Get Smart About Mortgages
While it may seem like it at times, mortgages are not a rocket science. Mortgages are not rocket science. Banks, however, tend to make a relatively simple process into a complicated, jargon-heavy transaction that can leave you feeling lost and overwhelmed. Vestpod interviewed mortgage adviser Andrew Montlake and got 10 hands-on tips to make sure every mortgage application is as quick, painless and easy as it should be.
1. Make sure you’re creditworthy
A mortgage adviser can carry out a credit check for you, or you can go online and some companies, such as Noddle, will offer you a free report.
2. Carefully choose who you want to work with
You can research the different ways of finding a mortgage lender yourself, however if you want professional advice, you can speak to a mortgage adviser.
3. Secure an Agreement in Principle before finding your dream home
There is nothing worse than finding your dream home, only to find that you can’t afford it. To make sure you have the best chance of securing your home, we suggest that you secure a mortgage Agreement in Principle (AIP). This will confirm in writing how much a bank will be prepared to lend you. This also confirms to the home-seller that you are a serious buyer.
4. Ready for your mortgage?
You’ve found your home! Great, now what? Banks will want full details of your employment, your existing loans or credit cards, bank account details and of course full details of the property you want to buy. At this point, some lenders may take a non-refundable “administration” fee.
Firstly, the bank will check all the documentation you have sent them (pay slips, bank statements, accounts, etc.), and they may also find some further information that they want clarification on. If your preparation has been right, however, this stage can be very quick. Secondly, they will need to carry out their own valuation on the property (which you will need to pay for); they will look at the overall condition and marketability of the property and then produce a valuation figure.
6. The Mortgage Offer
Once underwriting has been successfully completed, finances have been checked and the valuation figure is acceptable, the bank will produce a full Mortgage Offer which will be sent to both you and your solicitors. This will detail the amount to be loaned, the full monthly payments and terms of the loan. It will also detail any special conditions that need to be met by you and/or your solicitor.
Once the solicitor receives the full mortgage offer they will complete a “Report on Title”. This will include looking at Local Authority Reports, checking that the lease is all in order if the property is leasehold, and answering any specific questions the bank may have raised. Once complete this is then sent to the bank to review.
Dependent on the work required by the solicitor, a mortgage transaction from beginning to end averages around 4 to 6 weeks. The more efficiently presented your mortgage application is, with the full set of required documents prepared in advance, the quicker this process can be - even 7 days with an efficient adviser by your side.
9. Protect your home
Once the property is yours, it is very important that you consider whether you will be able to keep your home should anything unfortunate happen. Life cover should be considered and written in trust and you will need to arrange buildings and contents insurance ready for exchange.
10. Exchange and Completion
Once the bank, solicitor home-seller, and you are all happy an exchange and completion date is set. Exciting! After the exchange date is set, neither the buyer or seller can pull out of the transaction without a large bill. In other words, the property is yours! The completion date is when you receive the keys and start moving those boxes. At this point, don’t forget to enjoy a nice glass of something cold and sparkling.
*This is not a sponsored post*
Credit image: Unsplash / Tyler Handy.
WRITTEN BY ANDREW MONTLAKE
Andrew started in the mortgage industry in 1994 at John Charcol before joining Cobalt Capital in 2001. There he was responsible for successfully growing the Cobalt brand from scratch as Head of PR and Marketing.
In 2009 Andrew was one of the main founders of The Coreco Group where he is the Director responsible for the strategy around Brand, Marketing and Communications, as well as looking after all lender liaison.
As Coreco’s Media Spokesperson Andrew can often be seen or heard on BBC TV & Radio or Sky News as well as regularly commenting in the national, local and trade press.
More commonly known as "Monty" he is the author of a highly acclaimed Mortgage Blog and writes the Market Watch column in Mortgage Strategy.
Winner of several industry awards including “Mortgage Strategist of the Year” in 2006 and “Mortgage Personality of the Year” in 2008 at the Mortgage Strategy Awards. He picked up the award for "Best Press Spokesperson" 2011 at The British Mortgage Awards, showing that Coreco is a respected voice in the industry and beyond. He also won the “Best Marketeer” gong at the 2014 British Mortgage Awards repeating this accolade in 2016.
Andrew is also a proud Board Member of the Association of Mortgage Intermediaries, (AMI) working to “promote the provision of good advice as an essential part of a healthy market for mortgages” and as a cheerleader for the Mortgage Industry as a whole.
Andrew continues to work at the coal face, writing mortgage business and advising clients.
He still clings tenuously on to his rock star dream singing in a dad rock band, playing football at a very low level and writing songs and silly stories for his young children.