the requested documents to the lender.
• The lender will carry out a valuation to ensure the property you want to purchase is priced correctly.
• Underwriting: The lender will assess your financial situation and property details to determine your eligibility.

4. Offer and completion:

• When your offer is issued, we’ll send it to you to review. This will detail the terms and conditions, interest rates, repayment schedule, and any fees.
• Complete legal formalities: Once you accept the offer, the solicitor and surveyor to handle legal checks and property valuation.
• Exchange contracts: This makes the purchase legally binding. You usually pay the deposit at this stage.
• Completion day: This is when the ownership of the property is transferred to you and you start making mortgage payments.

Remember:

• Communication is key: Stay in touch with your lender and solicitor throughout the process.
• Ask questions: Don’t hesitate to ask us for clarification if anything is unclear.

Annabelle Bezant, January 2024

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