Mortgages

Mortgage Process

It's often worth obtaining a Decision in Principle, even before you find a property that you want to buy.

Decision in Principle

A Decision in Principle is a statement from a lender showing how much it is willing to lend you in principle. When buying a house, it is advantageous to obtain a Decision in Principle. A Decision in Principle demonstrates to a potential seller that you are a serious buyer and that a lender has agreed, in principle, to lend you sufficient money to purchase the property.






It is worth noting that while a Decision in Principle is a good indicator of whether a leader will give you the money, it is not a guarantee. Whether it firmly agrees to lend you the money is dependant on the exact details of the property, the outcome of credit checks, and the accuracy of the information you have supplied about yourself. Decisions in Principle are usually only valid for a limited amount of time. Typically, after three months, a Decision in Principle will expire, so make sure you know how long yours will remain valid.

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Making a formal mortgage application:

Once you have found the property that you want to buy and selected the mortgage you want, we can make a formal mortgage application. It's essential you check through the application carefully before you sign it because you are responsible for the accuracy of the information you provide. At this point, lenders will want to know your circumstances, and, if applicable, those of the joint borrower. Lenders will need to know exactly how much you want to borrow, and possibly, from where the rest of the money (your deposit) is coming. To verify your details, lenders will often need the following:

  • • National Insurance number
  • • Bank details
  • • Payslips (usually the last three months)
  • • Proof of address such as a recent utilities bill or bank statement

When we have submitted your application form, 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.

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 lender involved and your circumstances but might typically be around four or five items like the ones listed:

  • • Existing housing details (such as a landlord's reference)
  • • Personal pension details
  • • Loan or HP agreements
  • • Mortgage statement
  • • Life insurance policy documents
  • • Audited accounts or Inland Revenue statements of account for the previous two or three years(if you are self-employed)
  • • P60

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, you will need to request this yourself. 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. With some mortgages you will also be charged a fee at this point. The fee will depend on the lender and the deal and in some cases may be non-refundable.