How Does the Mortgage Application Process Work?
When you apply for a mortgage. it is not a forgone conclusion that you will be offered one.
A lender will assess each application according to their lending criteria. These vary from lender to lender, but typically take into account the amount you want to borrow, the property in question, your credit history and your employment status. Lenders do this to satisfy themselves that you will be able to repay your mortgage.
If the lender is initially satisfied with your application, they will first provide you with an agreement in principle. This provides confirmation that they are willing to lend to you and will allow you to book a specific mortgage product.
When your formal application is made, and you
have met all of the lender’s requirements, you will then be made a formal offer. If you accept, then this will be sent to your chosen solicitor as confirmation that the lender will provide the money when the time comes to exchange contracts. The offer may be made on condition that you immediately take out buildings insurance for the property that you propose to purchase, so that you are covered should something happen that will affect its value.
Your involvement with the lender should now be at an end. If your solicitor is satisfied with the mortgage offer, then contracts can be exchanged. This is followed by the completion day, when the property is finally yours and you can move in.
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