When it comes to purchasing a property there is a lot to consider. As well as looking for, making an offer and having that offer on your dream home accepted, you have the legal paperwork, mortgage application, moving arrangements and more to consider.
As specialists in our field, we complete hundreds of mortgages for our clients each year and thought it would be helpful to explain more about how the process works.
The process for a buy-to-let property is slightly different, so we have focused this article on the process for your standard residential property purchase. We have outlined this in five steps:
- Mortgage Agreement in Principle
A mortgage agreement in principle (AIP) is a document stating how much a lender would potentially loan you given an initial review of your circumstances. It also helps show that you are serious about making the purchase when viewing and will generally last for around 90 days.
An agreement in principle is a soft check that does not take long, and the lender will look at the following to provide you with a figure:
- The exact details of your income
- Details of your outgoings and any existing credit agreements
- Your addresses for the last 3 years
- Valuation and survey
Once you have had an offer on a property accepted, you can begin the full application process, which is where the lender reviews your circumstances as well as the property itself.
Your lender will carry out a mortgage valuation and survey on the property you are purchasing, and this generally requires a surveyors visit to the property.
The reason for this is that the lender needs to make sure that the property is worth what you will be paying for it and that it is also structurally sound, so they know that their loan is properly secure.
- Mortgage offer
Once they have completed their checks, your lender will issue a formal offer confirming the amount that they are willing to loan you. This offer tends to last between three to six months, and within this time the necessary legal paperwork will be carried out in order for the sale to complete.
It your sale does not complete by the mortgage offer deadline; you may be able to extend the offer by requesting through your broker. This may require some additional checks and fresh paperwork to be provided.
- Final steps
When your sale is ready to complete, your conveyancing solicitor will use the money received from the mortgage lender along with your deposit to send the seller’s solicitor and as soon as funds are received by the seller’s solicitor, you will be able to collect your keys and get started with the move!
As you will see, there are several different steps, however the process is relatively straightforward.
If you are purchasing a property and have any questions, then we will be more than happy to help where we can. You can either call us on 01322 553282 or contact us online.