To assist first time buyers in York, we have outlined the 10 steps involved in the mortgage process. This comprehensive guide is designed to provide you with the necessary information and preparation for your upcoming mortgage journey.
Here are the 10 steps involved in the process of purchasing a home and obtaining a mortgage:
As a first time buyer in York, you have taken a major step in purchasing a home and securing a mortgage. This can be a daunting experience, especially if you are unfamiliar with the process. That’s where we come in. As a dedicated mortgage broker in York, our goal is to take the stress out of the process and help you secure a favorable mortgage deal for your first home.
When you reach out to us, we’ll schedule a free initial consultation with one of our experienced mortgage advisors in York. During this consultation, we’ll gather your information and understand your goals, before starting the process. Let us help you make this exciting step a smooth and stress-free experience.
During your free mortgage appointment, your dedicated mortgage advisor in York will conduct a mortgage affordability assessment. This evaluation involves reviewing your monthly income and expenses to determine if you can afford the monthly mortgage repayments for the amount you wish to borrow.
This assessment is critical, as it helps us ensure that you are able to afford your repayments and avoid the risk of default and potential repossession. This is something that both the lender and we strive to avoid.
Typically, the lender will conduct their own affordability assessment, but our initial check will save time for everyone involved, including the lender, us, and most importantly, you. It also helps prevent any potential declined applications due to affordability issues.
As part of your free consultation, obtaining a Mortgage Agreement in Principle is the next step. If you’ve been researching mortgages before seeking first time Buyer mortgage advice in York, you might have come across various names for this, such as ‘Decision in Principle’, ‘Mortgage in Principle’, or the abbreviations ‘DIP’ and ‘AIP’. Regardless of the name, these all refer to the same thing.
A Mortgage Agreement in Principle serves as proof that you have cleared a lender’s initial credit assessment, either through a hard credit search (which leaves a record) or a soft search (which does not leave a record).
This agreement is not a guarantee of mortgage approval, but it is a crucial step towards your ultimate goal. Having this document also demonstrates to a property seller that you are sincere in your intentions, potentially leading to better negotiation opportunities. An AIP typically lasts 30 to 90 days and can be easily renewed if it expires. Our team can usually provide you with an AIP within 24 hours of your initial appointment.
Having secured an Agreement in Principle, the next step in your home buying journey is to find a Conveyancing Solicitor, also known as a Conveyancer. This professional is responsible for handling the legal aspects of transferring ownership of the property from the seller to the buyer.
Your Conveyancing Solicitor will be responsible for several key tasks, including reviewing and negotiating contracts, providing legal advice as needed, conducting local council and authority searches, working with the Land Registry, and finally, transferring the funds needed to purchase the property. Given the critical role that this professional will play in the process, it’s important to choose wisely.
It’s worth noting that there are two types of Conveyancing professionals: Licensed Conveyancers and general Solicitors. Licensed Conveyancers are specialists in property law but may not be equipped to handle more complicated legal issues. On the other hand, general Solicitors offer a full range of services, but their services may be more expensive. While your mortgage advisor in York may not offer these services in-house, they have a list of trusted companies that they can refer you to.
You have successfully taken several crucial steps in your journey towards homeownership. After speaking with a mortgage broker in York, passing the Mortgage Affordability Assessment, and finding a Conveyancing Solicitor, you now have an Agreement in Principle in hand. This agreement, which confirms that a lender is willing to provide you with a mortgage for a certain amount, puts you in a much stronger position as you move forward to make an offer on the property you have your eye on.
When making your offer, it’s important to keep in mind that you don’t want to offend the seller by making an offer that is too low. However, don’t hesitate to negotiate the price. Having an Agreement in Principle in hand demonstrates to the seller that you are a serious buyer and that you have the financial capability to follow through with the purchase. This could increase the likelihood of the seller accepting your offer over others who may be willing to pay the full asking price, but lack the same level of preparation.
In the event that the seller declines your offer, it’s not the end of the road. You can either make a revised, more reasonable offer or choose to move on and find another property. If your offer is accepted, it’s time to return to your mortgage advisor and take the final steps towards securing your mortgage and completing the purchase of your dream home.
With the legal side of the home buying process taken care of, it’s time to focus on the mortgage aspect. One of the key steps in this process is submitting the required documentation to the mortgage lender. Given the large sum of money involved, the lender will need to ensure that they are lending to the right person and that they are able to repay the loan.
To verify your identity, financial status, and ability to repay the loan, you will need to provide a range of documentation, this includes:
If you are obtaining a joint mortgage, this documentation will be required from both parties.
With your mortgage offer being accepted, it’s time to move forward with the submission of your full mortgage application. Our dedicated mortgage advisor in York and their team of Mortgage Administrators have thoroughly reviewed and prepared all the necessary documents, so we are ready to submit your application to the lender.
Your advisor will send the collected evidential documentation to the lender, and then it’s just a matter of waiting for their decision. Although there is no set timeline for a response, our Mortgage Administration team will be monitoring the progress of your application and will follow up with the lender to ensure a prompt resolution. They will keep you informed of any updates and will be there to help if the lender decides to accept or decline your mortgage application.
Between the submission of your mortgage application and being offered a mortgage, the lender will require a property valuation survey to be conducted. This survey is usually performed by a trusted and accredited company nominated by the lender.
The purpose of the survey is to determine the true value of the property compared to the agreed purchase price. If the purchase price exceeds the actual market value, the lender may be less inclined to approve the mortgage, as in the case of default, they may not be able to recover the full borrowed amount. This scenario is commonly referred to as a “Down Valuation”.
There are various types of surveys available, each with different levels of detail and varying costs. Some surveys simply determine the property’s value, while others provide information about potential structural issues and necessary repairs for the future. Your mortgage advisor in York will assist you in selecting the appropriate survey for your needs.
The time has finally arrived – after your lender has reviewed your case and evaluated all the supporting documentation, they will present you with a mortgage offer.
At this point, our team of knowledgeable and friendly mortgage advisors and administrators in York, whom you have become familiar with throughout the process, will review the offer to ensure accuracy and completeness. Upon receipt of the mortgage offer, your Conveyancing Solicitor will then take over and guide the purchase to completion.
As a new homeowner in York, you have reached a significant milestone in your life. You have successfully navigated the complex process of purchasing a home for the first time, and we extend our heartfelt congratulations to you. With the stress and uncertainty of the buying journey now behind you, it’s time to settle into your new home and enjoy the rewards of your hard work and dedication.
The next step in your journey is to obtain the keys to your new home and begin the process of moving in. This is an exciting time, filled with anticipation and the possibility of creating new memories and experiences in your new surroundings.
We are proud to have been a part of your journey and to have provided you with the support and guidance you needed along the way. Our team of mortgage experts in York is committed to delivering a fast and friendly service that is tailored to your unique needs and circumstances. We understand that purchasing a home is a big commitment, and we strive to make the process as seamless and stress-free as possible.
If you have chosen a fixed-rate mortgage, rest assured that we will be in touch with you at the end of your term to assist you with your Remortgage needs. Our goal is to ensure that you continue to enjoy the benefits of homeownership for years to come, and we look forward to serving you once again in the future.
Keep in mind that the information below is intended solely for reference purposes and should not be taken as any kind of personal, financial or mortgage advice in York.
The most simple and straightforward answer to this question is yes, you may be able to get a mortgage if you are aged 40 years old or over. This does, however, come down to your situation.
In an old survey carried out on mortgage brokers by the Nottingham Building Society, a vast range of individuals surveyed highlighted that they have noticed a rise in mortgage applications being declined for those who were within this age range.
Through speaking directly to these customers that were aged between 45 & 54 and had declined in the time this was analysed, studies found that it was the age that was the ruling factor for this.
Below we will look into the reason why these home buyers are going through this as well as the best steps you potentially could take if you are interested in taking out a mortgage over the age of 40.
In order to really understand the situation these mortgage applicants are in, it’s key to take a look back in the past, long before computerised credit scoring was introduced and increased industry regulation.
Back then, if you were looking at getting a mortgage you would approach your local building society. It’s very likely that you would have been speaking to the building society branch manager or one of their in-house mortgage advisors in York.
They will look through all of the personal information that you provided in order to see how well you manage your finances in your current account so they can determine if your mortgage application should be approved or not.
In the fortunate case where you were to be approved, you will be able to have an insight on how much earners in a position like yours, were able to borrow for a mortgage. This will be presented to you in the form of a gross annual salary.
For example, if an applicant was earning a figure of approximately £20,000 per annum and the mortgage lender’s income multiple was 3.5x, this would result in you being able to get a mortgage of around £70,000.
An element that this income multiplier doesn’t include is the applicant’s age. As a result of this, age wasn’t factored in so it doesn’t matter if you were 30,40 or 50, usually, you would be able to borrow the same amount on a mortgage.
On the surface, this might seem alright, however, for those who are planning to retire at 65 with one having a term of upwards of 35 years, whereas the other may only have a 15-year term, this would mean they are paying higher monthly payments.
Let’s revisit the previous example of a £70,000 (capital and interest) mortgage, along with a national rate interest of 5%, below gives you an idea of what it looks like:
With this example, we have two earners that are pretty much identical, both with the same amount of mortgage debt, however, applicant two has a lot higher monthly payments.
In the event that the national interest rates drastically rose, this would result in a much higher risk of arrears happening for the applicant who has higher monthly payments. It’s all about minimising risk.
These days, modern mortgage calculators normally factor in the maximum length you could take a mortgage for (or in simple terms, your age), along with your income and your expenditure.
Previously, the BBC got contacted by our very own “Moneyman” Malcolm Davidson for this thought on the Nottingham Building Society study. His view was not so much that older customers are being declined, however, they cannot borrow as much as they perhaps hoped they’d be able to.
The irony within this situation is that we are in a frequent cycle of being told by our own government that it’s important we work until a later age, as a means to raise the retirement age for us to qualify for our state pension.
it’s unfortunate that the high street lenders don’t usually take this into account when it comes to accepting customers with getting their mortgages. Check out a more in-depth insight below.
First of all, there are many industries in the country that are manual labour-focused. It’s very unlikely that anyone going into their seventies will carry on working.
On top of this, mortgage lenders are usually closely regulated in terms of repossessions and arrears cases, because these look bad and they want to avoid them if possible. It’s quite costly to take a property into possession and can bring bad press for these mortgage lenders.
Pursuing the topic of mortgages for older mortgage applicants, they obviously don’t want to push a pensioner out of their own home due to not being able to cover their mortgage anymore.
Luckily, lots of mortgage lenders out there have looked at the idea of granting mortgages to applicants above the usual retirement age as a way to afford a mortgage in retirement.
As a way to do this, you would normally give your mortgage lender a letter from your pension provider that would project what your future income is going to be. The issue with this is that even with this, your income will normally be lower at retirement than it used to be.
When it comes to affording a mortgage, a mortgage lender would need you to prove that you are able to do, even with reduced income at retirement and beyond.
You may feel this works in theory, but this doesn’t always work well in practice unless you are thinking of taking out a smaller mortgage. At that point, you probably don’t need to take out a mortgage beyond that point.
Back in 2011, they dropped the default retirement age and made it so that your employer can’t force you to retire if you do not wish to do this.
Due to this, there will be a number of mortgage lenders who use the state retirement age as the general guide for working out when the mortgage should be repaid. On the other hand, it has started to become a lot more common for customers to be able to self-declare their retirement age.
Mortgage lenders will have a more logical approach to this. For example, if you had a more hands-on job like a firefighter and you wanted to declare 72 as your retirement age, it’s unlikely for this to be seen as realistic.
An experience that one of our Mortgage Advisors in York went through was with a mortgage lender who agreed to make a 9-year mortgage for a 66 year old accountant who was looking to retire at the age of 75.
This situation is quite niche and won’t apply to the majority of people meaning it is not a guarantee you could go for this option, however, it does highlight how flexible some mortgage lenders can be flexible. To increase your chances, it’s good to demonstrate how you are to afford a mortgage when you retire.
There are consumer protections and regulations that are there to protect consumers and encourage careful lending.
In your later years, there is a range of routes you could go down to protect you and your home like equity release in York through taking out a lifetime mortgage, or alternatively look at retirement interest only or possibly a term interest only.
If you speak to a trusted and qualified later life mortgage advisor in York can look at your situation. Furthermore, if you are at the qualifying age for these types of mortgages and would like to start looking into the different options further, they can kickstart a conversation with you and your family regarding this topic.
Whether you are a first time buyer in York or are thinking of moving home in York, feel free to get in touch or book your free mortgage appointment. Our mortgage advice team are happy to take our call.
To understand the features and risks of equity release in York, lifetime mortgages and later life lending, ask for a personalised illustration. Our typical advice fee is up to £1,495 only payable on completion.
A lifetime mortgage in York may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.