Moving quickly on today’s top mortgage offers
Mortgages are contracts that conditionally and temporarily pledge a property to a lender and obtain an amount of money needed to acquire it. These loans can be structure in many different ways like a 90 ltv (loan to value), tracker, interest only, or fixed rate mortgage, etc. and are available from a variety of lenders (i.e. Abbey, Nationwide, HSBC, Halifax, First Direct.) Depending on a borrower’s financial circumstances, the application process for a mortgage or remortgage may take only a few days. To avoid any long delay, here’s a list of what a borrower needs to expedite his or her application:
● Agreement in Principle – This document, which is also known as an ‘approval’, may be given by a lender or an adviser. It sets out the amount a mortgage provider can lend in accordance with specific terms and conditions. At the moment, this can be accomplished even before a mortgage has been chosen and an offer on a real property has been made.
● Hiring a licensed conveyancer or a solicitor – The main role of a solicitor is to carry out legal paperwork. Though, a mortgage lender usually has a preferred solicitor and may recommend one to a borrower. You can complete the legal requirements yourself if you have basic knowledge of the various associated legal processes.
● Completion and submission of the mortgage provider’s form – Generally, a lender requires information and documents proving the authenticity of a borrower’s income statement, identity, and current address. There are also lenders who require the payment of a non-refundable fee to cover their expenses.
● Reference checks from an employer or bank
● Credit history record that shows the credit status of a borrower, and whether he or she is responsible in paying off his or her debts.
● Property valuation that will be used as a basis for the amount to be borrowed and the associated mortgage rates.
Mistakes to avoid in loan applications
● Overstating income in the hope of getting approved or getting a higher borrowed amount can be financially devastating in the long run. A borrower may be offered a mortgage loan that is more than what he or she can afford. A great way of checking to see if one can afford a loan’s monthly payments is to use an online mortgage calculator.
● If the property appraisal value is less than the agreed purchase price, then the borrower may have problems repaying the full amount of either the property bought or the mortgage loan, unless he or she has financial backup. Though, this can be solved by re-negotiation with the mortgage provider or the seller’s agent or reappraisal of the property.
● Minding only the cost of application can undervalue the monthly budget to be set. A borrower must also take into account the down payment requirement of a mortgage loan provider.
● Deliberately omitting or erroneously answering the questions on the lender’s form may be viewed by the lender as suspicious. Lying about important financial information, such as credit history, may also be considered fraudulent in the UK. This can end up in a court battle as misrepresentation of facts is in today’s law illegal.
● Not hiring a mortgage broker or adviser may prove to be costly for first time buyers and even to buyers who have no in-depth knowledge of mortgage transactions, legal requirements and other necessary documents and methods in mortgage deals. Though borrowers can apply without a broker, having a middleman may prove to hasten the process, make it easier to compare mortgages, and thus are a great way of finding the best mortgage deals possible.