First-Time buyer process decoded: UK Mortgage

Host: Hall of FaceTime Buyers, this is the video you’ve been looking for! In today’s video, we’re going to talk about the 10 simplest steps that you can follow when getting a mortgage.

Getting a mortgage can be a very tedious and intimidating process if you don’t know what to do. To guide you through this process, we have the one and only Iftikhar Muhammad with us.

Q: How are you, Iftikhar?

A: Hi, I’m very well, thank you. How are you doing?

Host: I’m really good, Iftikhar.

Step 1: Understanding Affordability

Q: What’s the first step that a first-time buyer should be aware of?

A: A lot of first-time buyers come to us saying they’ve made an offer on a property, but the bank can’t accept it because they can’t match the affordability. The first thing a first-time buyer should do is to work out their affordability.

Many first-time buyers go to estate agents and make offers on properties they can’t afford — that’s not a good start. Before making any offer, you need to know how much you can actually afford.

Step 2: Factors Affecting Affordability

Q: What are the factors that affect the affordability of a first-time buyer?

A: The main thing that banks look for is your income. They’ll review your payslips to determine how much you earn because that decides how much mortgage you can get.

They’ll also look at:

• Financial commitments: such as school or nursery fees if you’re a parent.
• Loans and credit cards: large balances or monthly payments reduce your affordability.
• Age: the older you are, the shorter the mortgage term available (usually up to age 70).

So, the younger you are, the better your affordability — but older buyers can still apply; they’ll just have shorter terms.

Step 3: Checking Your Credit File

Q: Once affordability checks out, what is the next step in the process?

A: Once you know you can afford it, it’s important to check your documents, especially your credit file.

You might earn enough and have manageable commitments, but issues like not being on the voters register can hurt your credit score and affect your mortgage.

So, download your credit file and speak to an advisor who can review it for you and guide you accordingly.

Step 4: Getting a Decision in Principle

Q: If someone has a good credit score, how can they move on with the process?

A: If you’ve got a good credit score, you’ll likely pass the lender’s checks — but you should still get a Decision in Principle (DIP).

A DIP means the bank agrees in principle to lend you a certain amount. It can be arranged through a mortgage broker or advisor and helps show estate agents that you’re a serious buyer. Many agents won’t show houses without a DIP.

Step 5: Finding and Making an Offer on a Property

Q: When they find a property, what should buyers be aware of?

A: Once you find a property, make sure it ticks most of your boxes. You may not get everything — for example, a big garden or proximity to a station — but make sure the key needs are met.

After that, you can make an offer. In the current market, people often ask for discounts (5–10%) depending on the area. Always try to negotiate — you might not always get it, but you won’t if you don’t ask.

Step 6: Checking Rates

Q: When should a first-time buyer check their mortgage rates?

A: Only after your mortgage offer is accepted.

Checking too early doesn’t make sense because rates may change or your offer might not go through. You can compare rates at the beginning just for an idea, but the real rate applies once you make the mortgage application.

Step 7: Preparing Documents for Application

Q: During the mortgage application, what documents should a first-time buyer have?

A: Before applying, make sure you have all your documents ready.

If you’re employed, you’ll typically need:

• Salary slips
• Personal bank statements
• P60 (tax certificate)
• ID and proof of address

If you’re self-employed or on a contract, requirements differ — always confirm with your mortgage advisor beforehand.

Step 8: Handling Application Issues

Q: What happens if something goes wrong during the mortgage application?

A: Issues can be technical or related to something the bank doesn’t like.

If it’s technical, your mortgage advisor can often resolve it directly with the bank.

If it’s due to income type (e.g., bonuses), the bank may decline or adjust the loan amount.

A good broker will try to fix it or look for an alternative lender — there’s usually another good option available.

Step 9: The Survey Process

Q: What is a survey, and what types are available?

A: Once your application is done, the next step is a property survey. There are three main types:

• Basic Survey: Done by the bank (sometimes free or low cost).
• Home Buyer Survey: Uses a traffic-light system (Red = Serious, Amber = Needs attention, Green = Fine).
• Structural Survey: Most detailed and ideal for older properties.

Choose based on the property’s age, cost, and your comfort level.

Step 10: Understanding the Role of the Underwriter

Q: Who is an underwriter and what is their importance?

A: An underwriter is the person who checks your documents on behalf of the bank.

Mortgage brokers review documents first, but only the underwriter can approve and sign off the loan. They ensure everything meets the bank’s criteria before granting the mortgage.

Step 11: Receiving the Mortgage Offer

Q: What happens once the lender agrees to lend the money?

A: Once you receive your mortgage offer, it means the bank is ready to lend, subject to no major changes (like losing your job).

If your circumstances change, you must inform the bank — otherwise, they can withdraw the offer.

Step 12: How the Money Is Released

Q: Once you receive the offer, how can the first-time buyer withdraw that cash?

A: You don’t receive the cash directly. The bank sends the money to your solicitor, who then pays the seller’s solicitor.

The money never goes directly to the buyer. Before releasing funds, the bank and solicitors verify all special conditions are satisfied.

Step 13: Solicitor Searches

Q: What happens after the offer is issued?

A: After receiving the offer, solicitors take over.

They perform property searches, usually after the mortgage offer is issued (though some start earlier). Once results are ready, they send you a report to confirm you’re satisfied before moving forward.

Step 14: Exchange and Completion

Q: What is the last step in the mortgage process?

A: There are two final steps:

Exchange:

Once everyone (bank, solicitor, buyer, seller) is satisfied, your solicitor asks if you’re ready to exchange.

Exchange is the point of no return — once you commit, you can’t back out.

You’ll pay a 10% deposit at this stage (unless your mortgage is 5% deposit).

If you back out after exchange, you lose your deposit.

Completion:

The completion date is when funds are transferred, and you receive your keys.

Congratulations — you officially own your new home!

Closing

You just watched the first-time buyer mortgage process simply explained by Iftikhar Muhammad.

Host: Thank you very much, Iftikhar.

Iftikhar: You’re very welcome, thank you.

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This is Vedara, signing off from WIS Mortgages, Accountancy, and Insurance.