Mortgages for Contractors
Are you thinking of making that first move on to the property ladder but are put off by the daunting task ahead of you. Below we have set out a step-by-step guide to help you find your way through the maze and advise you of the best ways to go about attaining a contractor mortgage for your first home.
Obtain an “Agreement in Principle”
The first step in the process should be that your mortgage adviser organises an “Agreement in Principle” with the mortgage lender you have decided is most suited to your particular needs and circumstances. This will actually give you a major advantage when you are house-hunting as prospective sellers who want to sell quickly will have more confidence in you as a reliable buyer if you already have a lender prepared to offer you a mortgage. This can really increase your negotiating position as you are seen as a serious buyer!
Property Search – Find your perfect home
You may already know what sort of property you are looking for and the locations which attract you but before you go out to stare into estate agents’ windows or surf the on-line property sites you would do well to know exactly how much you can borrow. From your “Agreement in Principle” which your mortgage adviser can help you arrange, you will have this knowledge and you can therefore save time and focus your search towards properties which will fit your budget.
Internet property search sites are extremely handy for saving time trolling to lots of different estate agents and most agents have their own web sites too. Be aware though that to secure a mortgage, contractors and freelancers will have problems attaining a mortgage on-line. Most property sites are geared towards the employed or even self-employed. Contractors don’t strictly fall into either category and would benefit from dealing directly with a specialist contractor mortgage broker (like Freelancer Financials) who have the experience in presenting and successfully securing such mortgages. Bear in mind also that we do not charge a broker fee for our specialist services!
Continue reading about mortgages for contractors made easy
Make an offer on a property
When you have found your ideal home it is time to start the negotiating and make your offer. Fundamental to this process is your knowledge of how much you can afford to pay balanced against how much you believe to be the value of the property. Use your estate agents’ professional and local knowledge to find out the real market value of the house and utilise available websites which can help you track down exactly what other similar houses in the road/area have sold for recently. This will give you confidence in your offer and ensure that you are not going to pay more than the house is actually worth.
A good estate agent will act in your interests and liase with the seller on your behalf. Make him clear as to your budget limit and do not allow yourself to be persuaded into unrealistically increasing your offer. It can be easy to get so caught up in the excitement of the prospective deal that sensible reminders as to why you have set such a budget limit may be needed! If you pay an inflated value for your property you may find that the lender refuses to allow you the mortgage and you will be back at step 1. Once you and the seller have agreed upon a sales price you are both happy with you can get on with the process of the actual purchase itself.
Your mortgage application is submitted to underwriters for assessment
With the purchase price settled you should now be ready to move on to the next stage of submitting your actual mortgage application. Call us at Freelancer Financials on 0208 421 7999 or email your adviser directly and we will be there to do the hard work for you. In a short time we will be able to gather all the relevant information from yourself to process the application. You will need to have ready details such as your passport, driving licence and utility bills for authentication of identity and proof of address. Your adviser will be there to answer any questions you might have and guide you through the entire stage of the application.
We will also be able to help you choose a suitable solicitor to instruct with your case as we have a list of reputable solicitors whom we recommend to our clients and whom we use regularly on a nationwide basis. We are also able to help you estimate potential legal costs should you wish to plan these into your budget before you start the process of buying your own property. Just call us on 0208 421 7999 or alternatively send us an e-mail at: info@freelancerfinancials.UK.com
Property valuation and searches
Although your mortgage lender has agreed a loan to you during your “Agreement in Principle”, they will first have to make a number of checks in order to establish if the property is valued at the amount you have agreed to purchase it for. Only when they are satisfied that it is a safe investment and suitable security for lending purposes, will they agree to make you a confirmed mortgage offer.
The types of checks they will want to carry out include area searches, land and building surveys of the property and its plot. Most of these searches will be done by your solicitor and some by the lender themselves. Their aim is to ensure that your property is structurally sound and unaffected by problems such as subsidence or long-term damp which may have already damaged or could cause damage to the property in the future. Other causes for concern could be planned developments in the area or the plot being located on contaminated land. Such searches could prevent you (and your lender!) from making an expensive mistake. At Freelancer Financials your adviser will there to pass on updates and inform you of the proceedings at every stage. We will also help guide you through any issues which may arise as a result of the checks.
Most issues which arise are minor matters which are easily dealt with but if any serious matters arise then this may be a case for going back to negotiate with the seller either for an equivalent reduction in purchase price or for the problem to be resolved as a condition of sale before the exchange takes place. It is also worth noting that the lender may refuse to make a mortgage offer until the problems are resolved.
A “Mortgage Offer” is issued
With the searches and checks completed and any issues resolved, your mortgage lender should contact your mortgage adviser with their mortgage offer to you. A copy of the “mortgage offer” is also sent to your solicitor and yourself. Once this has been received and you have been notified by your adviser that your application is proceeding, you can then inform your solicitor to go ahead with finalising the property purchase.
Signing the contracts
The next stage is for you and the seller to sign the contracts. Other documents that need to be signed include mortgage deed and declarations. Your mortgage adviser will communicate closely with you and your solicitor to make sure that everything goes according to plan.
Exchanging Contracts
It is now time for the actual money to change hands! Firstly you will need to have ready your deposit (approx’ 10-25% of the final purchase price) which your solicitor will request be passed over to him to retain for you whilst the contracts are exchanged. After exchanging contracts your deposit money will then be transferred over to the seller and will constitute a form of binding agreement between you both. If either one of you drops out of the sale, the money becomes forfeit to the other party ie. If the seller pulls out before completion he must return your deposit but if it is you who pulls out then the seller is allowed to keep your deposit.
It is quite common for the solicitor to provide a bridging facility to cover the deposit on your behalf if you are still waiting for the sale of your current/former property to provide the funds for the new purchase. This will be repaid to him at the completion.
An additional factor which is often overlooked amidst all the other details of a new property purchase is the fact that you will now be responsible for the new place. A necessity is a comprehensive buildings and contents insurance to ensure you protect your new home and everything in it from any theft or damage. It is always easy to say “it will never happen to me…..” – until it does and then it is too late. Be safe and not sorry. Call Rali Atanasova – insurance expert at Freelancer Financials on 0208 421 7999 or email her at: rali@mortgage-quest.co.uk . She has the experience to know who are the best insurance providers and which ones PAY OUT for claims.
A completion date is set
The end is in sight. A date for completion needs to be agreed between you and your solicitor and then arranged by him with the seller’s solicitor.
Once the completion date is finalised, your solicitor will request the funds from your lender to be transferred to a client account held by them on your behalf, to facilitate the property purchase with the seller’s solicitors. The transfer deeds (which you would have signed) will be sent to the seller’s solicitor to finalise the completion of the property purchase.
Completion
The keys to your new home are handed to you. Congratulations, don’t forget to invite us to the housewarming party!
Our Contractor specialist mortgage advisers are on hand to help with your current or future requirements today.
Call us on 020 8421 7999 to discuss contractor mortgages or email mortgages@freelancerfinancials.com
