Man signing documents

Step by Step Guide to the Mortgage Process

Whether you are buying your first or seventh home, the process can be an extremely stressful period, especially for the first-time buyer. With the famous quote, ‘knowledge is power’, knowing what to expect can help prepare you for the journey you are about to undertake.

The process can be broken down to seven simple steps in our guide:

 

  1. Save up for a deposit

Saving for a deposit can take some time, meaning the sooner you start, the better. A deposit is usually 10% of the price of the property, however, bear in mind that the larger the deposit saved, means you can apply for mortgage deals with lower interest rates. If you’re eager to get started sooner, or need a helping hand with a deposit, there are alternatives such as help from parents, shared ownership or a help to buy equity loan.

  1. Send an enquiry to a mortgage advisor

Reach out to a mortgage advisor at HLC with your enquiry and they will arrange a free consultation with you, which can be conducted over the phone or in person. During the consultation, you will discuss what your plans, goals and affordability are, and at the end of the conversation you will understand the maximum loan estimates and costings (monthly mortgage payments, expected interest rates, etc.) for your mortgage. Your HLC mortgage advisor will conduct their research with access to whole of market mortgage options to identify the most suitable lender for your requirements. Your options will be presented for you to agree to proceed with.

  1. Obtain an agreement in principle

Your mortgage advisor will collect some required documents from you to build your profile and present your case. If successful, you will receive an ‘Agreement in Principle’, which is a non-legally binding certificate that will show you the loan sum agreed upon.

  1. Search for your perfect property and make an offer

This is where the fun part starts, you can begin your search to find a property and undertake viewings. Once you have found the perfect one within your budget, you may make an offer. You do have the option to consult your mortgage advisor on how much you should offer. Estate agents and vendors often require to see your ‘Agreement in Principle’ as proof of your affordability.

  1. Apply for a mortgage

Once the vendor agrees to your offer, your mortgage advisor will ask for information such as agreed purchase price, address of property, solicitor details and estate agent details. The mortgage advisor will use this information, in addition to the previous documentation obtained, to submit a full mortgage application. Once your mortgage application has been approved, an offer letter will be posted to you, your adviser and solicitor. The offer letter is legally binding to the lender and is usually valid for 3-6 months, meaning the mortgage product selected will be secured for that period, even if interest rates were to rise.

  1. Exchange contracts

You will need to hire a solicitor or conveyancer, whom will handle the legal process that takes place after your offer is accepted. This includes carrying out searches, drawing up and checking contracts, dealing with the Land Registry and paying any stamp duty. You will then decide if you would like a property survey conducted, as this is optional. Property surveys help to assess the condition of the building and detect structural problems, which allows you to be aware of any issues before buying and could also enable you to either negotiate the purchase price down, or ask the seller to fix any problems. Before you exchange contracts, you need to agree to a completion date with the vendor. Your solicitor will complete the legal process, negotiate any final elements that have not yet been agreed (for example buying the vendor’s fridge) and will exchange contracts with the vendor’s solicitor.

  1. Move in!

Once you reach the completion date and the monies have all gone through via your solicitor, you have made it! You officially own the property and can move in.