The Application Process
By Mark Carney. January 18, 2024.
Whether you are a first-time buyer, looking to buy your next home, or remortgage and get a new deal for your current property, you will be faced with the mortgage application process.
If you are a first-time buyer you may not know where to start. If you have bought before you may still be apprehensive. How much can I borrow? Do I need to find a property first? How much deposit do I need? How much will the mortgage cost? Just some of many questions you’ll be asking yourself.
The first thing you need to do is contact your mortgage broker. They will go through your specific situation and circumstances and go through the following.
Step 1 – Personal Details, Income and Expenditure
Your broker will go through your personal details – name, address history, income details – salary, overtime, bonus, any allowances, tax credit etc. They will also go through all your financial credit commitments – credit card balances, loan car/finance payments.
Your broker will also ask about any potential deposit/savings you may have.
Step 2 – Affordability and Decision in Principle
Following on from step 1 your broker can now run an affordability check with lenders to establish how much you can potentially borrow. They will also go through current mortgage deals available to you to help establish monthly costs for your potential new mortgage. Its at this point your broker will likely carry out a credit check with a potential lender. This is normally a ‘soft search’ credit check, which doesn’t have an impact on your credit score, and its only you who will know this has taken place.
Step 3 – House hunting (buying a house only – remortgage go to step 4)
With a successful decision in principle, you have the peace of mind of knowing how much you can borrow and what’s affordable to you. You can now begin the hunt for a new home. Estate agents will likely request a copy of both your brokers details and decision in principle. Once you have found a property you like, have made an offer, and the offer is accepted you can move onto Step 4.
Step 4 – Submission of the full application
Fantastic you have had an offer accepted. You need to let your broker know asap. They should already have details and documents saved on file from previous meetings, so will only need details of the property and estate agents to submit the full mortgage application. Once submitted the lender will arrange a mortgage survey on the property and carry out their “underwriting”. This is the lender checking that both you and the property are suitable for the mortgage. Once complete the lender will issue the “Mortgage Offer”.
Step 5 – Solicitors / conveyancing – This is the legal part of the process.
Purchases usually take between 6 – 12+ weeks. The conveyancing solicitors are appointed by you and carry out the legal tasks of the process and liaise directly with the sellers legal team.
Your broker will have access to solicitors they work with on a regular basis and can provide costs for them when needed.
Remortgage legal process
As new providers want your business so much, the new lenders often provide the solicitors free of charge. As you are already the legal owner of the property this is normally a straightforward process and completes within 2-4 weeks.