Buying a home can be a daunting process, particularly if it’s your first property. However, it’s one that should be enjoyed as much as possible. The key to a successful mortgage process comes down to a few things, but mostly, understanding each stage and the best order in which to do things, will almost always stand you in good stead.
A lot of people don’t know where to start, do you secure your mortgage first or find your house first? Well, the complicated truth is that most people can’t buy a home without a mortgage, but you can’t get a mortgage without an idea of the home you want to buy.
What Is The Mortgage Process?
There are no rules to follow when it comes to the mortgage process and the way in which you go about obtaining a mortgage is ultimately your decision. However, in order to give yourself the best chance possible, you need to take the necessary steps. There is no definitive process, but as a mortgage broker, we have compiled the steps we think you need to take in order to optimise your likelihood of success.
Understand The Different Types Of Mortgage
Knowing the options you have is always a good place to start and there are many different types of mortgage to consider. Unfortunately, it’s not just a case of picking one that is most suitable out of a number of options because there are some that will not be applicable to your circumstances.
The type of house you are looking for, the job you have and your credit history are a few of the factors that can influence the type of mortgage you are eligible for.
The most common mortgage type you are likely to consider is a standard residential mortgage. As the name suggests, it’s the mortgage type most people use when they are buying a home to live in permanently. If you are buying your first home, you may consider a first-time buyer mortgage, which is tailored to make buying your first home a little more accessible. The best way to access the different types of mortgage that are available to you is through a broker because they can view the wider market and find the most suitable lender, so you don’t have to.
Mortgage Agreement in Principle (AIP)
Once you have a better understanding of the market and the options that are available to you, it’s a good idea to secure an Agreement in Principle (AIP) as this will put you on the front foot if you happen to find a house you like. An agreement in principle is essentially a lender saying they would lend to you in principle, based on a few bits of information you have provided.
Sellers often like the idea of an AIP as it shows them that you are ready to buy. Quite often in house buying, you will come up against competing offers and having an AIP potentially gives you the upper hand.
Your AIP will also give you an indication of your budget, so you can narrow your search to ensure you won’t be looking at houses that are worlds away from your budget. You usually don’t have to wait too long for an AIP and assessment usually contains a credit check and a look at your repayment history. So as long as that is all in order, you should be good to go.
Find Your Property
Now comes the fun (but sometimes overwhelming) part. Once you have a good level of understanding of the mortgage market and an AIP under your belt, you are probably likely to start looking for your new home. The process of endless house viewings can often be quite overwhelming and a little stressful, which is why it is important you take the steps we have mentioned previously to ensure you avoid as much stress as possible. Being aware of your options and your budget should mean you keep any disappointment at arm’s length.
Begin Your Mortgage Application
Once you have found the right property, it’s time to put in an offer. If your offer is accepted, you will then go back to the lender who issued you an AIP and begin the process of turning this into a secure mortgage agreement. Even though the AIP has given you a headstart, there are still some further checks that will need to be made so it doesn’t necessarily mean you are 100% guaranteed to get your full mortgage application approved.
Survey Of The Property
As part of the mortgage application process, your lender will need to value the property you have placed an offer on, to check that the mortgage amount they have proposed is suitable.
Once the lender is happy with the value of the property and all other factors, they will give you an offer. It can be easy to get carried away and excited with a mortgage offer, so it’s important you go through the contract and understand every aspect – after all, your mortgage is something that will be with you for a large proportion of your life.
Once you have accepted the offer, you are ready to start the final stage of buying a home. This involves paying deposits to the conveyancer and getting ready to exchange contracts.
Are You Buying and Selling A House At The Same Time?
When buying a new home, it’s common for people to be selling their old one too. If this is the case, your deposit for the new house will be paid for by the old one and it will be in the hands of the conveyancer’s to exchange the deposits and contracts are then ready to be exchanged.
Get In Touch
The mortgage process is one that you will need to take advice on. There is a lot to consider and doing so without the help of an expert can be extremely risky – particularly when there is a lot of money concerned. At Maple Leaf Financial, our advisors are well equipped with a vast amount of financial knowledge they are ready to impart, so you can be sure you have access to the right mortgage options for you. If this sounds like something of interest, then give us a call today.