Most people Kevin speaks to have limited or no knowledge of what’s involved in getting a mortgage, and the steps an adviser will take to ensure everything runs smoothly.
Hello and welcome to this month’s column, where I talk all things mortgages.
Hopefully everyone managed to get through what feels like the longest month of the year, and you may now be looking to buy a new home or need to review your existing mortgage options in the coming months.
Most people we speak to have limited or no knowledge of what’s involved in getting a mortgage, and the steps an adviser will take to ensure everything runs smoothly.
Both factors are especially important, as ultimately, they result in your mortgage being approved and completed when you want it to.
I’ve put together a step-by-step guide on what to expect if you use a mortgage adviser to secure you the right deal. The process may differ slightly from adviser to adviser, but essentially, the end-to-end journey is similar in most cases.
The first step is to provide the broker firm with basic information about you, including what you’re looking to achieve (whether you’re a first time buyer, a homemover, or remortgaging), and your personal details (including your employment status, income, and current buying position).
You would then be booked in for appointment with a mortgage adviser, or transferred directly to speak with them. Face-to-face and telephone appointments tend to be the most common.
A mortgage adviser will then conduct an initial fact find. They’ll confirm and gather all the information required to submit a Decision In Principle (DIP), while also discussing your mortgage requirements in more detail.
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It’s important to have a note of balances and payments to any credit commitments, such as credit cards, loans, and car finance. This will help determine your affordability.
The adviser then completes their research, matching your affordability against different lender criteria.
A DIP is submitted to the relevant lender(s) that the adviser identifies as the most suitable option(s) available.
The lender performs a soft credit check which determines both your ability to borrow and the borrowing amount available. It’s important to note that soft credit checks don’t impact your credit rating.
The lender provides a provisional decision on the mortgage application, stating the amount they’re willing to lend in principle subject to a full application.
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If you’re buying a property, documents are generally requested once an offer has been accepted. For remortgage cases, documents are requested once a DIP is agreed and usually within six months of the current deal expiring.
The supporting documents required for the full mortgage application are requested (for example, proof of income, bank statements, and proof of deposit). Your adviser will confirm what is specifically required as part of your application.
Once all documents are received, they’re checked for things such as income and outgoings, and that the personal information matches the details previously obtained.
If all documents received are acceptable, an adviser will then book in a presentation (application) call, or a face-to-face meeting.
An adviser will finalise a detailed fact find and confirm their mortgage recommendation, including the interest rate and term for the mortgage.
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The full mortgage application is submitted to the lender, and all supporting documents that they request will be uploaded.
The lender’s underwriting team will review the full application and all supporting documents to make a final decision.
They will also arrange a valuation of the property to assess its value. This would be done online or using a transcript of the Home Report. A new physical valuation can be completed if a Home Report isn’t available or can’t be used.
Your adviser will monitor the progress of the application to ensure any issues are addressed promptly, as well as maintaining communication with you on the progress of the case at regular intervals.
If fully approved, the lender will issue a formal ‘mortgage offer’ to you and your adviser.
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At this point, your adviser usually books in and completes a protection review with you. This is where they’ll discuss protection options such as life and home insurance, tailoring their recommendations specifically to your needs.
This is the point of the journey where you take ownership of the property, and your new mortgage deal starts. Once all conditions have been met from the lending and legal perspectives, the mortgage funds are released, and the transaction is completed.
Hopefully this has provided you with some insight into what is involved during the mortgage process. The key thing to remember is that a mortgage adviser will be there for you every step of the way, making the experience as stress-free as possible for you. Thanks for reading, and see you all next month.
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