We regularly receive calls from potential first-time buyers to say they’ve seen their dream home and need to get an agreement in principle to start the ball rolling.
An agreement in principle is that all important piece of paperwork that demonstrates to an estate agent that you’ve been through the required credit checks to prove that you’d be eligible to purchase your desired property.
The first steps
If you’re a first-time buyer, what would we suggest that you do? Sam Tudor is one of our Mortgage Specialists. He says: “Firstly, give us a call. We’ll usually spend around half an hour to find out a little more about your situation and offer some basic advice. It’s a no-obligation conversation, but would be the start of the process, should you want to appoint us to act on your behalf.
“If you decide to become a client, further conversations would focus on helping you to think about how much it would cost you to move, how much deposit you have and therefore how much you can afford in total.”
A realistic view
Official figures from the Office for National Statistics confirmed that the average house price in the UK has risen above £250,000, plus there’s the additional cost of around £2000 for solicitors’ fees, broker fees and survey fees. It’s these additional costs that are often overlooked, so we’ll take you through an affordability calculation process, which will not affect your credit score.
As a rough guide, lenders will offer around 4 to 4.75 times your combined annual income, which can be used to determine the types of properties within reach. During the affordability calculation process, we also consider committed outgoings, such as car finance and personal debt, as this can have an impact on what the banks are willing to lend.
Mortgage in principle
Once these initial checks are completed and an application for a mortgage is considered feasible, our team can proceed to completing a full credit check. It’s worth noting that any adverse credit in the last three years could be an issue when applying for a mortgage and a larger deposit may be required. The huge advantage of having us assist with this process is that we can review all options and ensure that you’re fully informed about the feasibility of your desired purchase.
Following the credit score, we’ll arrange a formal meeting with you and usually, within 24 hours of this meeting, you’ll be issued with a Mortgage in Principle certificate. These are usually valid from 30 days to 3 months and will allow you to start looking at properties, with the peace of mind that you can act fast on the property that you really want.
Preparing for the unexpected
Our team will also talk to you about other products such as mortgage protection and life insurance, which will help you to pay your mortgage if something unexpected happens. Given that a mortgage is a long-term credit agreement, this is incredibly important – although it’s often overlooked. Sam explains: “Our team has a strong knowledge of all the products on the market – it’s what we’re here for. Ultimately, our service is totally impartial, and we would never force you to take out any additional cover. However, it’s our duty of care and part of our customer service to ensure that you’re aware of all the protection that exists and how important it could be.”
Taking the strain
Our team has a strong success rate in obtaining mortgages in principle due to diligent paperwork handling and practice in checking all of the finer details, as seen through the eyes of a prospective lender. If, for example, you’re a contractor or self-employed, you may need some additional support in finding the right lender.
Another benefit of working with us is that we’ll liaise with the estate agent and lender, taking a lot of the stress off your shoulders. We’ll simply ask you to review and sign the paperwork at the appropriate time. For some further information on the process, there’s more from our Office Manager, Victoria Pitts in our recent article.
If you’re currently looking to embark on the incredibly exciting adventure of buying your first home and think you could do with some extra help to ensure you have the best possible chance of success, call us today and chat to one of our advisers.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.