London has long been a city of dreams for homeowners. In addition to it being a capital city, it has a number of attractive qualities making it a great place to live.
Sought-after employment opportunities, world leading education and research institutions and a wealth of historical and architectural landmarks in places like Mayfair and the West End, as well as arts and entertainment facilities and bustling dining and nightlife all contribute to London’s appeal as a city where people choose to live, work, study, and experience a rich and dynamic lifestyle.
In this article we’ll explore how to get a mortgage for a London property, as well as top tips to preparing to apply.
How can I get a mortgage?
If you’re looking to obtain a London mortgage, here we list a step-by-step guide to help you navigate the process:
- Assess your financial situation: This includes your income, expenses and credit score which you can review on websites including Experian or Clear Score. Having this information will help you understand your affordability and whether you’re ready to take on a mortgage.
- Research the type of mortgage you want: Explore different mortgage options will help you to identify which product is right for you. Whether you’re in need of a residential mortgage, commercial finance or your exploring your remortgage options, That’s also where the value of a mortgage broker can be added. A London mortgage adviser can also help you to find the products that offer the most favourable terms, interest rates and speed of completion.
- Work with a broker to get pre-approved: Before house hunting, consider getting pre-approved for a mortgage. This involves working with your dedicated London mortgage adviser to provide necessary financial documentation to the lender, who will assess your eligibility and provide an estimate of your affordability and the loan amount you qualify for.
- Gather required documents: Now it’s time for you to prepare the necessary documents for the mortgage application process. These typically include identification proof, income statements, tax returns, bank statements, and details about any outstanding debts or assets.
- Submit your application: Once the mortgage product type has been agreed discussed and agreed, your mortgage adviser will fill out the mortgage application form provided by the lender. Be sure to provide accurate, honest and complete information to avoid delays in the approval process.
- Wait for the lender’s decision: Once your application is submitted, the lender will review your financial information, credit history, and the property you intend to purchase. Your mortgage adviser and associate team will remain in constant contact with the lender to ensure the application is handled efficiently. The lender will then decide whether to approve or reject your mortgage application.
- Progress to exchange: If your application is approved, you will move forward to the exchange of legal documents on the purchase of your house. This process involves signing the necessary legal documents, paying any closing costs, and finalising the terms and conditions of the mortgage. If the application is declined, your mortgage adviser will talk you through next steps.
- Secure buildings insurance: Before exchange, it’s essential to secure buildings insurance for the property you’re purchasing. This is a requirement by most lenders to protect their investment.
- Completion day: Once the exchange of legal contracts has occurred you are on your way to completion and picking up the keys – congratulations! You’ll take possession of your new home and your mortgage payments will start according to the agreed-upon terms.
If you are ready to take the first steps to buying London property, we suggest reviewing our handy guide on purchasing your home in an inflationary market. Here, LDN Finance’s chief operating officer Greg Cunnington offers up his useful considerations when purchasing property in the current cost of living crisis.
Sound good? LDN Finance is a multi-award-winning London Mortgage Brokerage who have been helping clients purchase London property for over 6 years. Individually, some of our brokers even have over 25 years’ experience individually!