When buying a property, one of the most important things an estate agent will require is proof that you can actually afford to purchase the property. Usually this evidence is required early in the process and it can be via any legitimate source (ie it DOES NOT have to come from the agents internal mortgage advisers). In most cases the initial confirmation will be in the form of a decision in principle (DIP) from a mortgage lender which is where all your details have been input on to the lenders systems, a credit search completed and, subject to normal underwriting, the lender (based on the information provided thus far) has agreed to lend you the money to assist with the purchase.
The next step, once you have had your offer accepted, is to fully apply for the mortgage. This will include the lender underwriting your mortgage application, reviewing payslips/accounts, bank statements, ID and other documentation as required. The lender will also move to instruct the valuation. This is where a surveyor will go out to the subject property and confirm it is suitable security for mortgage purposes , fundamentally acting as the lenders eyes.
Once the lender is happy with the underwrite and the valuation, a mortgage offer is issued and a solicitor appointed to deal with the legal process through to completion.
In the main the process is pretty straight forward, but it can be daunting . You should be prepared for any lender to request as much information on you as possible . This enables them to make an informed decision whether or not to lend you such a large amount of money. The lender may also calculate that you can afford the mortgage over the next five years, as they anticipate rates may rise!
Finally, make sure you ask questions and are comfortable you understand everything you are signing. As you would expect there is quite a lot of paperwork involved in the mortgage process and it can be quite a read! However, this is the biggest debt you are likely to take on. Some rates will have early redemption penalties to change or switch products, so you need to get it right first time. Don’t be shy to ask and if in doubt, seek independent advice.