key hanging on wooden doll house

Step-by-step guide on getting a mortgage

Mortgage broker. 

The first step in getting a mortgage when you are 50, with very little deposit and not the best credit record is probably through a broker. I wouldn’t hesitate to recommend First Mortgage Direct. 

Credit score and file. 

The first thing they will suggest is to order a Checkmyfile credit report and print it. This will give them an idea of what will be available. 

Remember that the score is not critical, because the score tends to control things if you want a credit card. The mortgage application is in grey areas and is manually checked, so someone with a brilliant score might not get one based on their wage or unstable employment. 

ID, ID and more ID. 

You generally have to visit the office so that they can see you, take some ID (passport, drivers’ licence, etc.). They work out your income and outcome and then they to get you a decision in principle. This is a check based on your info you give (any defaults, wage, savings).  

Now, if your credit is iffy, then the adverse lender will take this into account and see what sort of adverse you have mentioned. Don’t lie – they’ll find out. Also don’t be embarrassed about it either. Everyone misses a payment now and then. 

Finding a lender and getting a “Decision in Principle.” 

Brokers are good in that they have criteria checks and can find the best mortgage for you, or the ones which will lend to you. They’ll check the best possibly lenders for you and get a Decision in Principle which essentially shows how much you will be lent by a mortgage company and how much deposit they would need. If adverse, they tend to want a bigger deposit (usually 15%). 

Putting an offer in. 

Now, if they say it’s fine, then put in an offer. If accepted, then the shit hits the fan. 

Normally when you put an offer in, they need to know about your DIP.  

The estate agents also need the following to formally accept and be able to send full details of the sale to all parties. 

  • Confirmation of your chosen solicitor (name, address, contact number and email) 
  • Full proof of funds i.e. mortgage in principle, sight of savings account, bank statements etc 
  • 1 x Photographic ID for each purchaser (Please note this must still be valid and in date) 
  • 1x Proof of address for each purchaser (please note if using a utility bill this must have been received in the last 3 months. If using bank statement, mortgage statement, car insurance document or council tax bill we can accept as long as issued in the last 12 month) 

I have to say that the estate agents for this purchase, Riverside Residential were a local firm and throughout the process were exceptionally helpful – even giving people a kick up the backside from time to time to speed up responses.

Finding a solicitor. 

Firstly, find a solicitor recommended by the mortgage lender. You can choose your own, but that means you’ll pay their recommended one as well.

We chose a solicitor from the mortgage companies’ approved solicitor – this simply means that the mortgage company are comfortable in transferring funds, etc. to them. Ours was Roberts Crossley Solicitors and they were exceptionally prompt in acting for us. We never actually met them; they were in Macclesfield, while we were up north. Everything was done via email and digital signatures.

Normally, a solicitor will estimate the costs for the entire process. Ours was around £1000, but then jumped to around £1600. Mortgage fees can include a £100 figure and then the overall fees can be nearly £1,000, so this needs to be taken into account. 

Checking your finances. 

You must go into some serious money laundering checks. Once accepted, the mortgage company want your bank statements and DNA. I joke, but they tend to need 3 months official statements (not a bank screenshot). They need all these with your address on. Most bank systems tend to allow this when you log in your account. 

They also need to know where the deposit came from, so they need saving statements with bank details and address on. This means that if you’ve popped in a deposit a month back, they’ll need to know. 
Wage slips from the last three months are a given and I recommend adding these when a new slip comes in because later, they sometimes require the up-to-date ones. 

They are meticulous. For example, for us, they even picked up on some SumUp transactions – my partner was self-employed alongside full-time employment, so this had to be explained. 

As mentioned, luckily, when applying for a Mortgage it isn’t “computer says no” – as they manually check and if you have a valid explanation, then you’re okay. Sometimes they will flag up excess spending on lotteries and gambling, which can cause an issue, but if you are in control of a syndicate for Lottery at work, then it can be explained. 
Proof of current housing, etc. 

Current housing is important. We were assured shorthold tenants for three years from when it moved to a rolling contract. Because we were good tenants, we didn’t have a paper trail, and everything was done via WhatsApp. So, you need evidence of the contract, plus if it’s rolling, they need to have confirmation of this (a statement from a landlord to you is good enough). 

We also had an issue where we had a reduced rent after three years – because it’s adverse, the lender may think we haven’t paid the extra £100 as shown on a tenancy agreement. 

So, we had to get the original tenancy document. Then anything rolling on meant a statement or document from the landlord showing what the status was. Something like: 

  • Mr. and Mrs. X 
  • AST from 2015 to 2018 
  • Rolling contract at £650 PM from 2018 onwards  
  • Dated and signed 

Or something similar. This is just to prove that you’ve not diddled the landlord where you are. 

Documents and filing. 

I strongly recommend you scan all documents and keep them in a folder on your computer (backed up to the cloud) 

Overall, you need the following for laundering, check as well as documents for your solicitor. 

  • Last three or four-month bank statements with address on the document. 
  • Any savings statements. 
  • Details of any rent you pay. 
  • Tenancy documents. 
  • ID such as passport / driver license. 
  • Pay slips. 

We also temporarily moved out of our rented place and with relatives. The mortgage company then just need proof of address, so any ID that’s changed for example. 

Mortgage lender doing a property valuation. 

Once this is done, then they make an assessment and value the property. This simply means they’ll lend X amount for the property. We got shafted originally, as the property was above a non-food shop (car / bike repair) in an affluent area. We contacted the mortgage company on speakerphone in the brokers who said it’s fine. 

Long story short, the original seller and original estate agents were utterly useless. They got things like addresses wrong, leasehold, freehold wrong, and no one had any keys to do a valuation. The moment the valuation happened our mortgage company reneged and said it’s above a commercial. This means we spaffed around 1k up the wall.  

This will be dealt with retrospectively, but do not fall into the trap. 

So, back to square one. Luckily, we found another one quickly (and cheaper). This was a leasehold, which meant more work and extra 200 for the solicitors. (On top of the eventually extra 1k) 

Property searches. 

So, this now meant we approved some searches via the solicitor. These are essentially the mortgage lender needing proof the property is viable for the mortgage term and isn’t going to fall into the sea. 

This is where I get annoyed (not at anyone, but the system). Why there is not a centralized source for all standard searches is beyond me. 

  • Coal searches seem to be an issue. They always tend to flag up because even closed mines always have the possibility of being opened again (as per government legislation). This is always questioned. But then a gigafactory could also land on the doorstep with change of government, so unless it is a safety issue where shafts have not been filled then it does not need to be so long. 
  • Chancel check which is a stupid old parish law where you must pay for the upkeep and repair of the chancel of the local medieval parish church if you’re in the area. This needs to be outlawed and banned. 
  • Water and drainage search – pointless as almost every property is connected to a water main and located with a sewage output. This should be centralised and automatic and only flagged when it’s not connected. 

Estimation of fees for searches, etc. 

So, our fees were around £1,628 for solicitors – some are VAT eligible.  

Fees Price VAT 
Our fees on your purchase £565.00 £113.00 
Leasehold Title Fee on your purchase £295.00 £59.00 
Transfer of Stocks and Shares fee on your purchase £85.00 £17.00 
Additional Search fee (x3) on your purchase £75.00 £15.00 
Retentions fee on your purchase £55.00 £11.00 
Mortgage Fee on your purchase £50.00 £10.00 
SDLT Completion Fee on your purchase £50.00 £10.00 
CHAPS Fee on your purchase £37.50 £7.50 
Bankruptcy Search Fee (£2 per client) on your purchase £4.00  
Chancel Search Fee £27.60  
Coal Search Fee £42.95  
HMLR OS1 Priority Search Fee £3.00  
Local Authority Search Fee £63.80  
Stamp Duty Land Tax £0.00  
Water and Drainage Search Fee £32.45  
Total SOLICITOR fees £1,628.80  

If you are buying a flat, then additional costs also apply – you also must pay 

Land Registry Fee £40.00 
Management Company Compliance Certificate Fee £240.00 
Management Company Membership Fee £180.00 
Management Company Notice Fee £240.00 
Stamp Duty Land Tax £0.00 
Total MANAGEMENT fees £700.00 

The initial mortgage application fee was £150 and their money transfer fee was £15. They also refused to add their fee of £995 to the mortgage, so they deducted it from the final mortgage they gave, meaning we had to add £995 to our deposit, so be aware of that. 

All approved and sending in the deposit. 

At this stage, we had to send in our deposit of 10%.  

Ironically, one of the scary things I worried before any mortgage was sending large amount of money via transfer, with all horror stories of amounts going into wrong bank accounts, etc. But realistically, the solicitor and the buyer have a transfer set up for all the early searches and fees, so sending the large amount in the end wasn’t an issue, as we’d spent a number of months transferring. 

Some late searches and approvals. 

Be aware of a panic bankruptcy fee. At the last moment I had to sign saying I wasn’t the same nacker in with my name who’d been bankrupt. My name isn’t common, so this was a fun experience, but my mortgage provider said it was just a common wide hit check. 

Completion date. 

You must agree a completion date. Mortgage drawdowns take a few days and a few checks (we had to send building insurance details over for example) Luckily, we requested on Wednesday, and it landed on Friday. 

Normally, you get called to confirm the exchange by your solicitor. They will ring individually. This means you’ve approved. Their side then approves and both solicitors confirm to each other over the phone. 

This means it is binding. If you pull out you lose you deposit, if the mortgage company checks your file and think you are taking on too much debt since they approved, they could refuse. Pepper mortgages didn’t do a final credit check on us before transferring. 

We, in a way, were lucky. As the last week was a dash, they drawdown and approved the mortgage funds going to solicitors before we exchanged contracts – as the contract date needed to match the money coming from the lender. 

The funds dropped in at around 11 am on Friday and were transferred, which meant we were through and complete.  

We collected the keys on Saturday as they needed time to move out, which was fine by us. 

Estimated time. 

The first property was rejected, but here’s the timeline. The rejection was due to the delay by the seller to obtain keys, etc. for a valuation. 

The process started on 13 May 2022, but failed by 21 July 2022 when the lender rejected the property (as it was above commercial premises).

For the new property (another flat, but a standard flat), the offer was accepted on 28 July 2022, and it was completed on the 28 October 2022.