Once the survey is complete you may want to go back and renegotiate the price of your new home. There are two reasons for this:
It's this stage in the process that is often most stressful. Delays and problems can arise from a variety of situations, such as:
When problems crop up, it's worth making the effort to stay in touch with the seller via your solicitor and estate agent. It's often possible to rescue the situation by keeping the lines of communication open.
If everything has gone according to plan, contact your lender or mortgage adviser to proceed. There is often a fee, usually called an arrangement fee, to set up the mortgage.
This can be added to your mortgage, but if you choose this option bear in mind you'll pay interest on it for the length of the mortgage. Typical cost: £0- £2,000.
Your mortgage lender must give you at least 7 days, once a binding mortgage offer has been made to think about if this is the right mortgage for you. You can use this time to compare this offer with other mortgages.
If you're sure that this is the right mortgage for you, you can let them know sooner that you want to go ahead.
If your mortgage application has been declined, it's important to look over what you can do to improve your chances for next time. But don't rush off to another lender as each application could show up on your credit file. Use the checklist below to see why your application might have been turned down and what you can do to increase your chances next time.
Check your credit file with the credit reference agencies (Experian, Equifax and CallCredit) to see what information they have about you. If any of the information on your credit report is wrong, you can correct it.
You need to be on the electoral register at your current address so lenders can confirm who you are and where you live. It's quick and easy to do online or through your local council.
When you apply for credit, the lender will search your credit report to check your suitability. Most searches are recorded, leaving a footprint on your credit history. Repeatedly applying for credit makes it look like you have problems, so try to avoid taking out new credit deals three to six months before you want a mortgage.
Any payday loan you've had since 2011 will be listed on your file, even if you've paid it off on time. It is still counted against you as lenders may think you won't be able to cope with the financial responsibility of having a mortgage.
Lenders aren't perfect. Many of them put the details from your application into a computer so you may have failed because of a mistake. Ask for an interview to discuss your application.
Some lenders prefer to lend to a specific demographic. An independent mortgage adviser has experience of the market and a better idea of the type of borrower that lenders want.
Three out of four borrowers are accepted for a mortgage (Source: Intermediary Mortgage Lenders Association)
You have to prove you have a steady income by showing tax statements and business accounts for at least the last two to three years. You might also have to prove you have work secured for the future - but that is a decision that will vary from lender to lender.
Most lenders are unwilling to lend to new arrivals, but not all. You'll need to show your employment contract and a visa, which proves you have permission to live and work in the UK.
A professional mortgage broker or independent financial adviser who specialises in mortgages will have regular dealings with a wide selection of lenders. They will be aware of what different lenders require before offering a mortgage, and will speak to the lender on your behalf.
It is better to pull out rather than risk buying a property, which may cost you more than you can afford in the long run.
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