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Mortgage Application Process
Agreement in principle - obtain a mortgage agreement in principle certificate.
Get Insurance Quotes -Be provided with competitive quotes for all your insurance needs
Instruct a Solicitor - let us provide a competitive quotation for you for the Purchase, Sale or Remortgage of your home.
Progress and Completion - receive help to ensure the progress of your application through to issue of the mortgage offer is without problem
Compare the best mortages - Step 1
Agreement in Principle - Step 2
Once you have decided on the mortgage you require , it's often worth obtaining a mortgage agreement in principle certificate. This is a certificate from a lender showing how much it is willing to lend you in principle. Mortgage certificates are often called different things, such as a mortgage promise or an agreement in principle but they mean the same thing.
The advantage of obtaining a mortgage certificate is that it demonstrates to a seller that you are a serious buyer and that a lender has agreed in principle to lend you enough money to purchase the property. It is worth noting that a mortgage certificate is not a guarantee that the lender will give you the money for the property you want to buy. Whether it agrees firmly to lend you the money will depend on the exact details of the property, the accuracy of the information you have supplied about yourself, and the outcome of credit checks.
To apply for a mortgage certificate, you will need to complete a form and may need to give details of your employment, income and financial commitments. The lender might want to run credit checks on you at this stage to make sure you are a reliable person to lend money to. The lender can then use this information to tell you how much it's prepared to lend you in principle.
Although you may not know exactly which mortgage you want at this stage, it helps to get a mortgage certificate from the lender you are likely to borrow from. This will speed up the process later when you make a formal application because it will already have some of your information. Mortgage certificates are usually only valid for a limited amount of time, typically about three months.
If you want to keep your options open, there's no reason why you shouldn't obtain a mortgage certificate from more than one lender. However, unless you anticipate problems with a lender agreeing to the amount you want to borrow, there's no real reason to do this, and if each lender you go to carries out a credit check, it could harm your credit rating
If your agreement in principle or subsequent mortgage is unsuccessful, we will ascertain with the lender the reasons for this. There are two main reasons why you can be turned down for a mortgage, and they are because of difficulties with your circumstances (such as your credit history, income or age) or because of problems with the property.
In these instances, we will be able to advise you of other lenders as they may apply different criteria. However, you may be obliged to tell them that you've had a mortgage application refused before.
If the problem is related to your credit history, you can ask the lender to tell you which credit reference agency it used and contact it to obtain a copy of your record. There is a charge of £2 for this by post or around £9 online. If it transpires that something on your credit record is incorrect, you can ask for it to be corrected.
Complete a mortgage application - Step 3
When you have found a property that you want to buy, and have decided on the mortgage you want, a formal mortgage application can be made. To do this your mortgage adviser will need to gather the application details from you so that the lenders application can be completed.
When completing your application, your adviser will always be on hand if you have any problems. At this point the lender will want to know about your circumstances, and, if applicable, those of the joint borrower, in more detail. The lender will need to know exactly how much you want to borrow and may want to know where the rest of the money (your deposit) is coming from. It will also want to know details about the property you are purchasing, such as how much it costs and what type of property it is. It is important to be as open and honest as possible when completing this form as this will help to avoid delays with your application later on.
As well as completing the application form, you will need to supply a variety of documentation to back it up. If you are making a joint application, you will often have to supply documentation for both of you. Exactly what, will depend on the type of mortgage applied for and the lender involved. In the case of a self certification mortgage, the documents required can be as little as proof of your ID and proof of residence
Typically when borrowing a higher amount ie. 90% of the property value, the lender will require the following:
- pay slips (often for the last three months)
- audited accounts or Inland Revenue statements of account going back two or three years (if you are self-employed)
- bank details for the Direct Debit mandate
- proof of identity such as a passport
- proof of address such as a recent utilities bill or bank statement
- proof of the last 12 months mortgage payments / tenancy reference Not supplying the correct documentary evidence can slow down the application procedure.
Your adviser will let you know which documents are likely to be required so that you can start collecting them.
When your application form has been submitted, the lender will arrange for a qualified valuer to inspect the property. You normally have to pay for this valuation although some mortgage deals include a free valuation or offer to refund the valuation fee after the mortgage is finalised.
The mortgage valuation is simply to allow the lender to establish the value of the property and help it decide whether it is willing to lend you the money. If you require a more detailed survey of the property (which is advisable) such as a homebuyer's report or a buildings survey we will advise you how much this costs. It's advisable to get the same valuer to carry out the mortgage valuation and any more detailed survey you require as this will save time and money.
Applying for a mortgage in Scotland is largely the same as in the rest of the UK, but with one main difference. Because of the way the house-buying process works in Scotland, you have to be sure, before you make an offer on a property, that your lender is willing to advance you enough money to pay the purchase price.
This is because, in Scotland, when an offer on a property is accepted and all the terms of that offer are agreed to, a legally binding contract is created, tying both the buyer and the seller to the sale. If you don't complete the transaction for any reason you could be liable for any losses that the seller suffers.
This means it's very important to have your finances sorted from the beginning, and to be very clear about the amount of money you can borrow and that your lender is willing to advance you a loan against the property that you're interested in. All property transactions are conducted through a solicitor in Scotland, so talk to yours if there's anything that you are unclear about.
Insurance Quotes - Step 4
For an instant insurance quote, simply select the insurance product you require below and you will be provided with a competitive quote from some of the UK's biggest insurers.
Most people require life assurance at some stage during their life, to protect family or dependants and ensure there are funds available to repay the mortgage or any outstanding loans. Quotes are provided from top insurers such as Aviva ( Norwich Union ), L&G, Friends Provident, Scottish Provident, Scottish Widows and others.
Mortgage Payment Protection Insurance
Mortgage Protection Insurance otherwise known as ASU or Accident Sickness & Unemployment insurance is not compulsory, although it can be a condition of some loans. But anyone with a mortgage should consider taking it out. For people who might have stretched themselves financially with their mortgage it is probably even more important to be covered in the event of unforeseen unemployment, accident or sickness. Good policies will cover any bills related to your mortgage - including interest and repayments. A good Mortgage Payment Protection Insurance policy will start to pay one month after you are out of work either through Accident Sickness or Unemployment, and
in a number of cases even offer the first three months free.
Mortgage Payment Protection Insurance Quote
Instruct a Solicitor - Step 5
UK Financial Solutions Online Conveyancing is the easiest way to instruct a solicitor when buying, selling, or remortgaging your home.
All work is carried out on a postal basis by established, reputable firms of solicitors who are all regulated by the Law Society and who are all covered by a minimum of £1,000,000 indemnity insurance.
We offer a comprehensive online conveyancing service whether you are buying, selling or remortgaging your home. These are just some of the benefits of using us:
We'll help you find a conveyancing solicitor to start working for you at a guaranteed fixed price with no hidden extras on a no completion - no fee basis.
You can follow the progress of your conveyancing on-line 24 hours a day and you'll be kept updated throughout both by email and by text message updates to your mobile phone.
Why not get a quote for our service, and see how competitive our service is?
Progress and Completion - Step 6
If your mortgage application is successful your lender will issue a mortgage offer, also known as an offer of advance. This offer will include an updated Key Facts Illustration, laying out the terms and features of the mortgage including the interest rate and the number of years the mortgage will run for. It is important that you check these details to ensure that the offer matches the deal you applied for.
The mortgage offer will also state the conditions on which it is offering you this mortgage. It is very important that you read and understand these conditions, because if you decide to go ahead and finalise the mortgage, the terms of this offer will be binding.
At this point, however, you are not tied to the mortgage and can pull out and go to another lender. If you do decide to pull out, you may lose any non-refundable fees such as the valuation costs and booking fees. A mortgage offer is generally valid for only a limited amount of time (usually between three and six months), however, the lender can withdraw the offer at any time.
Please note that it is possible for a mortgage product such as a fixed rate to expire, even though the mortgage offer remains valid. You should check to see if your mortgage product has a completion deadline. If a mortgage product does expire it can always be replaced with another product from the lenders range available at that time.
If you want to go ahead with your mortgage, you will need to accept the mortgage offer. From this point a large amount of the work will be carried out by your solicitor or licensed conveyancer.
There are now just a couple of things that will happen in relation to your mortgage before it is all finalised. You will receive a document known as a mortgage deed from your solicitor or licensed conveyancer. This is the legal contract between you and your lender. Your solicitor should explain the conditions of the mortgage deed to you and both you and the lender will need to sign it.
Before completion, your solicitor or conveyancer will send a report to your lender known as the 'report on title' which tells the lender the results of searches carried out on the property and gives details about the legal title to the land. The lender then checks that everything in this report is in order. Following this, your solicitor/conveyancer will ask your lender to transfer the money you are borrowing to your solicitor/conveyancer. On the day of completion the outstanding purchase money is transferred to the seller's solicitor/conveyancer and you receive the keys to the property.
Following completion, your solicitor/conveyancer will contact your lender to confirm that completion has taken place.
At some point after this you will usually receive a letter from your lender confirming that the mortgage is active and the amount that your monthly payments will be. Depending on when in the month completion occurred, your first payment might be slightly more than your standard monthly payment. For example, if you completed in the middle of the month, the first payment you make may need to cover the remaining half of the month in which you completed and the following month. This will all depend on when in the month you choose to make your payments and how your lender is charging you. Make sure you check what your first payment will be so that you can plan to have enough money available.
Once your mortgage is in place, you will receive regular statements from your lender. These statements will arrive at least once a year, although with some mortgages you will get them more frequently.
The information on these statements varies depending on the lender although certain information must be shown. This includes details of the payments you have made throughout the year, the interest rate and the outstanding balance and duration of the mortgage.
You should check these statements carefully to make sure that your lender is charging you the correct interest rate. You should also check the other details of the mortgage, such as the repayment type and the length of the mortgage and ask your lender about anything you don't understand.