Buying a home is a significant financial investment, and it can be quite daunting, particularly for first-time buyers. Before you even begin house-hunting, you may ask the question ‘What are the stages of a mortgage application?’ It’s important to be realistic about what you can afford, so the process of a mortgage application starts before you even find the property you want. Here are the key stages of a mortgage application.
Whether or not you are approved for certain mortgage types will be affected by your credit rating. A score of ‘Good’ or higher is helpful, and a score of ‘Excellent’ is ideal. If your credit rating is poor, you should work on improving it before making an application for a mortgage.
Seeking Mortgage Advice
There are lots of options at your disposal to seek mortgage advice, and you should take advantage of this. Having the advice of a professional to help make a plan and do what needs to be done can be a tremendous boost for a potential mortgage application, so make use of whatever advice is available.
Choosing The Right Lender & Mortgage Type
You can obtain a mortgage through a mortgage broker, an Independent Financial Adviser (IFA) or directly from certain lenders. You should do your research and choose carefully, and once you find the product and lender you like, agree to it as a mortgage ‘in principle’. This tells you how much money the lender will offer and what the interest rate will be, and it may involve a product fee.
Submitting The Mortgage Application
Once you make an offer on a property, based on your mortgage agreement, you should arrange a conveyancer and surveyor. This will enable you to obtain a full valuation survey to make sure the property is worth the price you’ve offered on before the lender approves the mortgage. It is recommended that you also pay for a comprehensive property survey at this point, in case there are any issues with the property.
Once the valuation survey is complete, you can finalise the offer with your conveyancer and submit the mortgage application. This can be an anxious time, but your application should be accepted if there have been no unexpected changes since the agreement. Seek lender feedback on the application to learn if there is anything else you need to do.
Final Steps
If the mortgage application is successful and you are ready to proceed, the final step is to exchange contracts with the seller and complete the purchase. You will then have to keep up with your previously agreed monthly mortgage payments for the predetermined time period. The process is notoriously stressful, and there are various things that can go wrong during the process but keep pushing ahead through the stages of getting a mortgage and communicating with your solicitor and your lender. You will come out the other side of it.
At Bowsers, we’re here to help. If you need advice on your mortgage offer, give us a call today.