How does the mortgage application process work?

Below we have put together a mortgage application process timeline. This is to help you prepare for your application, ensuring you’re journey is as smooth as possible.

Step 1: Make Contact

The entire mortgage process begins with that initial point of contact. This can sometimes be the most frightening of all the steps.

For many, this is uncharted ground, and figuring out where to begin might be difficult. If you’re applying yourself, you will need to directly contact your chosen lender. However, if you’ve decided to use a broker then you’ll need to contact them.

You’ve already made the first step by reading this, so why not contact one of our helpful advisers? From here, we can set up a free no-obligation consultation to discuss your needs.

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Step 2: Pre-qualification

You’ve taken the first step and contacted a broker, which is fantastic. So, what comes next?

One of our expert consultants will examine your case in detail, allowing them to understand your needs. From here they will advise you on any extra information / documentation needed to do a complete market search.

We’ll do a fact-finding exercise with you and talk about particular parts of your situation. Things like:

• Income and spending. This will allow the consultant to determine your budget and potential affordability for your required mortgage amount. It will also give them an idea of what monthly payments you could afford.
• Amount of deposit or equity. Your adviser will outline how this may impact which lenders are accessible to you, as well as what may be available to you. The larger the deposit or equity, the more possibilities and maybe better ones are available.
• Your credit history. By determining your credit history, the consultant will be able to determine your chances of success. This also helps them narrow down which lenders may be available to you.
• What you want to do. Obviously, we’ll need to know what you want to do, such as whether you want to buy or remortgage. Or if you’re a first-time buyer or interested in Buy-to-Let.

Step 3: Suggestions

Once your adviser has analysed your situation and browsed the market, they will give you advice based on their findings. This will contain information on rates as well as any associated fees that may apply. Everything you need to know should be covered at this point.

If you’re unable to proceed immediately, for example, because you’ve not yet discovered a home to buy, the actual mortgage arrangements and lenders, will be addressed in more general terms.

This is because the market changes, and whatever mortgage lender and scheme is appropriate for you may change in the meantime. From this point you will have a solid understanding of what to expect when the time arrives.

Step 4: In Principle Agreement

Your adviser can help you obtain an Agreement in Principle (AIP). This is also known as a Decision in Principle or Mortgage in Principle and is the first step to getting a mortgage. It’s a simple way of finding out how much money you need to borrow in order to buy a property or remortgage.

An Agreement in Principle is obligation free, meaning you’re not tied to a particular type of mortgage deal or lender. However, it’s worth noting that your AIP does not guarantee a lender will approve your application.

Step 5: Applying for a mortgage

When you’re ready, your adviser will prepare to send your mortgage application to your preferred lender.

At this point, the mortgage provider will review any supporting paperwork that has been requested. Your adviser will inform you of the documents that the lender will demand, so that you may prepare them in advance.

Typically, the lender will supply your adviser with a “shopping list” of the preliminary papers required. Following a thorough review of the documents already submitted, your lender may also require more documents in specific instances.

A property survey or appraisal will also be required as part of the procedure. This typically involves a physical assessment of the property being mortgaged. Although it can be a drive-by inspection or an online appraisal based on the lender’s data.

Fill out our quick and easy Mortgage Affordability calculator below. We only require a few details to see how much you may be able to borrow.

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Step 6: Make a mortgage offer

The official mortgage offer will be given whenever the lender is satisfied that the property provides adequate security and when they’re pleased with the paperwork given.

This certifies their readiness to lend and outlines the terms and circumstances of the mortgage requested. A copy will be emailed to you and your mortgage adviser, as well as one directly to your acting solicitor.

Once the offer is given, the lender confirms in writing that they are willing to supply the mortgage. This is subject to the solicitor’s confirmation that all legal concerns are suitable. An offer will normally last between three to six months. Although, it may take longer on occasion, such as when a new construction product is chosen.

Step 7: Make an offer / pre-completion

Now that your mortgage has been officially approved, your adviser will examine your potential insurance needs. They can then make any suggestions and arrangements on your behalf. Some types of insurance to consider at this stage are:

• Property insurance. For any freehold property, you will almost certainly be responsible for the property insurance. The issue with leasehold is different, and your solicitor will investigate this on your behalf. Your mortgage provider will make it a condition of the loan that you have appropriate cover in place for the duration of the loan.
• Contents insurance protects your valuables within your house and is generally purchased in conjunction with property insurance. It is sometimes known as buildings and contents insurance.
• Life assurance, a type of insurance policy, provides a lump sum payment in the event the policyholder passes away. This type of policy is often more expensive than life insurance, as it has higher premiums due to the fact it offers a guaranteed payout.
• Income protection insurance is meant to pay you a certain sum on a monthly basis if you are unable to work. Or in some cases, in the event of redundancy.

Step 8: Finish

When your solicitor has completed all essential legal procedures, and all parties are prepared, you may seek to schedule a completion date.

After that, the solicitor will make the required preparations to request the loan money. Typically, a lender requires 5 working days between the request for cash and the day of delivery. However, this might be lowered in specific cases.

If you’re remortgaging, completion will be the day your loan is transferred from your present lender to the new one. To put it simply, your former loan is repaid, and the new loan begins. Any additional funds you raise will now be given to you. If you are buying the home, completion will signal that you are now the legal owner of the property.

The transfer of money can happen at any point during the day. Once money has been transferred to the existing owner, your solicitor will notify you and you’ll be given the keys.

Step 9: Following completion

As part of our offer, we provide a personal mortgage review service.

This means that as you approach the end of your agreement, one of our advisors will contact you to ensure your mortgage is appropriately set up.

Our advisers will support you throughout all the stages of your mortgage application. Contact us today to speak with one of our advisers and get started on your journey.

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