Your home may be repossessed if you do not keep up repayments on your mortgage
For anyone considering the purchase of a home, obtaining a mortgage is likely to be the first step in the process. From making the application to handling the repayments, there are plenty of considerations which you have to make when obtaining a mortgage and this
is why speaking to the mortgage advisors at Mortgage2day is recommended.
To help you understand the process behind mortgage applications and approvals a little more clearly, here is a rough guide of everything you need to know:
What is a mortgage?
A mortgage is a long term loan which is offered to individuals, using a property as collateral or insurance. The loan is used to purchase the property and the applicant repays the lender a set monthly payment. The period of the mortgage will usually last for a number of
years (as much as 30 years) and will be for a percentage of the property (80 per cent, for example).
If repayments are not met then the house can be repossessed by the lender in a process known as foreclosure. It is worth noting that this only happens in extreme cases when all other options have been exhausted. Usually, lenders will be willing to extend the
term of the mortgage instead and any individual facing difficulties with their repayments should contact their lender as soon as possible to discuss their options.
There are many different types of mortgage product available on the market, ranging from buy to let mortgages to self employed mortgages. The type of mortgage you select will depend on your situation and it is recommended that you discuss your circumstances in
detail with a qualified mortgage advisor, such as those at Mortgage2day.
What is an agreement in principle?
This is something which is provided by the mortgage lender and is similar to a conditional mortgage offer. It will outline the amount of money they would be likely to lend you if certain terms and conditions are met.
This document can be incredibly useful when making an offer on a property and will provide an indication of whether you can afford the purchase or not.
The agreement will be based on your circumstances, including the details of your salary, so it is important you are completely truthful.
How do I make a full mortgage application?
Once you have committed yourself to purchasing a particular property you will need to make a full mortgage application in order to arrange the finance to purchase the property. The lender will ask you to provide certain details, including personal
identification information and details of your income.
The house you are buying will be valued and the lender may charge a fee for this. There may also be a fee incurred to process the application. The house valuation is completed as a preventative safety measure and will establish whether the price you have agreed
to pay for a property is indicative of its market value. If the mortgage lender finds discrepancies in this then they may adjust the amount of money they offer to lend you.
On top of this, mortgage lenders may also ask you to provide written references. These will usually come from your employer and bank and a current lender or landlord. If you are self employed then your accountant may be asked to provide a reference instead of your
bank. The advisors at Mortgage2day are experienced with the lenders requirements and will be able to advise what documentation will be required when you make your application.
Providing these references are in order and the valuation of the property is accepted, the mortgage lender will extend a formal mortgage offer to you and your purchase solicitor. Once these are signed and returned, the lender is obligated to lend you the money.
Many lenders will stipulate that you must obtain home insurance for the mortgage to be approved. Usually buildings insurance will suffice for this but it may be worthwhile investing in cover which protects buildings and contents. The advisors at Mortgage2day
can help you with this and offer some of the cheapest rates on the market.
Why should I use a solicitor?
It is absolutely necessary that you use the services of a solicitor to manage the legal side of these dealings. A purchase solicitor can help you draw up all of the necessary contracts and paperwork, making the process easier to manage.
There are lots of solicitors that offer this service however some can be very slow and this can delay the entire mortgage process. We have used our solicitors for many years and know they offer a fast, efficient service. They will work closely with the mortgage
advisor to ensure the whole process runs smoothly – giving you peace of mind.
Take a look at legal services which include conveyancing solicitors to make sure you have all the help you need.