askpaul on the mortgage process:

So, in this video, I want to have a chat with you about the mortgage application process or the underwriting process for a mortgage. What actually happens here? You come to see someone like me, we sit down, we get your application form completed – has all the normal details – name, address, date, PPS number, what you are looking to borrow. We would have a look at your current account, your bank statements, your loan account schedule, payslips, all the usual stuff. And we’ve done videos on this before, so you know what you need for a mortgage. What actually is the next step in the mortgage application process?

Mortgage Application Steps

We get the mortgage and package together, and we usually send a letter to the lender, letting them know what you’re looking for why you should get the mortgage, quite like a referral form I suppose, and we give the candidate the kind of backing that the case needs to get it over the line to the mortgage underwriter. But when it goes into a mortgage company, what actually happens is – so they sit down, they assess the mortgage – the first thing they are looking for is your ability to pay your mortgage, and that’s really the main thing that they are looking for.

The big no-no’s, and when you have your application gets thrown straight into the bin, is if you’re in the red all the time. So, if you’re in your overdraft, if you’re missing payments, if you’re getting bounces on your current account every couple of months, these are big red flags for mortgage lenders. And the biggest no-no, and I’ve said it before, is betting companies. If you have a betting company and are paying them out of your current account this, again, is a massive no-no and your mortgage application is going to go straight in the bin.

Once the underwriter has assessed that your application looks OK, they look at the mortgage application, give it a big tick, and the next part of that process is they go to what’s called AIP approval in principle, and this is a form sent out by the bank and it basically says your €300,000 mortgage application has been approved in principle and there’s usually couple of terms and conditions on that approval in principle. Then, there may be a couple of things that you’ve missed from your application, and they will bring it to the next step.

At this stage, you need to engage your solicitor and you need to go look for the property. I would usually recommend bidding on properties when you have your approval in principle. You can only really bid on a property If you have your approval in principle. Don’t go doing it before because you’re going to be disappointed as the mortgage application process can take some time. So, once you have your AIP you go pick your property, you come back, and you give the property to the bank and you also give a valuation on that property.

After that stage, we move to what’s called a loan offer and a loan offer is an official documentation that will go to your solicitor. Your solicitor then takes over and does all of the conveyancing checks, that the property has all the correct paperwork, makes sure there are no mortgages against it still, and all that kind of legal stuff that I won’t get into in this video.

Once that’s approved, the other thing that your loan offer is going to need is to have life assurance and house insurance in place. Once you tick the boxes for approval for the loan offer, the mortgage loan offer gets signed by you and your solicitor, and then goes back to that bank and you get your house.

It can be a very long-winded process but, you do get there eventually. What I usually recommend is if you put a mortgage application in, you should be getting to the AIP stage within six to eight weeks. It can be sooner but, generally speaking, it is usually around six to eight weeks if the banks are very busy – just try to set your expectations. A loan offer usually takes within three to four months. I’ve also seen mortgage loan offers take six months.

The biggest problem for you is probably not your mortgage, it is probably going to try and find the property that you can bid on and get within your budget, because, the property market is really tight at the moment.

I hope this video helps, just thought I would take you through the process of what actually goes on behind the scenes of a mortgage application.

Contact askpaul today for help in applying for a mortgage