Welcome to the next stage of the buying a home journey! Have you read part one already? It’s all about saving for your first home. Today I’m talking about seeing mortgage advisors and getting your offer through.
Let’s assume you’ve reached your savings goal – you’ve got enough for a deposit and a little left over for fees. Now it’s a pretty good time to see a mortgage advisor.
What does a mortgage advisor do?
A mortgage advisor (sometimes called a broker) will help you find and apply for a good mortgage.
They’ll ask you a few questions (what you’re looking for, your salary, your situation, your savings) and then get to work, scouring thousands of deals to find you the best one. They’ll help with paperwork and answer whatever questions you have, whenever you have them.
Do you have to see a mortgage advisor?
Nope! It’s not a necessity. But honestly, I can’t imagine how much more difficult this process would have been with my mortgage advisor holding my hand through the process.
Plus, she got me a far better deal than I’d have found on my own. Since I’m buying alone, every pound counted to help me buy the best property I could.
How much do they cost?
It varies, but mine was £395 (and you only pay once you actually buy a property). I think that’s a pretty good deal, seeing as I bothered her with questions for months on end! (She also kept me on track and organised with my paperwork and next steps, which really helped. I’m naturally a bit of a lazy procrastinator.)
So, what actually happens?
After an initial chat with my mortgage advisor on the phone, she got to work looking for deals.
We chatted through the difference between fixed-rate mortgages (where you pay the same amount for a certain number of years) or variable-rate mortgages (the amount you pay changes with the ups and downs of the market).
We also talked about mortgage length – it’s no longer all about the standard 25 years. Her advice was to get as many years as you can – you can always decrease the number of years but it’s really hard to extend them.
Within a couple of days, my mortgage advisor came back to me with a couple of options. We had a clear favourite. (Fixed-rate. 35 years.)
Next, she needed documents (there’s a lot of documents in this process!). These were:
- my last P60
- my last three months of payslips
- my last three bank statements
- a PDF of my credit report
- a photocopy of my passport.
I was weirdly nervous about these. What if they took a look at my bank statements and said: ‘HAHA! She cannot be trusted with a mortgage! Have you seen how much she spends on ASOS?’
But I worried for nothing (as usual) – my mortgage advisor said I seemed an ideal candidate and said everything should be straight-forward. And so far, it has been.
All this paperwork was to get me a ‘mortgage in principle’ (also called an agreement in principle). This is essentially a mortgage provider going: ‘Yeah, Nikki sounds legit. Here’s a piece of paper to say we’ll give her £150,000 [or whatever the amount might be] if she finds a flat she likes’.
Once you have a mortgage in principle, you’re very attractive to sellers. (That’s what my friend used to say to me, in soothing tones, when I got stressed about paperwork.) She was right, though. It means your finances are shipshape and ready to go!
And as a first-time buyer, you won’t have a chain (i.e. no property to sell first) – so you’re doubly attractive. ‘Buying a place will never be this easy again,’ everyone sighs at me.
With your mortgage in principle all sorted, the ‘fun bit’ can begin: organising flat viewings! (Personal tales coming to you in part three.)