Mortgage application process

Roonie2710

Hi, I am seeking a little guidance on the mortgage application process. Me and my partner have just obtained our mortgage in principle, yay, first hurdle jumped!

However I am now a little bit confused and concerned about the next step. We have a couple of property viewings lined up. However my first question is when making an offer on a property how long does it take from submitted the MIP to the actual mortgage application process? Does this take place after the surveys etc? Does it make a difference if you're buying into a chain or awaiting for the sellar to purchase a property?

My second question is regarding the application process itself. My partner and I have been advised that we will need to submit 3 months bank statements to the lender. What is looked at on our bank statements by the lender? I only ask because over the last couple of months I have slightly dipped in my overdraft but paying it back in the next couple of days. Is this likely to result in a rejection by the bank?

Me and my partner also pay a set sum to a different account each month (the account is in my partner's name). The amount in this account covers all monthly outgoings including the joint credit card (used for day to day purchases i.e. groceries), rent, bills etc. Does it matter to the bank how you go about your day to day managing your accounts? I assume the lender will need to see proof of all our joint account managing.

Hope someone cn she some light on all of this.

Many thanks.

G_M

Best advice? Go the library and borrow a book (free!) on property buying - it will answer this and 100 other questions as you progress through the process!

Once your offer is accepted, you put in a formal mortgage application. The lender will arrange a Valuation, and you can choose to have a survey done, either at the same time, or independantly if you prefer. In parallel you select a conveyancer (unless you decide to do this yourself), ideally NOT one recommended by the seller's estate agent, and instruct them to do the legal work for you.

Your bank statements are needed to verify your income, and help identify payments for loans etc which all impact on your ability topay the mortgage.

WATTY1978

we got a mortgage in principle in a few days once we found a property. the full application took place over the phone a day later. the mortgage offer was confirmed four weeks later.

the banks seem to be really strict. more than when i did this eight years ago. they asked me to complete a budget planner and went through every detail and questioned expenditure and commitments.

we have no credit or loans. only borrowing £70k and from our existing lender. no previous issues paying and they still picked at my wage slip showing two days sick?!?!

Just be prepared to explain everything and really think about your budget before proceeding.

hope it works out ok.

Roonie2710

Thanks for your reply. However although I note what you say about researching etc I have already undergone hours of research but can't find the answers i'm looking for especially with the second and third points raised .....

My second question is regarding the application process itself. My partner and I have been advised that we will need to submit 3 months bank statements to the lender. What is looked at on our bank statements by the lender? I only ask because over the last couple of months I have slightly dipped in my overdraft but paying it back in the next couple of days. Is this likely to result in a rejection by the bank?

Me and my partner also pay a set sum to a different account each month (the account is in my partner's name). The amount in this account covers all monthly outgoings including the joint credit card (used for day to day purchases i.e. groceries), rent, bills etc. Does it matter to the bank how you go about your day to day managing your accounts? I assume the lender will need to see proof of all our joint account managing.


Any help would be much appreciated. Thanks

Ciderarmy1987

Roonie2710 wrote: »

Thanks for your reply. However although I note what you say about researching etc I have already undergone hours of research but can't find the answers i'm looking for especially with the second and third points raised .....

My second question is regarding the application process itself. My partner and I have been advised that we will need to submit 3 months bank statements to the lender. What is looked at on our bank statements by the lender? I only ask because over the last couple of months I have slightly dipped in my overdraft but paying it back in the next couple of days. Is this likely to result in a rejection by the bank?

Me and my partner also pay a set sum to a different account each month (the account is in my partner's name). The amount in this account covers all monthly outgoings including the joint credit card (used for day to day purchases i.e. groceries), rent, bills etc. Does it matter to the bank how you go about your day to day managing your accounts? I assume the lender will need to see proof of all our joint account managing.


Any help would be much appreciated. Thanks

As far as I am aware each lender will have different conditions on what is acceptable and then these will be different at different deposit percentages even with the same lender.

If you are really concerned about all of this the best thing to do would be to speak to a mortgage adviser.

Maybe try looking at this as well
http://www.moneysavingexpert.com/mortgages/mortgage-guide

Hope this helps

The_Palmist

WATTY1978 wrote: »

we have no credit or loans. only borrowing £70k and from our existing lender. no previous issues paying and they still picked at my wage slip showing two days sick?!?!

your wage slips shows your sickkies?

The_Palmist

Roonie2710 wrote: »

My second question is regarding the application process itself. My partner and I have been advised that we will need to submit 3 months bank statements to the lender. What is looked at on our bank statements by the lender? I only ask because over the last couple of months I have slightly dipped in my overdraft but paying it back in the next couple of days. Is this likely to result in a rejection by the bank?

Me and my partner also pay a set sum to a different account each month (the account is in my partner's name). The amount in this account covers all monthly outgoings including the joint credit card (used for day to day purchases i.e. groceries), rent, bills etc. Does it matter to the bank how you go about your day to day managing your accounts? I assume the lender will need to see proof of all our joint account managing.

Hope someone cn she some light on all of this.

Many thanks.

Slightly dipping in overdraft shouldn't be an issue. Keep in mind it all depends massively on how much deposit you have and LTV.

On your statement they will be looking for proof of regular income i.e. salary, wage etc.

How you manage your accounts is not an issue, as long as you have all the statements and are not in debt. Clearing credit cards at the end of every month is not the same as being in debt.

All said who knows what the computer decides to say on your day and good luck.

Ciderarmy1987

WATTY1978 wrote: »

we got a mortgage in principle in a few days once we found a property. the full application took place over the phone a day later. the mortgage offer was confirmed four weeks later.

the banks seem to be really strict. more than when i did this eight years ago. they asked me to complete a budget planner and went through every detail and questioned expenditure and commitments.

we have no credit or loans. only borrowing £70k and from our existing lender. no previous issues paying and they still picked at my wage slip showing two days sick?!?!

Just be prepared to explain everything and really think about your budget before proceeding.

hope it works out ok.

What LTV were you looking at 95%?

kingstreet

The two items mentioned will not be an issue. Irregular overdraft use is fine, within limit and as long as there are no unauthorised borrowing charges.

You can shift your money around as you like.

Do not apply for a mortgage until your vendor has found a property, had an offer accepted and the chain has "formed." Instruct a solicitor, ask them to open a file and await your further instructions. That way you can give your solicitor's details to the EA when your offer is accepted.

House purchase process runs like this;-

Offer agreed
Solicitors instructed
Sales memorandum issued by agent
Purchaser applies for mortgage
Vendor's solicitor prepares and issues draft contract
Vendor completes seller's enquiry forms and returns to solicitor
Valuation/survey carried out
Purchaser pays solicitor for searches
Searches requested
Renegotiation of price due to survey findings - if required
Mortgage offer issued
Purchaser's solicitor receives seller's enquiry forms and raises any enquiries
Searches returned
Responses to enquiries
Purchaser visits solicitor to go through paperwork, hand over ID and deposit
Completion date agreed between all parties
Contracts exchanged
Completion takes place.

The order might be a little out in one or two places and some things can take place concurrently, rather than consecutively to save time.

WATTY1978

The_Palmist wrote: »

your wage slips shows your sickkies?

yeah why wouldnt it? it just shows sick pay. dont think thats unusual but other companies might not. local authorities usuall have to account for everythinv like that.

WATTY1978

Ciderarmy1987 wrote: »

What LTV were you looking at 95%?

Nope 40% actually which is why i was so surprised at the lengthy process. its a solid house and very little risk for them.