Get in touch and speak to a whole-of-market mortgage broker today. The experts we work with are all independent whole market brokers with access to mortgage providers both on and off the high street. Call 0808 189 2301 or make an enquiry for a free, no obligation chat. We’ll introduce you to a broker who will answer all your questions and help you find the right mortgage solution at the best available price.
Why use an Online Mortgage Advisor selected broker?
What we do differently
Most mortgage brokers will say they are whole-of-market – some are, and some work from a restricted panel of lenders just big enough to call themselves whole-of-market in the eyes of the FCA. Either way, if the mortgage adviser doesn’t know the market or the lender’s criteria, then there’s little point in having access to it! When an aspiring borrower comes along who doesn’t have absolutely straightforward circumstances, it can be very difficult for them to find a lender who’s willing to approve their mortgage application. This is evidenced every day by the huge number of people coming to us after having been declined a mortgage through another broker. In other cases, people have been offered extortionate mortgage rates, when they would have been eligible with more lenders than their old broker was aware of. Which often leads to more competitive mortgage deals being offered. We work differently, providing free information and connecting customers to the right advice, from an expert broker who deals with the type of mortgage you need every day.
- If you own your own business, we will pass you to a specialist
- If you’ve been bankrupt in the past, we will pass you to a bankruptcy mortgage specialist
- If you are a doctor, we will pass you to a professional mortgage specialist
Concerned about eligibility when you apply for a mortgage?
Are your circumstances a little more complex than usual? The mortgage brokers we work with pride themselves on their in-depth knowledge of the market. If anybody can find a mortgage for you, it’s them. Whether you have bad credit, are self-employed, have just started a new job or are not sure how much you can borrow, you’re in the right hands.
Do you need your mortgage application processing FAST?
The advisors we work with have a red-carpet express service available, and are able to prioritise mortgage applications for borrowers who have had offers accepted on a property and are in urgent need of an approval. Visit our fast track mortgage page to find out more.
The mortgage application process
In order to help give you an understanding of how the mortgage process works, below is a basic timeline of the things you’ll need to apply for a mortgage:
- Find the best lender. A good broker has the training and experience to search the whole market to find you the best mortgage products from lenders available to you specifically. They will complete the mortgage application form on your behalf and manage the property purchase or remortgage throughout. They will explain everything thoroughly from the outset and ensure that the whole process runs smoothly to completion and beyond. If your circumstances are more complex (you have a bad credit history or debts, for example), a truly whole-of-market broker will know which lenders to place you with.
- Get it agreed in principle. This step is predicated on the assumption that you have a rough idea of the property value. If you just want to know how much you can borrow and have no idea of purchase price, make a quick enquiry and an advisor can give you an idea – or use the rough guide affordability calculator. Lenders grant an approved decision in principle (also called a mortgage promise or agreement in principle – AIP) only having assessed your personal circumstances for eligibility – details like your occupation and salary, your outgoings and other financial commitments, the deposit you have available as well as your credit history. An agreement in principle is given on the assumption that all the details given to the lender is supported by the relevant documents needed to verify address, ID, income, etc.We regularly receive enquiries from people who want to get a decision in principle in place before putting an offer in on a house, so that they feel there’s a good chance of being accepted.
- Find the property you want to purchase and a solicitor (not applicable for remortgages). This should be done at your own pace, it’s important that you make a good decision. Armed with your AIP you can make an offer knowing you have the financial backing necessary to buy the property. You will usually offer with the agent directly unless the vendor themselves has active involvement or is selling privately, or if you plan to buy at auction. You can use a local firm of solicitors or find one online, just ensure whoever you select is on the lender’s panel of approved conveyancers – your advisor should be able to help you here. It is recommended that you don’t pay for any fees until the valuation is back in and approved, because if there is something wrong with the property that prevents you from proceeding, or puts you off wanting to buy it, any work carried out by solicitors at this point is not likely to be refunded. If you need to complete within a short time frame (e.g. if buying at auction), then you may need to take more of a gamble and instruct solicitors at this point to save time.
- Instruct a valuation on the property. You won’t need to do an independent valuation by yourself, the lender will always want to value the property themselves as a minimum requirement to make sure the property is worth the value you have offered. They can usually arrange for this valuation to be upgraded to homebuyer report or a full structural survey for you, or you can instruct your own additional survey – just make sure you use a RICS qualified surveyor.If you’re remortgaging and are unsure of the market value of your property, it might be an idea to make comparisons of the market on Rightmove, and get approximate valuations from Zoopla and Mouseprice.
- Mortgage is offered. If the valuation is marked as suitable for mortgage purposes by the surveyor, and all relevant documents are approved (proof of ID, income and address etc.), a formal written mortgage offer will be issued to you and your solicitor. Typically, you can obtain an offer within a couple of weeks, depending on how long it takes to instruct and book the valuation, and is often much quicker. Ensure that you have all relevant documents ready if you want to process your mortgage fast.
- Solicitor Instruction. Now is the best time to pay the upfront fees to your solicitor and get the ball rolling on the various legal searches and drawing up the necessary contracts. This process can be the most time consuming element of a purchase, but can be relatively quick if you are applying for a remortgage.
- Exchange of contracts & completion. Once the solicitors have drawn up the necessary contracts and received all the necessary searches back from the local authority and various other sources, you will be asked to sign the contracts and legally exchange them with the vendor. This will formally confirm your obligation to buy, and the vendor’s obligation to sell. Once this has happened the money can be requested from the lender and once in place can prompt completion. This usually takes a week, however it is possible to exchange and complete same-day if circumstances allow. Once it’s all compete you are given the keys and can move in, or if remortgaging – the money is transferred to the necessary parties.
What you need for a mortgage application
The document you will need include, but are not limited to:
- Proof of ID (passport/drivers licence)
- Proof of address (dated in last 3 months: utility bill, credit card statement or council tax statement – not mobile bill)
- Proof of earnings (last 3 months payslips & P60)
- Full last 3 months bank statements for ALL active accounts (***See criteria below)
- Proof of deposit (savings statement or gifted deposit letter)
- Credit reports (if history of adverse credit – Experian, Call credit & Equifax)
- New property details (address, construction material, approximate year of build, detachment type, garage or number of parking spaces, number of bedrooms/bathrooms/kitchens/other rooms)
- Estate agent details
- Solicitor details
- Bank statements: Following recent Mortgage Market Review updates, lenders now request all bank statements to meet the following criteria:
- A full 3 months – so if up to 01/11/2019, then back to 01/08/2019, with no pages missing
- Identifiable to you – must have your name, address, account number and bank name on
- Online statements – must have identifiable information and ideally the web URL on the bottom. Bank prints – must have identifiable information and a branch stamp and signature, ideally on every page.
Not having the right documents required for a mortgage application will slow your application down, Read our blog post and help ensure a speedy application process.
If you’ve had adverse credit in the past, a good mortgage advisor will want to review your credit reports before doing anything. Doing so will provide them with the same data lenders will be using to assess the application, in terms of the specifics of each credit issue. With the right market knowledge, the best brokers will do their homework before making any sort of application to a lender, and can match your credit history with the criteria of the right lenders. Whenever an initial decision in principle is made with a lender, they perform a credit search on your file. Multiple searches in a short space of time can have a negative impact on your credit score and so it’s essential that there are no unnecessary searches made with the wrong lenders who would never accept an application anyway. The best advisors also know there are 3 main credit reference agencies, and that each lender uses a different one. Because these reports each hold different information and can look different, it’s important to review them all before application to avoid surprises and further unnecessary searches against your file. Sign up for your free trials here
What will mortgage providers look for in my application
In order to calculate the affordability of the mortgage you are applying for, lenders will need to establish what your household income is. Every lender is different in;
- What they ask for
- What type of income they accept
- The amount they will deem you can borrow based on this salary
For example, some lenders expect self-employed applicants to have 3 full years trading, others require only 12 months. Some lenders accept 100% of car allowance, where others only 80% etc. Lenders will also be interested in the type of job you do, and how long you’ve been in the role. They will use this information to establish the risk of the position not being maintained. For instance, those just starting completely new roles in a new company are more likely to be sacked / quit than those who have been established for several years.
Things like credit cards, loans, pensions and even childcare costs come into play here. For example, a car loan for £500 a month will reduce the amount of cash available to pay your new mortgage, so the amount you can borrow will likely be reduced.
Lenders will be interested in how old you are to establish the maximum term you can borrow over. This impacts affordability and thus the total maximum loan amount, because the monthly mortgage repayments are a lot higher for loans paid over shorter periods. For instance, someone on £25k a year may be able to borrow up to 125k over 30 years, but perhaps only £50k over 5 years. Lenders all have a different age they deem acceptable for working and retirement, and a different maximum age they allow borrowers to have the mortgage until. One lender may accept someone in admin may work until age 70, whereas others will limit terms to the state retirement age.
Lenders want to be comfortable that your property will act as suitable security, because it is this they will have to sell to recoup losses if you defaulted on the mortgage. Each lender has their own opinion on what is acceptable, some will consider properties of non-standard construction (i.e. thatched roof / concrete build etc) and some will not, some will accept new build flats, some don’t.
Loan to Value (LTV)
The LTV is the amount you are borrowing compared to the property value. A mortgage of £100k and a property of £200k is a 50% LTV. The LTV is significant because it helps lenders calculate the risk of not being able to recoup losses if the property is repossessed. Obviously a mortgage application of £100k on a property worth £200k is much more likely to cover losses than the same property with a £190k mortgage at 95% LTV. The higher the LTV, the higher the risk, and thus almost always the higher the rate of interest.
Where your deposit is coming from is important. Saving a deposit yourself demonstrates you can be careful and sensible with your money, and that you live within your means. This will stand you in good stead with a lender who is likely to deem you much lower risk than someone always in their overdraft with credit card debt, buying a property with a deposit gifted from parents.
Whether you have had any late payments, mortgage arrears, defaults, CCJ’s, repossessions, bankruptcies, IVA’s, Debt management plans etc, lenders will want to know the date of registration, the amounts, the date of settlement and, sometimes, underwriters will want to know the reasons and background to these issues. The dates are usually the most important piece of information, as most lenders set guidelines on how recent an issue can be deemed acceptable. Some say no issues at all in the last 6 years, some none in the last 3 years, some none in the last 12 months etc. The above factors can all influence which lender will consider your application – it’s not just a case of passing credit score. Which lenders you’ll be eligible for will impact which products are available to you, and to get a competitive mortgage rate, the more the better. A good mortgage broker with a strong market knowledge will establish all the lenders you are eligible with, and then offer you the option to apply with the one offering the best rates and fees. Make an enquiry and we’ll introduce you to one of the expert brokers we work with, ensuring they have experience in helping customers with similar financial circumstances.
Do I need insurance?
Certain insurance policies are mandatory (such as buildings insurance), others are recommended but taken by choice (contents insurance / life cover / income protection / redundancy cover). It is always advised that you search the market for the best deals and don’t just walk into your bank for a policy. Often you can find that prices elsewhere can be far cheaper for the same policy that your bank will offer you in branch. Your advisor should be able to do this on your behalf, so check that they have scope of the whole market before they start any applications. You have to ask yourself how you would afford the mortgage if you were off sick long term? Only get paid for 3 months from work – what happens then? If you have a partner or a family – how would they pay the mortgage to keep a roof over their heads if you were critically ill or died? If you have children – would you like to leave a lump sum to them in the event of you passing away?
Self-employed and buy-to-let mortgage applications
If you’re self-employed or you’re looking for a buy-to-let mortgage, our enquiry form above should cover all of the initial questions needed for the advisor to get you some quotes. Complete the form as best you can and, if any other information is required, they will be in touch with you. Those who work in a freelance capacity and looking for a buy-to-let mortgage may face different hurdles to those in a full-time position. Most buy-to-let lenders will require applicants to have their own income, to evidence that they would be able to cover mortgage payments in periods of no rent. Most buy-to-let borrowers would be expected to have a minimum earnings of £20-25k. This can usually be through self-employment but these lenders often require an average of the last 3 years accounts to exceed this figure so it can be restrictive for anyone trading less than this time or who declares lower net profit. Thankfully, there are specialist buy-to-let lenders who will consider borrowers with no minimum income, just asking that first-time landlords have wages of some sort – experienced landlords are often able to borrow without evidencing any income at all.
When to apply for a mortgage
Knowing when to apply for a mortgage can be key to getting the home you most want. It’s always best to know what mortgage you will be able to get before setting your heart on a property may not be able to get a mortgage on. So, our advice is to get the mortgage in place first! Most borrowers will need to find a mortgage before finding a property – how will you know you are able to buy it, and what the borrowing limits you can afford are? There’s little point putting in an offer on a property if you need to borrow £200k on a £15k annual income. Moreover, estate agents are savvier than ever these days and, in order to ensure all accepted offers have the best chance of proceeding to completion, most agents demand proof of funds and deposit upfront before they take the property off the market. There is so much involved in applying for a mortgage, including getting it agreed in principle, obtaining a valuation and instructing the right solicitor, that applying before you’ve found the right house is not only a time saver but also saves you a lot of stress and, potentially, money. Most people opt to get a decision in principle from a lender to give them the confidence before they start making offers, and this a sensible approach. Having proof of funds at the time of applications puts you in a stronger buying position, and there’s nothing worse than finding the dream home and not being able to get the finance to buy it. A mortgage in principle agreement is a quasi-promise from the lender that they will lend you the money , provided the information you have given is accurate and you can supply the appropriate documentation they require. However, it doesn’t guarantee borrowing, as the majority of lenders will underwrite the case at the time a full application is made, and they can still decline the application at this point despite the initial agreement.
Applying for a mortgage with adverse credit
If you’ve had bad credit in the past and are looking for a mortgage then it might be helpful to review our bad credit criteria tables to get an idea of what’s possible based on your credit history and the amount of deposit you have. Generally, the worse the issue, the higher the deposits required, but you’ll be surprised at what lenders are considering in today’s market, and mortgages for customers with adverse credit are growing in availability. Finding a mortgage with bad credit can often be more difficult, it’s not just a case of searching on comparison tables, clicking on the best deal and filling out your details on the lenders website. The specialists we work with arrange mortgages for people with poor credit in the following situations:
- No credit history
- Low credit score
- Late payments
- Missed mortgage payments
- Debt management Schemes
- And mortgage customers with multiple credit problems
With credit issues, applications are often much more complex and require a higher level of detail when being underwritten. As such, it’s not usually possible or advisable to apply for a mortgage online with bad credit. Every lender is different. Some may accept your credit profile, some may not. As a result, matching you up with a lender that considers your application can be much harder. Luckily, if you still want to apply online you can! The advisors we work with offer remote advice via email, phone and even video calling, and can handle your application from start to finish at your convenience. Many customers love the service because without so much travel there’s more time to help! If you’d rather not make an application, the advisors can offer face-to-face appointments by request in certain areas of the UK.
How will my mortgage application be affected if I have an overdraft?
An authorised overdraft that is dipped into occasionally and repaid may not be a problem with providers. In the same way that a credit card that is used occasionally and sensibly is unlikely to affect a mortgage application, there are lenders who are happy to overlook a responsibly-used overdraft.
Should you go direct to mortgage lenders or use a broker?
This is a question that mortgage borrowers sometimes ask, because naturally people feel it may be quicker, easier, and cheaper to go straight to the source. The truth however, is that the majority of intermediaries help you to save, whether that’s in the currency of time, or cash. The second truth is in most instances you need a broker to find a mortgage with bad credit, as the majority of (if not all) the lenders that cater for adverse credit borrowers only deal through a mortgage intermediary. Brokers offer a professional service and will understandably charge fees, but if you get the best finance possible then it’s well worth it, so trusting an independent to take care of everything is an important part of the process. They not only search the market and match you with the best possible deal, but do pretty much everything for you, managing the application through from enquiry right up to you getting the keys or money in the bank. Remember, intermediaries work for you, not for the bank, and certainly not for the estate agent whose main goal is to sell a house for the highest price in the shortest time.
Speak to an expert
If you want to move quickly with a direct mortgage application or ask a more general question about your options, give us a call on 0808 189 2301 or fill out the enquiry form for a free, no obligation chat. We’ll introduce you to one of the expert brokers we work with, ensuring they have the experience to get you the right mortgage solution at the best price possible, taking all your circumstances into account.