When we started talking about buying a house, everyone told us that getting a mortgage would be the really difficult, painful bit. But in our experience that wasn’t true.
Whether you’re looking on your own, or seeking guidance from a mortgage advisor, there are plenty of places online to seek out the right mortgage for you. We opted to do our own research online to find a lender we trusted with rates to suit us and work from there.
The Decision in Principle
You should start looking for your mortgage provider while you’re viewing houses as you’ll need your Decision in Principle in order to have an offer accepted on a house. Your DIP is a certificate that you’ll be able to provide to your estate agent that in theory, a lender is happy to offer you a mortgage on the price of the house you’re offering on. Your DIP can be done online, or in a branch of the lender you’re hoping to get a mortgage from. You’ll need to be able to give them information on where you live, your job, your income, and your outgoings, although the lender won’t check all of this yet. When submitting your DIP application the bank will check your credit which will leave a footprint on your file, so you should avoid applying for multiple DIP’s in a short space of time. Your DIP will be for the exact value of the house you’re offering on, and will last for three months. If you’re
unsuccessful with your first offer then don’t worry, use the same DIP for future houses you may be interested in and if your offer is accepted you can then get it amended.
The Mortgage Appointment
Once you’ve had an offer accepted on a house, you’ll then need to apply for your actual mortgage. This usually happens in branch and takes around three hours. This is when you’ll need to supply all of the paper work, so in the lead up to looking for a house try to make your incomings and outgoings as clear, and as organised as possible. If you’re employed, then the lender will ask to see three months bank statements, three wage slips, evidence of bonuses and overtime, plus gift certificates from parents if you’ve been given any cash to help with the mortgage. At this point, you’ll go through details on all of your outgoings, and what you’ll be spending your cash of once you have the mortgage so that the lender can ensure you’ll be able to cover the repayments. We were worried that the fact we just want to spend our money on loads of holidays & trainers should be kept a secret, but the mortgage advisor will work with you to look at how you can keep doing this in the future. This might be through a longer mortgage repayment term, or a fixed rate for a long period of time so you know exactly what the repayments will be. At the end f the appointment the lender will advise you of next steps, and then we wait.
The Mortgage Valuation
A few days after your mortgage appointment the lender will send someone around to value the house you’re requesting the mortgage on. This is not the same as a survey. The lenders valuation is a simple check of the house to ensure it’s worth the cash they’re lending to you. This can be nerve-wracking while you wait. The survey isn’t in depth, and as long as the surveyor is happy that the house is around the same value then you’ll progress to the next stage of the mortgage process.
Behind the scenes, the lender will be going through all of your paperwork to ensure everything is in order. If you’ve lived at multiple addresses over the last few years, in rented accommodation where you may not have moved driving licences and other important documents, this may be where there is a slight hold up. If you can, try to show the same address across all documents, although if you can’t then it’s not the end of the world, as it’s not uncommon that an applicant will have multiple addresses on wage slips, ID, and bank statements. As long as you can prove who you are then there shouldn’t be a problem.
Once the lender has all of your details and you’ve proved that you are who you say you are, then it’s just a waiting game. The mortgage application can take around five weeks, but we had ours in less than two. This can depend entirely on the documents you’re providing so the more efficiently you can get everything the the lender then the more likely you are to be able to get a mortgage quickly. As with the DIP, the mortgage is specifically created for a certain house, and so if this falls through as they often do, then you’ll need a full new mortgage.
The nice bit – Cashback!
Bet that’s something you didn’t think you’d hear about getting a mortgage, a nice bit! Look out for offers from providers where they’ll give you cash upon completion, this is really helpful when you’re moving into a new home. You can get cash rewards for a number of different things including being a first time buyer, and being a reward customer of the bank you’re getting your mortgage from. Some lenders also offer a bonus if you have a Help-to-Buy ISA, on top of the government reward you’ll be getting. Just be aware, if you use a mortgage provider for your mortgage then you may not be able to get these rewards through them.