What is the Mortgage Process When Buying a Home for the First Time?

Buying your first home is an exciting milestone, but the mortgage process can feel complex if you are new to it. Understanding each stage in advance will help you navigate the journey with confidence and avoid any unexpected delays. Here is a clear step-by-step guide to what happens when securing a mortgage as a first-time buyer.

Assess Your Finances

Before speaking to a lender, take time to review your financial position. This includes checking your credit score, calculating your income and outgoings and working out how much you can realistically save for a deposit. Most lenders require a minimum deposit of five per cent, although a larger amount can secure better rates. Having a clear understanding of your affordability will help you set a realistic budget for your property search.

Speak with a Mortgage Broker

A mortgage broker can be invaluable for first-time buyers. They can assess your circumstances, explain the types of mortgages available and search the market for competitive deals. A broker can also help you understand important terminology such as fixed rate, tracker, loan to value and affordability criteria. If you need expert guidance, you may wish to consult a professional service such as Everest Mortgages.

Get a Mortgage in Principle

A mortgage in principle is a statement from a lender confirming the amount they are likely to lend you based on basic financial checks. It is not a formal offer, but it strengthens your position when viewing properties because sellers can see that you are a serious buyer. Estate agents often ask for this document when you make an offer.

Make an Offer on a Property

Once you have found a home you want to buy, you can put forward an offer through the estate agent. If the seller accepts, the legal and mortgage processes can begin. At this stage, there is still no binding contract, so either party can withdraw if necessary.

Complete the Full Mortgage Application

Your broker or lender will now submit a full mortgage application. This requires detailed evidence of your income, spending, identification and deposit. Lenders analyse this information to ensure you meet their affordability criteria. It is important to provide accurate and complete documents promptly, as this will help keep the process on track.

Mortgage Valuation and Underwriting

After receiving your application, the lender will instruct a valuation to confirm that the property is worth the amount you intend to borrow. This is for the lender’s security rather than your protection as the buyer. Alongside this, an underwriter will assess your financial documents and the valuation report. If everything meets their criteria, the lender will approve the mortgage.

Receive the Formal Mortgage Offer

Once the lender is satisfied, they issue a formal mortgage offer. This is a legally binding document that outlines the terms of your mortgage. You should review it carefully and discuss any concerns with your broker or solicitor.

Conveyancing and Completion

Your solicitor will carry out searches, review contracts and liaise with the seller’s solicitor. When both parties are ready, contracts are exchanged and a completion date is agreed. On completion day, your lender releases the funds to the seller and you can collect the keys to your new home.

Navigating the mortgage process as a first-time buyer may seem daunting, but understanding each step helps make the experience smoother and more manageable. With preparation, the right support and clear guidance, you will be well on your way to owning your first home.