When you’re looking to buy a property, it’s essential that you understand the mortgage process. It can seem daunting at first glance but this guide will give you the lowdown on the whole thing, from application to offer. The first thing to do is fill in the mortgage application. This may be done online, over the phone, or by paper depending on the lender and what type of mortgage is being applied for, this is done by your broker.
Initial underwriter checks –
When the mortgage application has been submitted, your case will then pass on for underwriting. This is where the lender processes any information that may affect your chances of getting the mortgage(such as affordability and previous credit issues), they will ask for the documents they require to evidence and back up the information on the application.
Full credit search and hard inquiry –
A full credit check is carried out, this will usually include a ‘hard’ inquiry on reference agencies such as Experian. This shows up any missed payments or defaults with other lenders such as personal loans.
Instructing the valuation –
They will instruct a valuer to attend to the property and give it a valuation. This is to check that the property is worth what you’re intending to borrow against it. The lender will also be checking that the property fits their criteria.
Sending all the documents –
The documents that the lender initially requested to support the application will be sent over, these can include proof of address, ID, and income.
Assessing the property –
Once all the documentation has been received and the valuation report is back the underwriter will then assess whether or not the property is suitable security for a mortgage and assess the documents and application as a whole. This includes checking that the case meets their lending criteria as well as the valuation report.
Approval of affordability check –
If they’re happy with everything, including your credit score and income requirements, then you’ll pass this stage which is known as an ‘affordability’ check or assessment. The lender will ensure that you can afford to repay the mortgage both now and also if there are interest rate rises in the future.
If everything is good to go, they will then issue the mortgage offer. This is an agreement between you and the lender that states all the terms and conditions of the mortgage including rate, term, and amount. The mortgage process can be lengthy but it’s worth the wait when you finally get the keys to your dream home. By understanding each step of the process, you’ll know what to expect and how to prepare along the way. So, if buying a property is on your horizon then get in touch to let us help you from enquiry to getting your keys.
Momentum Mortgages are mortgage brokers based in Sevenoaks, Kent. We help people to buy, invest or remortgage property while reducing stress and saving time. We have helped clients all over Kent including Tunbridge Wells, Tonbridge, Maidstone, Swanley, Dartford, Bromley, Orpington and more.