You Were Accepted for a Mortgage, Great! Now What?
Buying a house is an incredibly complicated and stressful process if you’ve never done it before and is something that no one can really prepare you for. While the steps are simple in theory, you’ll often find that there are just more things to do than you were prepared for and that there are always little things that can go wrong.
Once you have been accepted for your mortgage for instance, it can be tricky to know what to do next. How do you actually get the money? Where does the solicitor come into it? What is the timescale?
Let’s break it all down…
When you apply for your mortgage you should already have a mortgage in principle. That doesn’t mean that things can’t still go wrong though. First, you’ll need a more in-depth credit search which can bring up problems that the initial credit check did not. Next, your bank will carry out a survey on the property in order to ensure that it’s worth roughly the value that you’re paying for it. This can take a week or more and usually you’ll be billed for it. If that all comes back okay though, then you’ll be given your official offer which you can sign and send back.
Dealing With the Solicitor
But you still don’t have the mortgage yet! This is the point at which your solicitor will take over and handle communications with the bank on your behalf. They will very likely ask for more information regarding your finances – such as proof that you have the money for the deposit. They might also need to see a ‘trail’ to prove that the money really is yours and that it comes with no strings attached. If you were gifted this money by parents for example, they might need to visit your solicitor to show where they got the money from. It can be a little stressful and invasive but unfortunately it’s a requirement.
Once this has all been handled, you’ll then be required to pay 10% of the value of the house (in most cases). This is true even if your deposit is 15%. Note that transferring this amount of cash can take a long time, so you may want to speak to your bank early on. You’ll pay your solicitor though, not the bank.
The Mortgage Deed
Next you’ll receive your mortgage deed in the post. This is another contract, this time transferring interest in real state to the mortgage. It basically means that the loan is secured against the value of the property and that the bank can repossess your home if you fail to pay them. Sign this and send it back.
Exchange and Completion
Next comes the exchange of contracts with your vendor. This means both parties have signed the contract that transfers title deeds to you and at that point, you should have a completion date set in stone. This is the date at which you will move.
Some time prior to completion, you will then need to send any remaining deposit as well as the solicitor fees to finish the purchase. Once this is done though, you can finally go and collect your keys and enter your new home!