Mortgages Explained Part 3 - TMP The Mortgage People

The final push…

This last explainer guide is all about the final stages of the process - the super exciting bit that will get you in through the door of your new home!

What is a mortgage offer?: This is what we’ve been working towards!

Your mortgage offer is the formal approval for the loan you have requested. Please remember though, it’s only valid if your circumstances don’t change, and until a specified date.

Check your offer as soon as you get it, if you spot a mistake after you move in it will be too late. We’ll check it our end too, as will your solicitor.

Solicitors – what do they do?: Your solicitor will explain everything to you, just remember to ask them anything you’re unsure about.

Solicitors are there to make sure your purchase goes through legally and accurately for you. They will go through a process called conveyancing to make sure there are no nasty surprises in your lease or for your property, such as flood risks or chancel repair liabilities (an ancient law that relates to maintaining the nearby church!).

They will also be responsible for transferring the money on the big day.

Should I hand my notice in on my rented property?: Your solicitor will advise you when this can happen, make sure you keep in regular contact with them.

We know you’re desperate to get moving but hold fire on handing in your notice. You don’t want to be left without somewhere to live.

Until your solicitor has agreed a completion date with you and the seller there can be no guarantees about the date you will be able to move in. That’s why it’s important you don’t hand in your notice on your rental property until that date is set or you have a back-up plan.

Looking to the future…

What happens when my mortgage product runs out?: When your agreed mortgage deal comes to an end, you could end up paying a higher rate, known as the standard variable rate, or SVR. This means you’ll end up paying a higher interest rate than you need to, so This will always be a higher interest rate than others on the market, so it’s usually a good time to look into remortgaging.

We will start researching your remortgage options up to 3 months before your deal comes to an end, meaning we should have a new mortgage offer in place ready to start when your current deal finishes.

This is also a great time to consider staircasing (see the next explainer). If you have any questions about remortgaging we’re always happy to help.

What is Staircasing?: If you own a Shared Ownership home, ‘staircasing’ is the word that describes the process of purchasing more shares of your home. This can be done up to 100% (where the HA allows) or in smaller increments.

You can choose to staircase at any time, but it would usually be sensible to do this when your mortgage deal comes to an end, so you don’t have to pay ERCs. You will need to contact your Housing Association to gain approval to staircase. As part of this they will need to arrange a RICs surveyor to value your home. Your HA team will explain all this to you, and will be on hand to help you through it.

You will then purchase your new shares in the property at the new property purchase value. As your shares in the property increase, the rent you are paying will decrease to reflect this.

Why are there sometimes restrictions on staircasing?: Sometimes Housing Associations put limits on the level that you are allowed to staircase to, i.e. the amount of the property you will be allowed to purchase in total. This limit might be 80% for example.

Not all Shared Ownership properties have these restrictions, your Housing Association will let you know if there are any restrictions in your case so always check with them first.

What do I do when I want to move?: Well, firstly, contact us – let us have a look at the options with you.

It might be that you have ERCs (see next explainer), or it might be that you can port your mortgage (put simply – moving your mortgage to a new address).

We can help you answer all of these questions.

If you have a Shared Ownership home, you will need to inform your Housing Association if you want to move. There may be a clause in your contract that says you have to give them a period of time to find a buyer on your behalf before you can put the property up for sale on the local market.

The property will also need to valued at the point you wish to sell.

What if I have early repayment charges (ERCs)?: These are charges you will have to pay to your lender if you choose to come out of your mortgage early. Either because you want to sell the house, or you want to pay off all, or some, of the mortgage you owe. Sometimes you can make overpayments without penalty – be sure to ask your adviser about this.

Fancy a copy for your records?

Download this handy pdf version for saving and printing.

Download here

Can’t find what you’re looking for?

Simply get in touch and ask.

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% of the amount borrowed but a typical fee is £500.