Impatient to get your house sale moving? The key is to get your mortgage in place early on - here's how
Buying a home is amongst the three most stressful life events, along with death and divorce.
The average transaction in England and Wales takes 22 weeks – a timescale which can put many people off.
So, we strongly advise, to improve the process, the seller kicks off the conveyancing process on ‘Day One’ of marketing the property.
Meanwhile, at the same stage, the buyer should already have seen a mortgage adviser to obtain a Decision In Principle (DIP) before viewings take place.
This way both buyers and sellers can make a big difference to their progress from here onwards.
If you are a seller, your role here is quite straightforward. For buyers who need a mortgage the next steps can be a bit more complex, so here’s some more about what you need to do…
Buyers: Finding out how much you can borrow
First and foremost, if you need a mortgage to purchase the property, you should find out if you are eligible for one and how much you can borrow.
This should be done as early as possible in the process, ideally before you start looking for properties or conducting any viewings.
A mortgage adviser will look at your budget and discuss how much a mortgage is likely to cost each month; they will ensure you are happy committing to this and identify the remaining amount of disposable income.
They will then research the market for the most appropriate option and get a quick decision from the lender, known as a decision in principle (DIP), which will indicate whether or not the lender is happy to provide the loan you need.
The mortgage adviser will then submit the application to the lender, working with both you and the lender throughout the process.
Why is a decision in principle so important?
If you don’t do this, you could find yourself in position where you could be looking at unaffordable properties you simply cannot buy, especially in this current volatile interest rate environment.
Many prospective buyers do not realise is that their financial commitments, such as car finance, student loans, credit cards, childcare costs will impact how much they can borrow and the choice of lender, as will any form of credit blip.
The type of property you wish to buy can also impact the choice of lender, as different lenders have a different approach to construction type, property use and freehold/leasehold.
Buying a home – a few things to be aware of
It’s important to note, while many estate agents may accept the online DIP as proof of you are mortgage-ready, there can be many reasons why a purchase can be delayed or fall through during the legal process.
For this reason, it makes sense to appoint a solicitor, or conveyancer, as early as possible. You can avoid stress and can save money, if any problem is found early enough.
During these uncertain times with fluctuating interest rates, taking some control of the buying process by seeing a mortgage adviser as soon as you know you wish to buy a home will be very beneficial and can prove the difference to buying your dream home and not.
This article was written by the Home Buying and Selling Group (HBSG), who are representatives from across the industry working together to find ways to improve the process for home movers when buying and selling their property. https://homebuyingandsellinggroup.co.uk/
