Mortgage Process

[ParentLookingforHouse]

Dear Moms,
Since I would like to understand how mortgage works for first time buyer in uk(residents for past 2 years).
When I visited one of developments, sales person said that I might lose my deposit if contracts not exchanged within 4 weeks viz not my fault if delay from solicitor side.

I have couple of questions.

1. Do I need to speak to first mortgage advisor or financial advisor before viewing?
2. How does house buying process works?

First viewing , then mortgage advisors, then solicitors(within 6 weeks contract to exchanged), then Bank? or

1. I can simple ask the Bank? I heard when paying deposit Bank Says that we can offer you loan. Later, they might create problems? Is it true? Please explain in detail since I am very new in this process.

So you can go have a look at a new build development.

Most of them will have either an advisor present or will be able to give you the contact details for one they work with. You speak to the mortgage advisor, they go through your income, payslips, bank statements, do a credit check and will give you what is called a “Decision in Principle”. That’s essentially a piece of paper which says “you can get a mortgage for £X based on info provided”.

As long as that shows you can get a mortgage for the value of the house you want, you can then reserve your home. You pay a reservation fee to the new build (usually £150 ish), and then upon exchange of contracts you pay deposit. HOWEVER with newbuilds you usually only pay £1000 deposit at this time, not your full house deposit.

Once you’re reserved you instruct a solicitor to do the legal bit, searches etc, pay for those, and then mostly you just wait until completion.

You can just go to your bank for a mortgage if you want to do that, however that may mean you don’t get the best offer. Your bank can only offer you THEIR products, whereas a Mortgage Advisor can access the whole market and find you the best possible deal on your mortgage.

To add, your mortgage provider will also do a valuation of the house before making official mortgage offer. For newbuilds this is typically a desktop valuation rather than in person as most of the time at the point of mortgage the house is just a pile of dirt not yet built.

Thanks a lot, much appreciated.
HOWEVER with newbuilds you usually only pay £1000 deposit at this time, not your full house deposit. - they are asking 10 % of total house price during exchange of the contract.
I would like to know if there is any delay from solicitor side, do people tend to lose their deposit?

On exchange of contract 10% of the purchase price is needed. New build developers always push for a quick exchange but it's not always possible if if the legal stuff is not completed. Usually as long as you can show it's not you holding things up, they will wait for you, as long as you are doing everything within a reasonable timescale.

Dear,
a couple of more asks please?
I have booked the apartment now. Mortgage advisor has made application to Bank 2 days ago while got contract copies from solicitors however both mortgage advisor and solicitor are Developer recommended ones and I chose them to avoid delays.
Since I haven't got any mortgage offer yet, when to pay deposit amount (10%- 45k).
I am bit paranoid until mortgage offer is made, I should hold deposit since most of the legal terms in contract are usually from Develpers perspective very less on Buyer. perhaps standard process here.