It’s a common question that we often get asked and here are some of the key considerations that you need to take into account when considering the mortgage process. You may be first-time buyers or haven’t purchased a new home for some time. As experienced mortgage advisers, we are here to support you throughout what can be quite a stressful process at times.

The beginning

The journey begins with house viewings and finding a property. Since 2020, it has become common practice for estate agents to require a mortgage decision in principle before allowing any viewings. Once the ideal property is found and an offer is made; it is down to the vendor/seller to choose which offer to accept (usually the highest offer but not always, you may be first-time buyers which tend to be preferred over buyers who may need to sell their home in order to complete the purchase, thus creating a ‘chain’). Even after an offer is accepted – it is not binding as another offer can be accepted prior to exchange. This highlights the importance of being prepared once you have your offer accepted to avoid the risk of the vendor/seller considering their other options or becoming concerned that you are not in a position to buy.

The lender

When an offer has been accepted, the formal mortgage application is sent. The lender will require a valuation of the property to ensure the property has adequate value as security for the loan applied for. At this point a lender will decide to lend based on their valuation. For example, if buying a property for £200,000.00 with a £20,000.00 deposit (i.e. a 90% loan to value mortgage) and the subsequent valuation was confirmed at £180,000.00, this would mean the lender would only lend £162,000.00 against the property and thus leaving a £18,000 shortfall which would need to be funded by yourself as in the lender’s opinion you are overpaying for the property. The buyer could choose to have their own independent valuation or building survey which can sometimes depend on the age of the property, we always discuss and recommend undertaking a more detailed valuation.

On completion of the lenders valuation and due diligence procedures, the lender will produce a mortgage offer which is binding for 3-6months to allow time for the property purchase to go through.

The Conveyancing Process

Following the building survey/lender valuation it’s time to instruct the solicitors to commence the searches on the property. It’s now time for both the buyer and the vendor’s solicitors to set a date for the completion and exchange of contracts. It is imperative that buildings insurance has been taken out at the point of exchange by the buyer as they are now liable for the property. The buyer’s solicitor will now then receive the title deeds and transfer deeds ready to be signed to complete the purchase. Your solicitor will deal directly with the lender to ensure that the mortgage monies are ready for completion.

To summarise, there are many different aspects to consider when purchasing a residential property, at PJL Financial Services Limited, we can support you in understanding the most suitable option based on your own individual personal circumstances and guide you through the process. If you would like to learn more about this subject or require Independent Financial Advice from our local, experienced and friendly team, please feel free to contact us on 01788 57 11 22.

The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. It does not constitute advice. All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor. 

PJL Financial Services Limited are authorised and regulated by the Financial Conduct Authority. 

Your home may be at risk if you do not keep up repayments or other loans secured against it.