Timing - Arrange your mortgage well in advance as obtaining finance is often crucial to buying a new house.
AIP – the first stage in the mortgage process is to obtain an Approval In Principle. This means that a lender will ask you for information on your circumstances (address, income, outgoings etc.). The lender will then submit this information onto their system and the system will carry out a credit check. A credit check involves checking your credit history and payment record. When the credit check is returned (normally instantly), the lender will inform you if you have been approved or not. Lenders will differ in their lending criteria and some will lend more amounts than others. If you have been unsuccessful with one lender it does not necessarily mean that you will not be able to obtain a mortgage. You may want to obtain an approval in principle before reserving property.
Full Mortgage Application – a full application involves moving your application forward from the approval in principle stage. At this stage the lender may require documentary evidence to confirm the information you have supplied at the approval in principle stage e.g. payslips, identification etc. The lender will also require a valuation of the property to be carried out.
The Mortgage Offer – when the lender has received all the relevant documentation and they are satisfied with your application, they will issue the Mortgage Offer. A copy will be sent to yourself and a copy will be sent to your solicitor. The mortgage offer is an agreement in writing from the lender setting out the terms and conditions (monthly payments etc) of your mortgage. The mortgage offer needs to be issued before your solicitor can obtain the funds from the lender to complete your purchase. A mortgage offer will be valid for a certain period of time depending on lender. With some lenders this will be 6 months but with others it may be shorter. You need to ensure that the entry date for your property falls within this period. Some lenders will be able to extend their mortgage offers, given certain circumstances.
Booking a Rate – with certain lenders it is possible to “book” a particular interest rate before submitting a full application thus securing your payments at a particular level.
Change of Circumstances – if your circumstances change during the mortgage process (change of employment, etc), you are required to inform your mortgage lender.
Multiple Credit Searches - each time you apply to a lender for an approval in principle they will carry out a credit search. Each time a credit search is registered on your credit file it lowers your credit score.
Lenders Timescales - different lenders will have different timescales for processing mortgage applications. You may need to consider this if, for example there is a quick entry date for your property.
Lending Criteria - different lenders will have different rules and regulations, i.e. some will lend more than others, some will lend up to 90%, some will lend up to 85%, etc.
Moving house can be both exciting and stressful at the same time, so to help ease that stress we have put together some helpful hints on the important things to remember.
Once you know your completion date for moving you need to start planning because planning your move in advance will save you hours of heartache in the long run.
One month to go –
Two weeks to go –
One week to go –
The day before your move –
The day of your move –
Remember not to work too late into the night trying to get everything unpacked, a good nights sleep will recharge your batteries and make it easier to get organised the next day.