Ask our mortgage advisor: The difficult questions
Buying your first home is a complex process. From saving for a mortgage deposit to finally getting the keys in your hands, there are a number of twists and turns you can take along the way.
We’ve spoken to Adam Todd, a Mortgage and Protection Advisor at The Cumberland, who’s answered the difficult questions that many first time buyers have, but most don’t know who to ask!
What if I change my mind?
“If you have your first appointment with a mortgage advisor, you're not committing to anything at that stage.
When you put an offer in on a house in England (the rules in Scotland are slightly different) you still haven't committed to anything and you can still pull out – for example if you weren’t happy with the valuation results.
Even when the valuation has come back fine, you’ve submitted the mortgage, the mortgage has been offered and the offer is in place for six months – you can still pull out. Any fees paid at this point would be non-refundable, and anything paid to the solicitor as well. But you can still pull out – for example if the solicitor identified a problem with the paperwork.
Exchange of contracts is the point of no return – it means the mortgage is in place and ready to go. Once you've exchanged contracts in England, you’re fully committed to buying the property.”
How long does it really take to buy a house?
“I would generally say two to three months – although the current Covid situation can delay things. We can provide a mortgage offer, as long as everything goes well, within two to three weeks. It depends on how soon a valuation can be done.
The solicitor process can take 8-12 weeks, depending on how soon they can get their work completed, and how receptive the other solicitor is in trying to move the process on.”
Do I really need a mortgage advisor?
“I think a lot of first-time buyers find their appointments really helpful. A lot of them say ‘I didn't know half of the stuff that you just told me.’ And I'm there to keep them updated as we go through the process. They will sometimes have queries like solicitor paperwork where, due to the experience of doing the job, I can help them out.
We will help them through the process and make sure it's done right. For example, a customer will often say I want to pay my mortgage over 30 years because that's what my mum and dad did. Now, mum and dad might be right - but every mortgage is individual to that person's circumstances.
If mum and dad have got five car loans that add up to £2,000 a month then perhaps a 30-year term was better for them. If I've got a customer who's just got an income and no debt or financial outgoings then they could potentially afford to pay that mortgage back faster and save themselves paying interest.”
What should come first - mortgage or house?
“It's good to have a look online at the mortgage calculator, taking a very rough ballpark on how much you can borrow based on your circumstances. You can then go and look at houses.
If you find one to your liking and get an offer accepted at that point you'll need a mortgage in principle and that's when you would need a full mortgage appointment to go through your circumstances.
You don't need a mortgage appointment before you put an offer in on a house but I recommend using the mortgage calculator on the Cumberland website to make sure the houses you're looking at are within your price range. Because you don't want to be looking at £300,000 houses if we can only lend £200,000.
Is there a good way to negotiate the price?
“First-time buyers are in a positive position: they can generally buy houses quickly. They've got nothing holding them back therefore generally people are quite happy selling to first-time buyers because they know their sale will go through quicker than someone who's got a house to sell. So that puts them in a good position to put lower offers in. And unless you put a lower offer in then the seller is never going to offer the house for any less.”
What happens when we put in an offer?
“When you put in an offer and it gets accepted that's when the estate agent generally looks for proof that you can get a mortgage. That's where you'll need an appointment to get a mortgage in principle.
A mortgage in principle means we've gone through your income, your outgoings, and based on what you've told me, you look fine for this mortgage. And we'll give you a mortgage in principle saying you can afford it and they can forward it on to the estate agent. Or we can speak to the estate agents directly.
Once the estate agent has got that, as well as a proof of a deposit, that allows them to take your offer. We would then do the credit search based on the documents the customer has provided and once we're happy we can prepare the paperwork, discuss everything with the customer to submit that mortgage application. That gets checked by head office.
We would do a valuation on the property and as soon as the valuation confirms the purchase price remains the same and there are no issues then we issue a mortgage offer.
At the same time as all of that is going on, you'll have spoken to a solicitor who will have started searches on the property that the mortgage lender requires them to do and once those come back and you've got all the required paperwork signed, you just need to agree a completion date with the other side's solicitor. That's the date that the mortgage money is transferred to the solicitor. The customer sends their deposit to the solicitor as well and that's generally when they can pick up the keys and they've bought the house.”
What might cause a mortgage to fall through?
The seller might decide they don't want to sell the house any more. There could be issues with bank statements, credit searches or the valuation. If you have any queries surrounding this, or anything we’ve mentioned here, please feel free to get in touch.
Looking for some more answers? Check out our article on questions every first time buyer should ask - or use our mortgage calculator to find out how much you could afford.