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You have decided you need a mortgage, whether that is for your first home or simply a new purchase. We are your first port of call, even before you have decided on which house to purchase! The most important factor is understanding how much you can afford to borrow, so that you know your budget when looking at potential homes.
1 – Free initial meeting
The first step is to book your free of charge initial meeting to discuss your circumstances. We will cover how the process works, the fees involved and get to know you a little better. There are no silly questions at any point, because it is vital you fully understand every aspect and we want you to feel excited rather than daunted!
2 – Get to know you and your situation
If you are happy to continue at this stage, we will conduct a fact-find with you either at the end of the initial meeting or we will arrange a specific fact-find meeting. This involves determining some details related to your financial situation including income and expenditure. We will also take the time to understand your feelings around different repayment methods and products available. Our job here is to make sure you understand your options and are clear on the pros and cons of each one. Based on the information you provide, we will discuss rough number for how much you are able to afford.
If you do not already have a solicitor in mind, it is recommended to find one at this early stage. You may be asked for the contact details of your solicitor when you are making an offer on your future property.
3 – Obtain Agreement in Principle
Using the data gathered from you, we will then get to work finding you the best possible deal. We search across the entire market so you know we only have your best interests at heart. Once we have found the lender that is offering a suitable mortgage, we will work with you to obtain an Agreement in Principle. Learn about these on our Mortgage FAQs page by clicking here.
Many estate agents will require an Agreement in Principle (also known as Mortgage in Principle, Decision in Principle or Approval in Principle) before allowing you to view properties. The document confirms how much you are likely to be able to borrow. In order to apply, we will use your details such as income, expenditure and address history. They are fast to obtain and usually last for 90 days. We will process everything from our side as soon as possible so you are not left waiting, because the exciting part comes next!
4 – Find your dream home
This stage doesn’t officially require help from us, but we will still be here if you need support. You know how much you can borrow and from that can work out your budget. The time is now for you to start looking for you new home. It is extremely normal for this to take a long time because after all, you are making one of the biggest commitments of your life! Don’t ever feel you are being too fussy as you have to see yourself living there and being happy. You may find that as you view more houses, you gain a deeper understanding of aspects you do or do not want in the home you choose.
5 – Have offer accepted
Hopefully this is a fast and straightforward step in the process. We all know too well that there can always be complications along the way when buying a house. But that moment will come when you receive the incredible news that your offer has been accepted!
6 – Instruct solicitor
Now is the time to let your solicitor know about your progress as they will need to start their roles, including:
7 – Submit mortgage application
Before completing the application forms, we will provide you with the mortgage illustration, which clearly details all the information relating to the product you are considering. We can give you two or more if you are still unsure of which product to go for!
Now the real paperwork begins, but don’t worry! We will complete as much of the application as possible and only lean on you when we need to confirm details or obtain signatures. We will need you to carefully read through the documents to ensure everything is correct. At this stage, the first part of our fee will be due, but you are able to reclaim this if the process breaks down through no fault of your own.
You may be thinking that you already have your Agreement in Principle, but that is not an obligation from the lender and is only to be used as a guide for affordability. Furthermore, you now know the exact property you are purchasing so the application is far more comprehensive.
At this stage, you should also decide which survey to commission on the property. The lender will require a basic one, but you have the option of commissioning a more detailed inspection and this is highly recommended, particularly for older buildings. Find out more about the different types on our Mortgage FAQs page here.
The lender will review your application as well as carrying out a valuation on the property. This is to make sure that the property is acceptable to be borrowed against and that there is sufficient value in the property to cover them in case you fail on your repayments. You should expect to hear from the lender within 3-6 weeks depending on the lender and the complexity of your situation.
Rest assured that we will chase the lender regularly to ensure that you receive your offer as soon as possible.
8 – Thoroughly check offer and special conditions
We will of course do the same, but it is important you also have a careful read through the mortgage offer and ensure all details are correct and the terms are as you expected. Anything you are unsure of, please let us know so we can clarify for you.
The mortgage offer is not binding on you, so it is not too late to change your mind at this stage. Perhaps you have decided to take out an interest-only mortgage instead of repayment or vice versa. It is most certainly best to decide that now than after you have completed the purchase. There may be special conditions that are specific to your offer. One example is a requirement for you to pay off your credit card before the mortgage can be completed.
You should also have received the report from the survey you requested. Read this carefully as it may include details about repairs or structural changes that are either required or highly recommended. Serious issues with the property could allow you to re-negotiate with the seller, or even mean your mortgage application is rejected.
9 – Exchange contracts
This part of the process is extremely important because exchanging contracts is legally binding. Once the contracts have been exchanged, you must buy the property.
Therefore, it is important that you make sure you are happy with everything. The below checks can help you ensure you are ready to exchange contracts:
During the exchange of contracts, you will be required to pay an exchange deposit. This is normally 10% of the purchase price but can be negotiated down if you are taking out a 95% mortgage. If you are putting down more than 10% equity, you will pay the remainder of your deposit when you complete.
Exchanging contracts usually takes place over the phone, with both your solicitor and the seller’s solicitor reading out their contracts to ensure they are exactly the same. The contracts will then be sent to one another so that they are ‘exchanged’.
10 – Complete purchase and move in!
The completion date is typically around 1 week after the exchange of contracts but can be up to 2 or 3 months after. Setting a date can be complicated if there is a large chain because all members of the chain will need to agree on the same completion date.
On this day, you must wait to hear from your solicitor that the transactions are complete and that you can collect your keys. It can become quite stressful if there are many transactions in a long chain and there is always a possibility that your transaction doesn’t complete by the end of the day, so ensure you have a plan in case you have potentially moved out of or sold your house and cannot enter your new home on the same day.
Hopefully, if all goes smoothly, you will receive the phone call you are waiting for and can then collect the keys and begin moving your belongings.
Congratulations on your new home!
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Consilium Asset Management are Independent Financial Advisors (IFA) based in Bristol and are authorised and regulated by the Financial Conduct Authority. More information can be found on the Financial Services Register under Number 469507. Registered Office: Vayre House, Hatters Lane, Chipping Sodbury, Bristol, BS37 6AA.