Thankfully we’re here to remove the uncertainties and help you in every way that we can. It’s what we do. Here’s our complete guide to the first time buyer mortgage process.
As a first time home buyer, getting together a deposit can take a lot of willpower and sacrifices along the way as you build up enough savings to secure a mortgage. Even if you already have some money put aside or some generous relatives to help you, saving for a deposit can seem tough.
You are going to need to save at least 5% of the cost of your first home and it’s worth remembering that the more that you can afford to put down for your deposit, the less you'll need to borrow from us, which is going to save you money in the long term. If saving over a longer period, you might consider making use of our savings accounts to gain interest on your savings.
It’s also important to set expectations of the type of property you are looking for and what is available in your price range. Try making separate lists of essential elements, such as 3 bedrooms or proximity to schools, and of luxuries that would be nice but you could live without, such as a garage.
Our mortgage calculator might help at this stage as a guide to the amount of mortgage that you could possibly apply for, and what your payments might be.
You’ve done the hard part- now its time to see how much we can lend you. In your first appointment with us, we take details about your income and outgoings to give you an idea of how much we can lend you. We can issue you a ‘decision in principle’ (sometimes called a mortgage in principle or agreement in principle), meaning you’re then ready to go ahead and arrangement some house viewings.
Your decision in principle is valid for 3 months so plenty of time to search for you dream home. If you haven’t found your perfect home within the 3 months, don’t worry, you can contact us and we can issue you a new one.
You’ve looked around and fallen in love with your dream home. To put an offer in, you need to call the estate agent selling the property and tell them you would like to make an offer, and how much you’d like to make an offer for.
Something to consider: Research the price of similar houses in the area on sites such as Rightmove and Zoopla, where you can also check how long the property has been on the market. If it’s been on a while, then the seller may consider a lower offer. Consider your position as a first time buyer as a very positive one as you’re not waiting for your house to be sold so you can move in swiftly – this can be a real plus.
Once your offer has been made, the estate agent will discuss it with the sellers who may accept, or you might be invited to make a higher offer. Upon acceptance, the estate agent will want to see your ‘decision in principle’ before they take the property off the market
Great news! You’ve had your offer accepted on your dream home, and you’re ready to get the ball rolling. It’s time to arrange a second call with us, so that we can discuss the best repayment method, term & product for you. This call gives us the opportunity to discuss how the process works, and what monthly repayments will be. We know this part can seem daunting, which is why we are always on hand to answer any questions that you have- big or small. This is also the point where you must instruct a solicitor to begin the legal work.
Our mortgage advisors will request your documentation, which is normally the last 2 months bank statements payslips (or the last 2 years tax calculations for self employed income). They’ll let you know exactly what they need and the best way to send it across.
We will carry out an up-to-date credit search and will use this is part of our review – at The Cumberland we consider each application individually, there’s no ‘computer says no’ with us!
If you are taking out a mortgage that will last later into life then now might be the time to consider a life insurance policy so that you’re covered should the worst happen.
All our mortgages are subject to underwriting and valuation. Our underwriters review each application individually and confirm that everything looks good to go. Following this a valuation of the property takes place to confirm that the home is worth what you are paying for it, and that there are no major problems. We offer a basic house valuation at this stage but if you require a more in-depth structural survey then you can arrange this separately.
Once your application has been processed, and the valuation is returned, you will receive a mortgage offer. This means that your mortgage has been agreed and your solicitor can proceed with the legal work. We will post you out a copy of the mortgage offer, and we also ensure that the solicitor has access to a copy too. It’s important that you check over the mortgage offer and make sure that all the details are correct. The mortgage offer is valid for 6 months, which should give the solicitor plenty of time to get things ready for completion. You may hear the legal work being referred to as ‘conveyancing’ – this is the legal term for transferring ownership of the property into your name.
With everything moving along, you will hear the terms ‘exchange’ and ‘complete’.
This covers you if the building is, for example, flooded or damaged before the day of completion. If you aren’t insured, you won’t be covered. (If you’re buying a new-build property, the insurance doesn’t need to come into effect until the day of completion.)
Completing the process is the final part. This is when your mortgage provider supplies the remaining funds for the purchase and on an agreed date you are able to collect the keys to your new home. The completion date can be any time after contracts are exchanged and is mutually agreed by all parties. Sometimes it is the same day, but your solicitor will confirm this for you.
The exact process for completion can differ between England and Scotland but your mortgage advisor will be happy to assist with any questions.
Remember to give yourself enough time to pack up your belongings and acquire any essential furniture or items you might need and arrange transport for the big day.
As soon as you know your completion date, you should notify your utility companies or set up with new ones to avoid being without essential services. This goes for your internet and television providers too. In addition, you need to inform anyone you regularly receive post from of your new address – for example doctors, dentists, service providers and the DVLA, if you hold a license. You can also set up a temporary divert of any mail via Royal Mail.
If you’ve made it through the entire property purchase journey – congratulations! We hope you enjoy spending time in your new home and making it your own. Please remember we’re always here for you, so if you have any questions or queries then feel free to get in touch.