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Our 10 Step Mortgage & Home Buying Guide for First Time Buyers in Newcastle

Here is a rundown of the 10 steps that make up the mortgage process for first time buyers in Newcastle. This will help you be well-prepared for the journey ahead as you venture into the world of mortgages.

First Step: Get in Touch for Your Free Mortgage Consultation 

So, you’ve made the exciting decision to buy a home and venture into the world of mortgages as a first time buyer in Newcastle. This is undoubtedly one of the most significant financial choices you’ll ever make, and realising the weight of it, especially without prior experience, can be a bit overwhelming.

That’s where a dedicated mortgage broker in Newcastle comes in – to guide you through the process. Our aim is to alleviate your stress and work diligently to ensure that you emerge on the other side with a mortgage and your first home, all while securing a favourable deal.

Upon reaching out to us, we’ll arrange a complimentary initial mortgage consultation with a knowledgeable mortgage advisor in Newcastle. During this session, we’ll gather your information, assess your plans, and kickstart your journey.

Second Step: Mortgage Affordability Assessment – How are you doing Financially? 

During your complimentary mortgage consultation, one of the topics your dedicated mortgage advisor in Newcastle will cover is a mortgage affordability assessment.

In this assessment, your appointed mortgage advisor in Newcastle will review your monthly income and regular expenditures (your typical expenses) to ascertain whether you have the capacity to comfortably manage the monthly repayments for the mortgage amount you’re seeking to borrow.

This evaluation holds immense significance because, prior to presenting your case to a lender, it’s essential that we are confident in your ability to meet the repayments.

This precaution is taken to prevent the potential risk of falling into arrears and the unfortunate prospect of repossession, which both the lender and you would want to avoid.

Typically, the lender conducts their own mortgage affordability assessment. However, our preliminary assessment serves to streamline the process, saving time for the lender, us, and most importantly, you.

This proactive step prevents the submission of an application that could potentially be declined due to affordability constraints.

Third Step: Obtaining a Mortgage Agreement in Principle

Moving forward in your consultation, the subsequent stage involves obtaining a mortgage agreement in principle. If you’ve been delving into mortgage information prior to seeking advice as a first time buyer in Newcastle, you might have come across this step with a few variations in names.

You might have encountered terms like ‘decision in principle’, ‘mortgage in principle’, or the abbreviations ‘DIP’ and ‘AIP’. Rest assured, these names are interchangeable and carry the same meaning.

The purpose behind securing a mortgage agreement in principle is to formalize the fact that you have successfully passed a preliminary credit assessment conducted by a lender.

This assessment can be based on either a hard credit search (which leaves a trace on your credit history) or a soft search (which doesn’t leave any mark).

It’s important to note that while this agreement doesn’t guarantee your mortgage approval, it’s an essential milestone on your journey to securing a mortgage.

An additional advantage is that possessing this document demonstrates to the property seller that you are genuinely committed, potentially opening the door for negotiations on the property price.

Typically, your agreement in principle remains valid for a period of 30 to 90 days, and it can be easily renewed if it expires. Our team usually strives to generate an agreement for you within 24 hours of your initial consultation.

Fourth Step: Finding the Right Solicitor 

After obtaining your agreement in principle, the next step involves securing the services of a conveyancing solicitor, sometimes referred to simply as a conveyancer. This professional will assist you with the legal aspects of the homebuying process.

Conveyancing pertains to the legal transfer of property ownership between parties, whether you’re the buyer or the seller.

Your chosen conveyancing solicitor will manage various tasks, including handling contracts, providing legal guidance if needed, conducting local authority searches, managing land registry matters, and facilitating the transfer of funds required for property payment.

Given the critical role they play, it’s imperative to select your conveyancing solicitor with care.

It’s worth noting that licensed conveyancers are specialists in property matters and may not handle intricate legal issues, while more general solicitors offer a broader range of legal services and might appear relatively more expensive.

Although we don’t offer these services in-house, we maintain a list of trusted firms that your dedicated mortgage advisor in Newcastle can recommend to you.

Fifth Step: Making an Offer on a Property 

Having consulted a mortgage broker in Newcastle, successfully undergone the mortgage affordability assessment, secured an agreement in principle, and enlisted the services of a conveyancing solicitor for the legal aspects, you’re now halfway through the process.

The next step is to submit an offer for the property you intend to purchase. As previously mentioned, armed with an agreement in principle, you’ll be in a favourable position for price negotiations.

While you should avoid making an excessively low offer that might offend the seller, don’t hesitate to propose a lower price that reflects your interests.

With an AIP in hand, the seller is more likely to consider your offer over someone who is willing to meet the asking price but lacks the same level of preparation.

In the event that the seller declines your offer, it’s not the end of the road. This presents an opportunity to explore a more reasonable offer that suits both parties or to consider other property options.

Upon acceptance of your offer, your next step is to reconnect with your mortgage advisor in Newcastle, marking the commencement of the final phase in your mortgage journey.

Sixth Step: Submit Your Documents 

Now let’s turn our focus back to the mortgage process, specifically the vital step of providing the necessary documentation. Given the substantial financial commitment involved, mortgage lenders exercise caution and require thorough verification before extending a loan.

To establish your eligibility, you’ll be asked to furnish a range of documents that verify your identity, income, residence, and financial responsibility. In cases of joint mortgages, both parties will need to provide these documents.

The documentation you’ll need to provide encompasses: proof of identification, verification of your address, your most recent three months’ payslips and latest P60 (if employed), evidence of earnings and Tax Year Overviews for the past three years (for self-employed individuals in Newcastle), confirmation of any additional income like state benefits or maintenance, substantiation of your deposit, and your bank statements for the last 90 days.

Seventh Step: We’ll Progress Your Mortgage Application 

With your mortgage agreement in principle secured and your offer on a property accepted, the next step is to move forward with submitting your complete mortgage application.

Having meticulously reviewed and prepared all the necessary documents, your dedicated mortgage advisor in Newcastle, along with their team of skilled mortgage administrators, is ready to compile and send off the application to the lender.

This involves sending all the collected supporting documentation, and then it’s a waiting game for the lender’s response, indicating whether the application has been approved or declined.

While there’s no fixed timeframe, our proficient mortgage administration team can actively follow up with the lender to expedite the process for you.

Eighth Step: Property Valuation / Survey 

In the interim between submitting your mortgage application and receiving an offer, the lender typically arranges a valuation survey of the property. Accredited firms, chosen by the lender based on their trustworthiness, usually conduct these surveys.

The aim of this survey is to ascertain the property’s true value in relation to the agreed purchase price. If you’ve agreed to pay more than its market value, the lender might hesitate to accept, since they could face financial loss in case of payment defaults, unable to recover the full loan amount.

This scenario is commonly referred to as a ‘Down Valuation’. Different types of property surveys are available, varying in complexity and cost. Some assess solely the property’s value, while others provide insights into structural issues and potential repairs needed in the future.

Your mortgage advisor in Newcastle can guide you in choosing the most suitable survey for your situation.

Ninth Step: Receiving Your Mortgage Offer 

The long-awaited moment arrives when your mortgage lender completes their assessment of your case and the supporting documentation, resulting in the issuance of your mortgage offer.

At this juncture, our friendly team of mortgage advisors and administrators in Newcastle, who have supported you throughout the process, will review the offer to ensure its accuracy and alignment with your needs.

Once the mortgage offer is in your hands, your conveyancing solicitor takes over to navigate the final steps toward property ownership.

Tenth Step: Completing The Process 

Congratulations! From being a first-time buyer in Newcastle, you’ve successfully transitioned into a first-time homeowner. With the majority of stress now behind you, we hope you’re excited and prepared to embark on this new chapter in your new home.

Now, it’s simply a matter of collecting the keys and making the move. We trust you found value in interacting with our team and receiving swift and amiable mortgage advice in Newcastle.

If you opted for a fixed-rate mortgage, as your term approaches its end, we’ll be there to assist you again, ensuring a smooth transition with your remortgage in Newcastle!

Date Last Edited: August 11, 2023

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