First Time Buyer's Guide To Mortgages

yokozuma

I know this is an absolute basic question to most but I’ve never had anyone explain it to me so please bare with me

Say I have bought a house for £250,000, I paid £25,000 deposit, and over the last two years I have paid £30,000 in mortgage payments. Now I want to sell my house, and buy a new house at £350,000.

How does the money work in relation to selling the old house and buying the new house? Does my deposit and mortgage payments move over to the new house or do I get them back as cash? I have no idea

:huh:

kingstreet

You sell the current property.

Your solicitor receives the sale proceeds and repays your mortgage.

The residue is added to the money from a new mortgage, if you are buying again and the total is sent to the vendor's solicitor to complete your new purchase.

Please start a thread of your own for further information, as this is a thread for First Time Buyers.

yokozuma

kingstreet wrote: »

You sell the current property.

Your solicitor receives the sale proceeds and repays your mortgage.

The residue is added to the money from a new mortgage, if you are buying again and the total is sent to the vendor's solicitor to complete your new purchase.

Please start a thread of your own for further information, as this is a thread for First Time Buyers.

OK, thanks for the help.

thenewbee

Is a Decision in Principle from a mortgage broker worth anything? Or should we get a MIP before moving forwards with an offer?

grifferz

thenewbee wrote: »

Is a Decision in Principle from a mortgage broker worth anything? Or should we get a MIP before moving forwards with an offer?

I thought "decision in principle" and "mortgage in principle" were the same things.

I also thought that you couldn't go one step further and do a full mortgage application without knowing the exact property you were applying for it against, so wasn't wise to do unless you had an offer accepted. Is this not the case?

We made an offer with a decision in principle, got the full mortgage approved 10 days later, and SEVENTEEN WEEKS LATER the former owners were ready to give us the keys.

I would certainly say that having a DIP shows the vendors that you're serious and have a chance of being able to back up your offer without finance falling apart. I'm not sure what more you can do other than be a cash buyer.

thenewbee

grifferz wrote: »

I thought "decision in principle" and "mortgage in principle" were the same things.

I also thought that you couldn't go one step further and do a full mortgage application without knowing the exact property you were applying for it against, so wasn't wise to do unless you had an offer accepted. Is this not the case?

We made an offer with a decision in principle, got the full mortgage approved 10 days later, and SEVENTEEN WEEKS LATER the former owners were ready to give us the keys.

I would certainly say that having a DIP shows the vendors that you're serious and have a chance of being able to back up your offer without finance falling apart. I'm not sure what more you can do other than be a cash buyer.

Really helpful thank you :-)

kingstreet

Be careful. It varies.

L&C works out what it thinks you can afford and calls it a "Mortgage In Principle" or similar, with no credit check.

Halifax does a soft search, affordability check and calls it a "Mortgage Promise."

Nationwide calls theirs a "Decision In Principle" but does a full credit search and affordability assessment.

There is no common term which indicates the reliability of the certificate given. However, of the three mentioned above, the Nationwide's is the one I trust most.

thenewbee

kingstreet wrote: »

Be careful. It varies.

L&C works out what it thinks you can afford and calls it a "Mortgage In Principle" or similar, with no credit check.

Halifax does a soft search, affordability check and calls it a "Mortgage Promise."

Nationwide calls theirs a "Decision In Principle" but does a full credit search and affordability assessment.

There is no common term which indicates the reliability of the certificate given. However, of the three mentioned above, the Nationwide's is the one I trust most.

Thank you. We can't get a mortgage with Nationwide but Halifax is one we're considering so perhaps we should go direct?

kingstreet

They were just examples - not a recommendation!

You get the same value "promise" going direct as you do via a broker.

However, a broker will be able to identify if another lender has easier criteria or a better product for you.

welliesrgreat

Also new to all of this....

I am a teacher ( please don't berate me for this). I am looking for 90% LTV and have my own 10% deposit. I have been through a mortgage broker who has emailed a decision in principle based on 180k mortgage along with a key facts statement which sets out repayments and interest rate. The offer is subject to me providing my last monthly payslip and insurance on the property I wish to purchase. He has told me to go and find a house and then he would search other companies to see if we could get a better deal.

What does a 'decision in principle' and 'key facts' from the Halifax mean? I have checked my credit file and there is a mortgage quotation search from BOS on there; does this mean I have passed their credit check? I have had a perfect credit file for over 3 years, obtained a 6k limit credit card from Halifax earlier in the year and have finished paying 2 barclays loans in the past 6 months.

I was a bit silly with credit when I left uni and therefore worried that this will show up somewhere; although they do not show on my credit expert file. I have one default from nationwide for £306 and this will 'fall off' in 14 months.

Will Halifax do another credit search and will this show up the default? So confused and don't want to set my heart on my first property if there is a chance I will fail at the next hurdle - whatever that is. Are teachers more popular with mortgage companies because of their job security and guaranteed income.

Looking for some reassurance and advice!

Thank you