The process of applying for a mortgage
With all the seemingly complicated terms that are thrown around when talking about mortgages, applying for one can be scary. That’s why at Home Estate, we have compiled the following guide in applying for a mortgage.
If you want to read an introduction to mortgages and read about the different types on offer, see our two previous posts.
The process of applying for a mortgage is relatively simple and generally involves two stages to the application process.
After initially enquiring and applying for a mortgage, the lender or mortgage broker will ask questions to find out the kind of mortgage you are after, and how long you want it for. They will also assess your financial situation to determine how much a lender may be prepared to lend you.
The lender should then give you an insight to the product, their service and any fees or charges if necessary. A mortgage broker will then take all your information into consideration before recommending a mortgage provider that best suits your needs.
The lender or mortgage broker will begin a detailed affordability assessment, for which you’ll need to provide evidence of your income and specific expenditure, and ‘stress tests’ of your finances. This could involve some detailed questioning of your finances and future plans that could impact your future income.
They’ll also assess the impact on your repayments should interest rates rise in the future.
If your application has been accepted, the lender will provide you with a ‘binding offer’ and a Mortgage illustration document(s) explaining terms of your mortgage.
This will come along with a ‘reflection period’ of at least 7 days, which will give you the opportunity to make comparisons and assess the implications of accepting your lender’s offer.
During this reflection period, the lender usually can’t change or withdraw their offer except in some limited circumstances for example if the information you’ve provided was found to be false.
If, after the reflection period, you decide to go ahead with the lender’s offer you can accept within the reflection period or soon after (the lender will let you know how soon after before the offer is withdrawn).
Once you accept the lender’s offer, the money will be transferred to the seller on the completion date of the purchase.
Home Estate work with a number of mortgage brokers who would be happy to offer free advice Call us on 01634 580157 or firstname.lastname@example.org