For your commercial, business, or home purpose, you may need a mortgage to buy a property and there are plenty of mortgage options in the UK. This could be an easy way to get residential or commercial property finance in UK. To take out a mortgage for a new home could be an easy process with the services of a broker, who can help you secure a mortgage loan in the UK. If you are on overseas home owner you may also be able to apply for a mortgage but the terms will vary depending on the lender. Each bank or building society have their own requirements but generally, three things are considered – age, income & job security, and credit score.
Below is a typical mortgage application process for a property in the UK:
1. Search for a lender – You need to find out a good broker who will do the deep analysis and research on all the lenders in the market. A good broker will then come up with the best mortgage plan from a lender. In fact, they will conduct the necessary form filling process too and will also manage the property purchase and if required can also manage a future remortgage. In situations where there is a bad credit score, a good broker will know which options to consider and which lender to opt for. They are known as a specialist for a reason.
2. Manipulate for a Principle – The underlying fact is that you must know the valuation of your property to ask for a certain amount. Lenders may not want to give you the money you are asking for and this is where you need to have a good understanding of market value by showing confidence in your property and the future purpose for which you will be using it. Lenders generally grant an approved DIP (decision in principle) after evaluating your details like – salary, occupation, outgoing payments, deposits, credit history, and other miscellaneous payments. A DIP is given only after you have shown evidence of all these details mentioned above along with other documents like ID proof or proof of residence.
3. Property & Solicitor hunt – Once you get your DIP/AIP, it is then easy getting the kind of property you are looking out for. And for that, you need a solicitor whom you can fully trust.
4. Solicitors – will guide you further in all legal matters. But hold off on paying the solicitors right away until the valuation is approved. In case of any roadblock with the proceedings of the property, this fee to the solicitors will not be refunded.
5. Instruct a Valuation on the Property – The lenders will arrange for a property valuation just to see if their loan is viable or not. You can also instruct your own surveyor to assess the property and show your lenders that their money is not going to waste.
6. Mortgage Offer – If the valuation is deemed suitable by the surveyor and all other required documents are presented, then finally a formal written mortgage offer will be issued in yours and your solicitor’s name. You may gain an offer in a couple of weeks depending on the time it will take to instruct and book the valuation.
7. Instruction from Solicitors – This is the stage when you can pay the fees and start your journey.
8. Contracts and Completion – After the solicitors have drawn the required contracts and received all the compulsory searches back from the local authorities and other sources, you will then sign the contracts. After signing, you will exchange them with your vendor. Now, you are formally confirmed to buy and the vendor is obliged to sell. After this, the money is requested from the lender leading to the completion of the process.
In the future, if you think of remortgaging, then you can use Bridging Finance on a Property.
Here is a list of the essential documents that you will need while applying for a mortgage loan:
• Identity proof like passport or driving license
• Proof of address – where you have stayed for the last 3 months plus the credit card statement, utility bill, and council tax statement.
• Proof of income with the payslips for the last 3 months and P60.
• Bank statement for the last 3 months of all active bank accounts.
• Evidence of deposit like savings statement or gifted deposit letter.
• Credit reports.
• Details of new property like construction material, garage or number of parking spaces, address, the approximate or exact year of building, number of rooms, detachment types, etc.
• Details of your estate agent.
• Details of your solicitor
All this information may seem a bit overwhelming for those who are not much into finances. But if you hire a good broker or financial advisor, they will make this process easier and they could help you get a residential or Commercial Property Finance in the UK for mortgage purposes.