Buying a property is probably the biggest financial investment we ever make and therefore it is important that you are able to make an informed decision when choosing a mortgage. Understanding mortgages can be complicated, which is why we are here to help you every step of the way.

A mortgage is a loan secured on a property and for most people, the only way to fund a property purchase. The loan is ‘secured’ against the property, which means that if you fail to keep up the repayments on the mortgage, the lender could repossess your home.

All mortgage products require a deposit. This is usually from your savings and the mortgage makes up the difference and is expressed as the percentage ‘Loan To Value’. An example would be if you put down a £10,000 deposit on a £100,000 property, the deposit would be 10% and the mortgage loan-to-value would be 90%.

A mortgage is made up of two parts

The capital, which is the amount borrowed and

The Interest, which is the charge made by the lender on the outstanding balance until the loan is repaid.

When you take out a mortgage, you need to decide how long you want to repay the loan, this is called the Mortgage Term. Then you need to know know how much the mortgage will cost you each month.

Different types of Interest rate.

Mortgages come with either a fixed rate or a variable rate. With a fixed rate mortgage your repayments will stay the same for a chosen period of time regardless of what happens to interest during that time. With a variable rate, the amount you pay could go up or down. Ask us for more information about this at any time.

The process

When you have decided to purchase a property, you will need to speak to an adviser.

Bank or Building Socities can only tell you about their own products so it could be very time consuming for you to find out what is on offer and you would then have to make a choice based on limited information.

Using our expertise, The Mortgage Outlet will assess your needs and requirements and research the whole of the market, comparing thousands of mortgages for you. We will then make a recommendation as to which lender to choose and which mortgage to apply for.

We will then help you with the paperwork and keep you informed every step of the way.

Decision in Principle

An Estate Agent will ask you for a ‘decision in principle’. This is a written confirmation provided by a lender to demonstrate that you can proceed with a purchase of a property. We can organise this for you and will liaise with the lender on your behalf and we will receive an answer for you, usually within 24 hours.

The Mortgage Application

Once you have put in an offer for a property and the offer has been accepted, we will put together your mortgage application. The lender will carry out an affordability assessment. Lenders will take into account your income, your personal expenses such as credit cards, loan payments dependents and maintenance payments. They will also look at the likely costs of Council Tax, Utility Bills, Phone, Broadband and Insurances. They will have to arrange a valuation report to assess the property for any defects and once this information is available and they are happy to proceed, they will issue you a mortgage offer. This process usually takes around 2 weeks.

The Conveyancing Process

Most people use a Solicitor to prepare the legal paperwork for buying a house. They will look into the history of the property and the immediate area around the property to ensure you are informed as to any potential problems such as environmental issues or restrictions. Once they have made satisfactory enquiries, contracts will be prepared and together with the sellers solicitor they will work towards a mutually acceptable time and date to exchange contracts and set a completion date. This is the day you get the keys to your property. This process can vary depending on the nature of enquiries but is usually 8 – 12 weeks.

Completion Day.

Everyone gets excited on this day because this is the day you get the keys to your new house. The solicitors acting for you will have requested the funds from the lender and once these have been received and the purchase transaction has gone through the bank, the solicitor will advise the Estate Agent. This is called ‘key release’ and you will get a call from the agent to pick up the keys – Welcome To Your New Home.