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Securing a mortgage

Ross McKenzie

Securing a mortgage - From agreement in principle to full offer


For around 70% of buyers, securing a mortgage is an essential part of purchasing a home. The mortgage process involves several stages, each designed to assess affordability and ensure the buyer can meet future payments. In this guide, we’ll cover the steps involved in securing a mortgage, from obtaining an Agreement in Principle (sometimes called a Decision in Principle) to receiving a full mortgage offer, and what each stage means for you.


1. Starting with an Agreement in Principle


An Agreement/Decision in Principle (AIP/DIP), is the first step in the mortgage process. This document shows how much a lender might be willing to lend you based on your financial situation.


  • Initial affordability check: The AIP is based on a preliminary review of your income, expenses, and credit history. This gives you a realistic idea of what you can afford and helps guide your property search.

  • Strengthens your offer: Having an AIP shows sellers that you’re a serious buyer with a reliable source of funding. This can make your offer more attractive in competitive markets.

  • Validity Period: An AIP typically lasts for 60 to 90 days, so it’s wise to have it in place once you’re ready to actively search for properties. Your mortgage advisor will have full visibility of your sale through Open Moove, so will be on hand immediately to arrange this for you once you're ready to purchase.


2. Applying for a full mortgage


Once you have an accepted offer on a property, you can proceed with the full mortgage application:


  • Gathering documentation: You’ll need to provide detailed documentation for this stage, including proof of income, tax returns, bank statements, and ID verification. The lender uses this information to conduct a thorough affordability assessment.

  • Property valuation: As part of the mortgage application, the lender will conduct a valuation of the property to ensure it’s worth the amount you intend to borrow. This is different from a survey, as it’s mainly for the lender’s benefit. This can be done by them in person or sometimes online.

  • Affordability and credit checks: The lender will perform a more comprehensive review of your financial situation, including credit checks and income assessments, to confirm your ability to make monthly repayments.


3. Understanding mortgage types and terms


There are different types of mortgages available, and choosing the right one depends on your circumstances:


  • Fixed-Rate Mortgages: These mortgages have a fixed interest rate for a set period, typically 2 - 5 years. This provides stability in monthly payments, which can be beneficial if you prefer predictable expenses.

  • Variable-Rate Mortgages: With variable rates, the interest rate can fluctuate based on market conditions. These include tracker mortgages, which follow the Bank of England base rate, and standard variable rate (SVR) mortgages, which change at the lender’s discretion.

  • Repayment vs. Interest-Only Mortgages: Repayment mortgages require you to pay both interest and principal, gradually reducing your debt. Interest-only mortgages, on the other hand, involve paying only interest during the term, with the principal repaid at the end.


4. Receiving a full mortgage offer


After assessing your application and valuing the property, the lender will issue a formal mortgage offer:


  • Offer terms and conditions: The mortgage offer will outline the loan amount, interest rate, repayment term, and any conditions you need to meet before completion.

  • Validity period: Mortgage offers are usually valid for 3-6 months, allowing time for the legal processes to be completed. Ensure your conveyancer is aware of this timeline to avoid delays.

  • Acceptance and preparation for exchange: Once you accept the mortgage offer, your solicitor can proceed with final preparations for the exchange of contracts, so long as all other legalities and paperwork is complete.


What Open Moove Suggests Next


At Open Moove, we recommend these steps to help secure your mortgage successfully:


  1. Work with a Mortgage Advisor from day one: A professional advisor can guide you through mortgage options, ensuring you secure the best product for your needs. Utilise our marketplace to make an informed decision on who you'd like to work with.

  2. Prepare Your documents in advance: Having all necessary documents ready will help speed up the mortgage application process and avoid delays. You can upload documents on Open Moove securely.

  3. Leverage Open Moove’s resources: Our platform provides helpful tips on navigating the mortgage process and working with trusted mortgage advisors to make informed decisions. If you have any questions, just ask!


By understanding each stage of the mortgage process and staying organised, you’ll be well-prepared to secure the funding you need and move closer to completing your property purchase.



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