A clear five-step walk-through of the residential mortgage process, from agreement in principle through valuation and formal offer to the day you collect your keys.
When buying a property there is a lot to consider. As well as finding the right home, making an offer and having it accepted, you also have the legal paperwork, the mortgage application and the moving arrangements to think about. It can feel like a lot to keep track of.
As specialists in our field, we arrange hundreds of mortgages for our clients every year, so we thought it would be helpful to explain how the process actually works. The route for a buy-to-let property is slightly different, so this guide focuses on the process for a standard residential purchase, set out in five steps.
A mortgage agreement in principle (AIP), sometimes called a decision in principle, is a document stating how much a lender would potentially loan you based on an initial review of your circumstances. It also shows estate agents and sellers that you are a serious buyer when you start viewing, which can strengthen your position when you make an offer. An AIP generally lasts for around 90 days.
To produce one, a lender will typically look at:
If you are not sure how much you could borrow before this stage, our guide on how much you can borrow on a mortgage is a useful starting point.
Once you have had an offer on a property accepted, you can begin the full application. This is where the lender reviews your circumstances in detail, alongside the property itself. At this stage your broker submits the formal application to your chosen lender and supports the underwriting checks that follow.
Your lender will carry out a mortgage valuation and survey on the property you are buying, which generally requires a surveyor to visit. The purpose is to confirm that the property is worth what you are paying for it and that it is structurally sound, so the lender knows their loan is properly secured.
A lender's mortgage valuation is for the lender's benefit, not a detailed condition report on the property. Many buyers choose to arrange a more thorough homebuyer survey or building survey separately for their own peace of mind.
Once the lender has completed its checks, it will issue a formal mortgage offer confirming the amount it is willing to lend you. This offer tends to last between three and six months, and within that time the necessary legal paperwork is completed so the sale can go through.
If your sale does not complete by the mortgage offer deadline, you may be able to extend the offer by requesting this through your broker. An extension can involve some additional checks and fresh paperwork.
When your sale is ready to complete, your conveyancing solicitor uses the money received from the mortgage lender, along with your deposit, to pay the seller's solicitor. As soon as those funds are received, you will be able to collect your keys and get started with the move.
As you can see, there are several distinct steps, but the process is relatively straightforward, especially with a broker guiding you through each one. If you are buying for the first time, our first-time buyer mortgage guide walks through the wider journey in more detail.
If you are buying a property and have any questions, we are happy to help. Speak to an adviser who will guide you through every step, from agreement in principle to collecting your keys.