MORTGAGES FOR FIRST TIME BUYERS
The complete First Time Buyer journey consists of seven steps over two stages when it comes to mortgages for first time buyers.
Stage 1) Pre-application: This stage is where you would have a “Strategy Call” which is all about understanding a bit about yourself and what you are looking to do. We would assess your affordability, check your documents and credit file to make sure you are “Mortgage Ready”.
Stage 2) This stage is all about the mortgage application process, taking you from application to key collection! Even though this process has fewer steps than stage 1, the stages involve much more of a lengthier process and the ground work and preparation of the process in Stage 1 will really come to fruition and provide a smooth mortgage application.
See below our “First Time Buyer Journey” which provides the full detail and process broken down, taking you from the point you make contact to the point you own your dream home. Our passion is making mortgages for first time buyers much easier!
Your journey broken down
This is where you will receive a phone call from myself or one of my experienced team members. We will go through some basic information such as income, credit history and debts. This call will take around 10 minutes and we will see if you are mortgage ready now and if not what you need to do. Assuming you are, we can move onto the second step, Fact Find and Documents.
To provide a proper assessment of your situation and to make sure all the information taken in your Strategy call is reflective of the information you provided, we will send you an email requesting you fill in a Fact Find and provide copies of the following documentation.
- ID (passport of driving license)
- Address verification (Within the last 3 months, not a mobile bill)
- Employed: Proof of income (3 months payslips of 12 weekly payslips, Last 2 years P60’s)
- Sole Trader: Proof of income (Latest 2 years Tax Calculations with accompanying Tax Year Overviews)
- Limited Company: Proof of income (2 years Company accounts plus latest 2 years Tax Calculations with accompanying Tax Year Overviews)
- Last 3 months bank statements (Salary credited)
- Proof of deposit
- Full credit report (Via CheckMyFile)
- All existing Life Insurance, Critical Illness Cover, Income Protection and House Insurance policies
We will then book in a follow up call two days later to go through the information you have provided and see if you need any further assistance or more time.
We will discuss our terms and condition and compliance documents.
We will book in a “Follow up” call two days later to see how you are getting on with the documents and answer any quesions and go through the mortgage products and valuation types in the next stage.
We will disucss the different mortgage products and repayment methods with you and make a recommendation on which products to consider, based on your circumstances and attitiude towards risk.
- Fixed rate mortgage (A rate that stays the same – low risk attitude)
- Variable rate mortgages (There are various products under this category; Tracker, discount, flexible, offset and all rates can go up or down. High risk attitude)
- You can choose to have these products for 2, 3 5 years or sometimes 10+ years
- Repayment Mortgage – Also know as a capital and interest mortgage – This is because your monthly payments will contribute towards the capital of the mortgage and the interest, meaning your balance will reduce and your mortgage will be repaid in full at the end of the mortgage term.
- Interest Only Mortgage – Your monthly payment only contributes towards the interest and your debt does not reduce. We do not recommend this type of mortgage to first time buyers.
Once you are happy that you can satisfy the documents and information requested, and you are happy to proceed, we would discuss mortgage products and valuations to understand your preferences. The next steps will be to press on with the quotes which will reflect your mortgage requirements. On the basis you are happy with the mortgage quote, we would need your written authoity to proceed to an agreement in principle and confirmation you are aware that a credit score would be conducted. If you have found a property, we would provide you with:
- Mortgage quote
- Mortgage protection quote
- House insurance quote
- Solicitor quote
If you have not yet found a property we would provide you with a mortgage quote, and the quotes mentioned above would come once a property is found.
We would send yourself an agreement in principle certificate and your Estate Agents if applicable. An agreement in principle means the lender is happy to lend the money in principle, on the basis we can provide evidence that reflects the information we have provided. This will also show to the Estate Agents you are serious buyers.
Once you have found a property we will request, via email:
- Full property address
- Your instructed Solicitors
- Direct debit details and preferred monthly payment date
The next step is too submit the full mortgage application to the mortgage lender. This involves providing the lender with all of the details that we have collected from you and the relevant documents, backing up the information already provided.
Once the mortgage application is in to the lender, normally within 24 hours we would receive confirmation of the applkcation and your application number. Once that has been received, we would send you a Welcome email confirming the next steps between this point and completion.
Once we have sent you a Welcome email, a Personal Assistant will be alloceted to your case, who will also be in touch to introdue themselves to you and will act as a point of contact throughout the application, making sure the lender is progressing your case and providing any assistance with your Solicitor paperwork.
Your Solicitor will also be in touch and will require, usually around £250 – £300 to get the ball rolling, and commence your “Searches” as explaiend in the Solicitor stage.
Once your mortgage is submitted, the goal is to try and get the valuation instructed as soon as possible. This means that the mortgage lender has arranged for a surveyor or valuer to phone the Estate Agents or seller to arrange a date to visit the property and value the property.
Some lenders will do this immediately at application, and others prefer to assess the documents first before the instruct the survey. You will be informed at application stage in regards to how the lender works.
Once the valuation has been completed and is successful, meaning the lender agrees that the property is worth the price you are paying for it and that no problems have been found, the next step is to receive a mortgage offer.
A mortgage offer is the legal documentation which confirms the lender is willing to lend the money to you. This is the main objective from our point of view and is a big step towards a successful transaction. We will check the mortgage offer is correct and will send you confirmation along with a copy of the mortgage offer.
A copy of the mortgage offer will be sent to yourselves, Mortgage Chain and your solicitors. All of the offers vary, so each party needs to have received their version before the next steps can be completed.
Once your Solicitor has received their copy, usually within a week, you should receive an update form your solicitor with confirmation of any outstanding requirements along with an estimate it will take to “exchange contracts” and “complete”.
Once your Solicitor has carried out all of their legal duties on behalf of yourself and the mortgage lender, all parties within the transaction will look to agree a date in where you “exchange contracts”. You would have received a copy of the contract via the post and will be required to sign and send that back to your Solicitor. Your Solicitor will also ask you for your deposit and will provide you an invoice to pay any outstanding fees.
Once all parties have completed this step you will have a date set for “exchange”. Once this date comes, you are legally bound to the terms of the contract and the next step will be to “complete” and receive your keys. There is normally a gap of around 1 week between exchange and completion. This is so the lender can send the money to the solicitor and have everything prepared. Sometimes this can be longer depending on circumstances and other times exchange and completion can happen on the same day.
So this is the exciting part! On the day of completion, you will need to wait to hear from your Solicitor to confirm once all of the monies have changed hands and that you can collect your keys. This is usually in the afternoon, but as a side note this can sometimes go later into the day, so be prepared!
Once you have collected your keys, you will officailly be a home owner and can take your first steps into your heavenly home!
So what are you waiting for ? Let’s do this. Book a Strategy call below. We look forward to connecting you to your heavenly home!