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.
Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.