First Time Buyer Mortgages
Buying your first property is pretty exciting but it can also be quite overwhelming. For first time buyers, the thought of taking on a tonne of mortgage debt and not having the foggiest on where to start could easily scare you off. Fear not, in this blog I tell you all you need to know about the mortgage process…
Unless you’ve got a couple of hundred grand stashed under your mattress you’ll probably need a mortgage to help you buy your first home. So where do you start, well you have a few options, you could go to your bank, go to an online comparison site or use a mortgage broker (cough, cough!)
Going directly to your current bank is often people’s first port of call but your bank can only tell you about their own products. They will probably have two or 3 products that you could be eligible for so the choice is very limited.
You could go to the meerkats online but more often than not you aren’t actually eligible for the headline products being advertised and these comparison sites tend to only include the big banks that pay a fortune to be featured which means you could be missing out on a more suitable product.
Whereas a good whole of market mortgage broker will not only advise you on products from your bank, products available on comparison sites but will also compare these to products from all other lenders. This is likely to include thousands of products from over one hundred different lenders.
Whatever choice you make – ensure you speak with someone about your mortgage budget at your earliest opportunity BEFORE doing anything else.
Once you’ve spoken to a mortgage broker, bank or a meerkat they should be able to calculate your affordability and provide you with a rough budget. However, rough budgets do not cut the mustard when buying a house. It’s ok as a starting point but you should never start house shopping based on a rough budget.
So, the next steps would be to verify your budget and as your mortgage broker, I would request your pay slips, bank statements and a copy of your credit file so I can accurately assess your circumstances. Once I have reviewed your documents, I can provide you with an accurate mortgage budget and declare you ‘Mortgage Ready’. Now the fun begins and you can go house hunting!
The next step is to arrange some viewings of properties that are within your budget. It’s important that you use the viewing’s wisely to check out what properties you like and dislike.
Here are some questions you may want to ask the agent during your viewings:
- What’s the reason the owner is selling?
- How long has the property been on the market for?
- How many viewings has the property have?
- How many offers has the property had?
- Is there an onward chain?
- Is the property built of standard construction?
- What are the ground rent and service charges? (flats and apartments only)
- What is the remaining term on the lease? (flats and apartments only)
This information will help when it comes to submitting an offer and negotiating the best price.
Once your offer has been accepted, inform your mortgage broker who can then submit your full mortgage application. At this stage, we may require some further supporting information such as your conveyancer’s details, property address and type, direct debit details etc.
The broker will then submit your application along with any required supporting documents to the lender. Once your application has been received by the lender, they will complete their own internal checks commonly known as underwriting. The underwriting process includes a hard credit check and a property valuation.
The lender will instruct an independent surveyor to assess the purchase property to ensure it is suitable security for mortgage purposes, this includes considering the property structure, location and whether it’s worth the price you agreed.
Once the underwriter receives a satisfactory valuation report from the surveyor and finalises their internal checks, a mortgage offer can be issued!
The secret to a quick and smooth mortgage offer is ensuring the mortgage application is submitted with all of the required documents the first time around. As your broker, we know exactly how the lender expects your application to be packaged up and how best to present it to them.
Receiving your formal mortgage offer is a huge milestone in the home-buying process and for the most part, your broker’s main job is done. It’s now over to the conveyancer to take the reins and drive the purchase towards the exchange of contracts and then completion. However, a good broker will continue to check in with you regularly and is always on hand to answer any ongoing questions.
