So what’s involved in getting a mortgage?
STEP ONE: Agreeing a price
When your price is accepted it is not binding until contracts are exchanged, which means that someone else could have a higher offer accepted (gazumping) at any time until then.
In Scotland the rules are different. A normal case involves a property being put up for sealed bids, to be made by a due date, all of which are binding. Buyers make suitable survey and mortgage arrangements and make a bid on that basis. The seller then chooses a suitable bid and the deal is binding. (The highest offer may not win, as the seller may accept a lower offer from someone who binds to complete in a short time. Sometimes other conditions may be stipulated by the seller, or offered in the bid ).
Caution should be taken with regards to auction properties, and we would recommend seeking legal advice as well as mortgage advice well in advance of any auction.
STEP TWO: Getting the mortgage
The usual requirements are for:
- A regular income in a permanent job
- If you’re self-employed, 3 years’ accounts to prove earnings.
You should be able to get a mortgage of up to 95%, up to a limit of 3 times salary.
If you don’t fit into either of these categories, then you should be talking to Amazing Mortgages. It’s likely you’ll need a deposit of at least 25%.
The value of the house is considered to be the purchase price or the valuation – whichever is the lower.
The lender will organise a survey to satisfy themselves on the value of the security. If the property is old, of unusual construction or possibly in need of repair, you should commission a structural survey.
STEP THREE: Conveyancing
You will need a solicitor to do the conveyancing and searches. Their job is to ensure that the property does not have any nasty surprises, ( e.g. the isolated dream cottage where title does not allow for access for services like electricity and plumbing, or someone else has rights to part of the land, or that there are restrictions on building extensions and garages etc.).
The solicitors fee will include elements for the charges levied by the various governmental departments involved.
Who’s who and what they do
The solicitor acts for you on the legal side.
The estate agent is interested in selling properties. As such he normally has access to a wide range of lenders and can make all the mortgage arrangements. Most of them are tied to one insurance company however which limits their ability to provide a fully competitive service.
The bank or building society. Going direct is normally a waste of good shoe leather as the offers are normally the same as those available through other sources, and you only see a very small number of the options. Most are also tied to one source of insurance and this again can cost over the odds.