We tend to find a lot of customers asking us about the process of being a first time buyer in London when buying a home. Below we put together an extensive list of the 10 steps that you will go through during the mortgage process. We want to make sure that you are in the best possible position to get you prepared for your mortgage journey.
Here are the 10 steps to the home buying process and to obtaining a mortgage;
Step One: Get in Touch for Your Free Mortgage Appointment
Now, it’s time to purchase a home and take out a first time buyer mortgage. Getting onto the property ladder will be one of the biggest financial decisions you’ll ever make. The entire experience can be a bit daunting, especially when you have had no experience before.
With the help of a dedicated Mortgage Broker in London, we’ll be able to help you along the process. We aim to take the stress away from you and work hard to ensure you come out with a suitable mortgage deal.
To speak with one of our qualified Mortgage Advisors in London, book your free mortgage appointment today. They’ll take a few key details and look at what you’re hoping to achieve, before starting your process.
Step Two: Mortgage Affordability Assessment
During your free mortgage consultation, we’ll be able to run through a Mortgage Affordability Assessment. Our Mortgage Advisors in London will go through your monthly income and regular expenditures, to determine whether or not you can afford the monthly repayments of the mortgage amount you’re looking to borrow.
The reason why doing an affordability assessment is essential before putting your application forward, with a lender, is because they need to be confident that you can afford your repayments. By avoiding the risk of arrears and potential future repossession, something the lender will desperately want to avoid.
A Mortgage Affordability Assessment is something the lender will usually check themselves, so our initial check will help save the time of the lender, ourselves, and more importantly you, from an application that may be declined due to failing on affordability.
Step Three: Obtaining a Mortgage Agreement in Principle
During your consultation, you will be able to obtain a Mortgage Agreement in Principle. Which can help give First-Time Buyers in London a boost when making an offer on a property.
You may have seen this under a few different, but similar names. These include ‘Decision in Principle’, ‘Mortgage in Principle’, as well as the abbreviations ‘DIP’ & ‘AIP’. There is no difference between these, other than the name.
The purpose of a Mortgage Agreement in Principle is to document that you have passed a lender’s initial credit scoring system, either via a hard credit search or a soft search.
However, this does not guarantee you will be accepted on a mortgage but is a necessary document to have. Having an A.I.P. will show the seller of a property that you are serious buyer, possibly creating a possibility for price negotiations.
An A.I.P. can last anywhere between 30-90 days, and can easily be renewed once expired. Our Mortgage Advisors in London can usually get one of these turned around for you within 24 hours of your initial appointment.
Step Four: Finding the Right Solicitor
Following your Agreement in Principle, you will need to find yourself a Conveyancing Solicitor to help you with the legal proceedings of the homebuying process.
Your Conveyancing Solicitor will be able to handle; Contracts, provide any legal advice, conduct local council / authority searches, deal with the Land registry, and transfer the funds you have acquired to pay for your property. As you can see, you must make sure you can choose carefully.
Also make sure to note that Licensed Conveyancers are property specialists who can’t deal with complicated legal issues, whereas more general Solicitors offer a full range of services so can often seem more expensive.
Sadly, whilst we do not offer these services ourselves in-house, our dedicated Mortgage Advisors in London can refer you out to someone to is.
Step Five: Making an Offer on a Property
After speaking to a Mortgage Broker in London, passed the Mortgage Affordability Assessment, obtained an Agreement in Principle, and found yourself a Conveyancing Solicitor to handle the legal side of things. You’re now halfway through the process, next it’s time to make an offer on the property you wish to purchase.
With an Agreement in Principle, you will be in a much better place to negotiate on price. With the seller knowing that you have an AIP they may be more likely to sell to you than someone who is willing to pay the asking price but is unprepared. But this isn’t a guarantee.
Worst-case scenario the seller rejects your offer, you can work out a more reasonable offer or find yourself another property. If your offer got accepted, get back in touch with your Mortgage Advisor in London, and they will continue with your mortgage journey.
Sixth Six: Submit Your Documents
Make sure to submit the required documents. Your lender will need you to provide various documentation, including the amount you earn from your job, where you live, and how you conduct your finances, are very important to the lender.
If you’re obtaining a joint mortgage, they will require this documentation from both candidates involved. The several types of documents you will need to submit, include;
- Proof of ID and proof of address
- Last 3 months’ pay slips
- Latest P60
As for self employed applicants in London you will need to provide;
- Proof of any income such as state benefits or maintenance
- Proof of deposit
- The last 90 days’ bank statements
Step Seven: We’ll Progress Your Mortgage Application
With your mortgage agreed in principle, and your offer accepted, your Mortgage Advisors in London can now proceed to submit your full mortgage application. Having everything checked and ready by your Mortgage Advisor in London and Administrators, we are ready to submit an application to the lender for a mortgage.
Your Mortgage Advisor in London will send off all the gathered documentation for this, and then wait for them to respond with whether or not the application has been accepted or declined. Sadly, there is no given time frame, however, our Mortgage Administration team will be able to chase the lender for an answer on this for you.
Step Eight: Property Valuation / Survey
During the process, the lender will require a valuation survey of your property to be undertaken. These are usually carried out by the lender’s choice. The valuation is to help understand the true value of the property.
If you’re paying above its actual market value, the lender may be less willing to accept your offer. Because they’ll be out of pocket and unable to make back the full borrowed amount. This terminology is also known as a ‘Down Valuation’.
Your Mortgage Advisor in London will be able to help you choose the right survey for you. Each surveyor comes with a different price. Some will just want to check the property’s worth, whereas some will also provide information on any structural concerns as well as possible repairs.
Step Nine: Receiving Your Mortgage Offer
Once your lender has checked over your case and assessed all the evidencing documentation, they will present you with your Mortgage Offer.
Our team of Mortgage Advisors and Administrators in London will make final checks to make sure nothing got missed. Next, it’s down to your Conveyancing Solicitor to take your purchase through to completion.
Step Ten: Completing The Process
Now for the exciting part, you’ve now officially went from a first time buyer in London to a homeowner. By now, we hope you are happy and ready to begin your new life, in your new home.
Just have to wait for the key and moving-in date. We hope you found our service beneficial and received a fast and friendly Mortgage Advice service in London. If you have chosen a fixed-rate mortgage, at the end of your term, we will be in touch to help out once again with your remortgage in London!
Date Last Edited: January 20, 2023
