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Our 10 Step Mortgage & Home Buying Guide for First-Time Buyers

As a dedicated mortgage broker in Derby, it’s always our goal to keep people informed, up-to-date and prepared for what lies ahead on their journey. In this article we have compiled an authoritative list of the 10 steps involved in the mortgage process for First-Time Buyers in Derby, so that you to be as “Mortgage Ready” as possible.

There are 10 steps in the process of buying a home and obtaining a mortgage;

  1. Free Mortgage Consultation
  2. Mortgage Affordability Assessment
  3. Agreement in Principle 
  4. Find A Solicitor
  5. Make an Offer
  6. Submit Your Documents
  7. Formal Mortgage Application
  8. Valuation/Survey
  9. Mortgage Offer
  10. Completion

First Step: Get in Touch for Your Free Mortgage Consultation 

After careful planning and consideration, you’ve now decided you’re going to jump in at the deep end and purchase a home, taking out a mortgage as a First-Time Buyer in Derby. We can almost say for certain that this is going to be one of the biggest financial decisions you ever make. Upon realising this, the anxiety can kick in, especially when you have no experience doing anything like this.

It’s at this point where a dedicated mortgage broker in Derby can jump in and start to guide you through the ensuing process. We always strive to take the stress away from you, working hard and doing our very best to ensure you come out the other side with a mortgage and in good spirits, ready to move into your new home.

Once you Get in Touch with us, we’ll be able to get you booked in for a free initial mortgage consultation with one of our very experienced and caring mortgage advisors in Derby. Here we’ll take some information from you and look at what your plans for the future are, before getting started on your mortgage process.  

Second Step: Mortgage Affordability Assessment – How are you doing Financially? 

During your free mortgage consultation, your dedicated mortgage advisor in Derby will be able to run through a Mortgage Affordability Assessment with you. This process is fairly quick, and is where your dedicated mortgage advisor will go through your monthly income with you, looking at your regular expenditures (what you spend your money on), to get a good idea of whether or not you have the financial means to afford the mortgage amount you are looking to borrow.

It is very important for us to do this before presenting you to a lender, as we will need to have confidence that you can definitely afford your monthly repayments. This will help you avoid the risk of arrears and any future repossessions that may potentially occur, something the lender will really want to try and avoid themselves if they can help it.

A Mortgage Affordability Assessment will also usually be undertaken by a lender, so checks we take out initially will help save the lenders time, our time and more importantly your time, from an application that may be declined later down the line if you happen to fail on affordability.

Third Step: Obtaining a Mortgage Agreement in Principle

Once we’ve done this, the next step in your consultation will be to help you obtain a very important and useful document called a Mortgage Agreement in Principle. If you’ve been doing any research on mortgages prior to receiving First-Time Buyer Mortgage Advice in Derby, you may have seen this mentioned with various names, including ‘Decision in Principle’, ‘Mortgage in Principle’, as well as the abbreviations ‘DIP’ & ‘AIP’. The only difference between these is the name; they are the same thing.

The reason a Mortgage Agreement in Principle will be essential in your process is because it provides a record that you have passed a lenders initial credit scoring system, either by that lender performing a hard credit search (which will leave a footprint on your credit file) or performing a soft credit search (which does not leave a footprint on your credit file).

You’re still not guaranteed to be accepted for a mortgage, but this is a necessary step on your way towards your end goal. Another benefit to you having this document, is that it will show the seller of a property that you are very serious, possibly creating room for price negotiations with them when it comes to making an offer.

Usually you’ll find that an AIP will last somewhere between 30-90 days. If your Agreement in Principle expires before you are able to use it, it can be easily renewed. Our team of expert mortgage advisors can usually get one of these turned around for you within 24 hours of your initial free consultation.

Fourth Step: Finding the Right Solicitor 

After you have gotten yourself Agreement in Principle, it’s on to finding yourself a Conveyancer to provide assistance with the legal proceedings of the homebuying process. The term Conveyancing is the name used for the transfer of legal ownership of property between two different parties, whether you’re the buyer or seller.

Your Conveyancing Solicitor will be able to deal with contracts, give any required legal advice, conduct local council or authority searches, help sort out with Land Registry arrangements and finally the transfer of the funds you have acquired in order to pay for the property you are looking to purchase. As you can clearly see, this is a hugely important role in your mortgage process, so you must carefully make your choice.

Something else important to remember here, is that Licensed Conveyancers are property specialists and can’t deal with complicated legal issues, whereas a more general Solicitors will be able to offer you a full range of services, so can often appear to be more costly. Whilst we do not offer these services ourselves in-house, we have a list of trusted companies that we will gladly be able to refer you out to, if you ask us for this.

Fifth Step: Making an Offer on a Property 

At this point in your story so far, you’ve spoken to a Mortgage Broker in Derby, passed the Mortgage Affordability Assessment, gotten yourself an Agreement in Principle and found yourself a suitable Conveyancing Solicitor to help process the legal side of your purchase. This means you’re almost at the finish line! The step that will follow is for you to make an offer on a property!

As mentioned earlier on, with an Agreement in Principle in hand, you will be in a far better spot to start negotiations with the seller regarding the price of the property. Make sure not to insult the seller with an offer that is too low, but in the same breath, don’t be afraid to ask for a lower price. Knowing you have an AIP to hand, the seller will be more likely to accept your slightly lower offer than an offer from someone who is willing to pay the asking price but hasn’t even begun to prepare themselves for a mortgage.

At the end of the day, the worst thing that can happen is the seller might say no, but it’s at that point you can work out a more reasonable offer for both of you or take a step back and find yourself a different property with a price that is within your range. Once your offer has been accepted, it’s back to your mortgage advisor and onto the final stretch of your mortgage process.

Sixth Step: Submit Your Documents 

The step you’ll be moving onto is an important one, as you’ll be submitting the required documents to go forth with your mortgage. As you might have expected when such a large amount of money is involved, a mortgage lender will be very picky as to who they are willing to lend to and rightfully so. There are various notable instances in the past where they were a little more lax on the rules and things didn’t work out too well.

Your mortgage lender will need you to present them with various documentation to prove that you are the right person to lend to. They’ll need to see the amount you earn from your current career, where your current residence is and how well you conduct your finances on a monthly basis. If you’re obtaining a joint mortgage, they will require this same documentation from either person involved with the purchase of the property.

The types of documents you will be required to submit to the lender include; proof of identification, proof of address, the last 3 months’ of your pay slips and latest P60 (employed), the last 3 years’ proof of earnings and Tax Year Overviews (if you are Self-Employed in Derby), proof of any income such as state benefits or maintenance, proof of deposit and the last three months of your personal bank statements. 

Seventh Step: We’ll Progress Your Mortgage Application 

When your mortgage has been agreed in principle, and you’ve had an offer accepted, we can now proceed to submit your full mortgage application to the lender. With everything readied and checked by your Mortgage Advisor in Derby & their team of Mortgage Administrators, we are ready to submit an application to the lender and await confirmation that you’ve (hopefully!) got your mortgage.

Your mortgage advisor in Derby will send off all the collected evidential documentation for this, and then all that is left is to wait for them to respond with either an accepted application or one that has been declined. Whilst there is no given time frame, our Mortgage Administration team will be able to chase the lender for an answer on this for you, until we have a clearer answer for you.

Eighth Step: Property Valuation / Survey 

In-between the point of submitting your mortgage application and being offered a mortgage, the lender will require that your property have a valuation survey undertaken. These are usually carried out by accredited companies nominated by the lender (someone that they will trust to do this).

The reason they do this is to understand how much the property is truly worth overall, compared to what you’ve agreed to pay for it with the vendor of the property in question. If you’re paying above what it is deemed to be worth, the lender may be less willing to accept your offer. The reason for this is because they will most likely be out of pocket and unable to make back the amount that they had let you borrow if you happen to fall gain any debt at any point. This is usually referred to across the mortgage world as a ‘Down Valuation’.

There are various types of property survey available, with each of these varying in price. Some will just want to take a look at how much the property is worth, whereas some will also provide information on any issues with the structure that you should look into, as well as possible repairs that you may need to keep an eye on for in the future. Your Mortgage Advisor in Derby will be able to advise on which one may be right for you.  

Ninth Step: Receiving Your Mortgage Offer 

Now it is time for the moment you’ve been preparing for all along. Your mortgage lender has checked over your case and performed an assessment of all the documented evidence. Once this is completed, they will be able to present you with your Mortgage Offer.

Our team of friendly Mortgage Advisors and Administrators in Derby, that you’ve no doubt gotten to know quite well over the course of your process, will check over the offer on your behalf to ensure everything is correct and right for what you wanted. Then after your mortgage offer has been received, it’s down to your Conveyancing Solicitor to take your purchase from there, all the way through to the point of completion.

Tenth Step: Completing The Process 

Congratulations, you’ve now officially graduated from the point of being a First-Time Buyer in Derby, all the way to being a full fledged First-Time Homeowner in Derby! You can hopefully now rest assured that any of the previous anxieties and concerns that were bothering you before, are now in the rear view mirror. We sincerely hope you are happy with your new home and ready to begin your new life and bright future.

All that is left for you to do is go get your keys and begin the process of moving in all your belongings! From the bottom of our heart, we hope you received a fast & friendly Mortgage Advice service in Derby and enjoyed speaking to our team throughout your journey to becoming a homeowner. If you have chosen a fixed rate mortgage, at the end of your term, we will Get in Touch once more to help out with your Remortgage or any other future property plans.

Derbymoneyman.com & Derbymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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