The Mortgage Process
No two cases are quite the same, but if proceeding via a mortgage broker, the typical process is as follows:
Enquiry
Either face or face, over the phone or via TEAMS, your mortgage broker will discuss your requirements and build your case notes.
Research
Sourcing software and an understanding of the market and lending criteria enables the mortgage broker to build a shortlist of prospective lenders. This step often involves conversations with Business Development Managers representing the shortlisted banks and building societies to determine the most suitable and competitive solutions. Affordability calculators may be run to determine lending potential.
Illustrations
When the research is complete and the broker has confidence the case is going to be a good fit for the shortlisted lender(s), your personalised illustrations are shared, usually in writing via email. This email will also contain the brokerage’s terms of service and the documents required to build your file for an Agreement in Principle and subsequent Application.
Packaging
Once a broker has received the requisite items and saved these securely, they will check against the lender’s packaging requirements to ensure everything required for the application is on file. Some items such as bank statements and payslips need to be the most recent at the point of application, so in some instances a broker may reach out for additional items nearer to the point of application. You will usually indicate your desired illustration at this stage.
Agreement in Principle (AIP)
Sometimes called a Decision in Principle (DIP). This is the lender’s provisional acceptance of the loan applied for. Most lenders will run a soft credit search at this point. Some lenders do not have a formal AIP/DIP Phase, so in these cases a broker may reach out for credit reports and run the lender’s affordability calculator. If/when an AIP is accepted, most lenders produce an AIP Certificate to share with the client. For buyers, this often acts as proof of funds for the estate agent or developer.
Full Application
For purchase applications, once a formal offer is accepted, a broker will look to proceed to a full application. At the point of full application, a hard footprint is left on your credit file. The application is submitted and items are uploaded in support of the application. Underwriters will assess the application and revert to the broker with any further requests for information and/or documentation. Some lenders instruct the valuation at the point of application, others instruct the valuation once underwriting has been passed. Where a valuation fee is involved, it is quite usual for the survey to take place after underwriting is cleared.
Offer
All being well, a formal mortgage offer is achieved. The broker will share a copy of this via email. The conveyancers will also be sent their version and will be in touch regarding next steps.
Post Offer
Conveyancers conduct searches and make enquiries. This stage can often take a number of weeks and is dependent on external factors, for example whether there is a chain. Conveyancers will liaise with all parties to set suitable exchange and completion dates. Funds are released on the date of completion.