Before you set your heart on your dream home we would recommend obtaining a Decision in Principle. (DIP)
A DIP is a statement from a lender advising you how much they would be willing to lend you in principle should you wish for us to process a mortgage for you with them. It’s worth noting that having a DIP before you start viewing properties put you in an advanced position, as you already know the lender is happy to give you a mortgage for the required amount. Thus, saving any heartache should you find a property that is a little out of reach.
Remember a DIP is not a guarantee that the lender will give you the money for the property you want to buy, this will depend on a lot of things, like the exact details of the property i.e. construction and the accuracy of the information you have provided about yourself and the outcome of credit checks.
Making a mortgage application:
When you have found the property you wish to proceed on we can make a formal mortgage application. You are responsible for the accuracy of the information you supply to us for this purpose so make sure everything is true and to the best of your knowledge, not doing so will result in delays to your application. At this point the lender will want to know about your current circumstances, like employment details, Income, where your deposit is coming from. They’ll want to know about the property your purchasing, size construction, type of property.
As well as completing the application you will need to supply us with a variety of documents to back up the facts you are giving us. In the case of a joint application both parties will need to supply these documents. What is needed will depend on which lender we think is most suitable for your needs, and the document s will vary if you are employed or self-employed. Some of these are listed below:
- Photo identity such as Driving licence or Passport
- Proof of address (utilities or other bills)
- Pays Slips (usually the last 3 months)
- SA302 forms, Tax calculations and overviews
- National Insurance number
- Mortgages statements (If re-mortgaging or buying on)
- Details of loans or credit cards
- Credit reports (Experian, Equifax, Noddle or such like)
Once we have submitted your application the lender will arrange a survey to be carried out by one of their panel for mortgage purposes, there can be a charge for this, but some lenders do offer this for free. It’s worth remembering this survey is for mortgage lending only, for them to establish value and if the property is worth lending on. You may wish to pay for a more detailed survey should you require it.
Receiving a mortgage offer:
If your chosen mortgage application is successful your lender will issue you a mortgage offer, this offer will also include the Key Facts illustration, giving you the terms and features of the mortgage including the interest rate and the number years the mortgage will run for (Mortgage Term).
It will also state the conditions of the mortgage offer, it’s very important that you read these conditions, because should you except the mortgage and proceed the terms of the offer will be binding. The lender can, however, withdraw the offer at any time.
If you wish to go ahead you will need to accept the mortgage offer, in-between or after this point you may have instructed a solicitor to act for you on the purchase of the property you wish to buy, a large amount of work will be carried out by them including local searches and raising enquires to the seller’s solicitor.
They will issue you with a document known as a mortgage deed, this is the legal contract between you and the lender, your solicitor should explain the conditions of the deed to you, and both you and the lender will need to sign this deed.
Before completion can take place you solicitor will send a report to your lender known as the ‘report of tile’ which tells the lender the results of the searches carried out and gives details about the legal title to the land, your lender will check everything is in order. Your solicitor will request your deposit moneys prior to your completion date and on the day of completion, they will request the lender transfer the money you are borrowing to their account ready to pass on to the seller’s solicitor. At this point, your mortgage is now active and payments will need to start being made to the lender, this is usually on a pre-selected date of your choosing each month. Remember YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE.
*The FCA does not regulate solicitors and we act as introducers for it.
If you would like us to begin the Process we’ll need some basic information from you before our first meeting please download or print our mortgage fact find here and then call one of our advisers to arrange a visit. We’re more than happy to come to your home at a convenient time for you or if you’d prefer you can visit our office.
Alternatively, you may wish to conduct business via telephone, Skype and e-mail whichever is more suited to you.
Important: The information contained in this web site is an overview only, and not to be considered financial advice.