A decision in principle may also be referred to as an agreement in principle. This is simply confirmation from your chosen lender that they could be willing to lend a certain amount, subject to their final checks. This step can give house hunters the confidence to start their search and even put in an offer on a home. After securing a decision in principle, these are the next steps.
The original documentation will be gathered, reviewed and certified by your lender.
Your lender will check affordability once again. The lending criteria and market position research will also be revisited to ensure nothing has changed since the initial decision in principle.
We have relationships with excellent conveyancing solicitors. If you choose to work with our solicitors, we will instruct them to begin the conveyancing process.
The client valuation will be confirmed. This is an essential step for the lender to confirm that the house is worth what you are willing to pay for it.
You may need to provide credit or debit card details for certain upfront costs. This included lender charges, applications and survey fees.
Your lender needs to meet you in-person, or via a video call. This is to check your identity and to ensure you are who you say you are.
The full application will now be submitted to the lender and reviewed by an Underwriter. They may need to carry out additional checks, including credit checks. Your credit score will be checked again to ensure you haven’t made any large credit applications between the decision in principle and the full application. You will also be checked against a Sanctionlist for politically exposed persons. Internet searches may be carried out on your employer to determine the company size and position. If you are self-employed, the Underwriter may check for any information held at Companies House.
This will typically happen in the first five days after submitting your mortgage application. A good mortgage broker will anticipate the information and prepare the relevant documentation for when it is requested. If there are additional documents required, we will contact you directly.
If you choose to use our conveyancing solicitors, we will provide them with ID and proof of address on your behalf so that they can begin work.
In nearly all cases, the lender will instruct a surveyor to view and appraise the property. This helps to protect them in the event they have to repossess the property. They will also address the value of the property and the potential rental income if it is a buy-to-let property.
Some mortgage providers will instruct this survey once the application form has been received while others will wait until further through the process.
The surveyor will contact the person who can provide access to the property. When purchasing a new property, this will often be the agent. If remortgaging, you will be the point of contact.
After a surveyor’s visit, you can expect the written report to be delivered in 24 to 48 hours. This will join the pipeline of documents to be reviewed as part of your application.
If the report is unclear, the lender may ask for further information which can delay the application. If the report uncovers issues such as damp or damage to wood, this may trigger further checks and the lender may request a “timber and damp report”.
Once all documents have been checked and the Underwriter has all of the information required to make a decision, they will either make a formal offer to lend or reject your application. If your application is more complex or if the value is high, a Senior Underwriter may be called in for a second opinion.
Your lender will provide a legal document by email and will send an enhanced version to your solicitor in the mail. This letter will outline the conditions to be satisfied. You may also receive a copy of the valuation, but this isn’t guaranteed.
Your mortgage broker’s job is now complete and your solicitor will be your main point of contact. They will give you details on the completion date, when funds will be released and when you will get the keys.
Many lenders required insurance as part of the mortgage application process. Your life cover should be placed “on risk” by the exchange. You may also be responsible for building insurance. We can provide advice and support on insurance companies and how to arrange the right level of cover for each stage.
On the completion date, you will have the keys and will be ready to move into your new property. In the case of remortgaging, the lender will change and the funds will be released.
Your solicitors will register your ownership with the Land Registry
If you need help securing a decision in principle, get in touch with Niche Mortgage Info. We provide bespoke advice for individuals with unique mortgage application needs.