Getting Your Mortgage In Place After Sale Agreed
So you’ve gone sales agreed, what happens next?
Congratulations you’ve gone sale agreed, you are a big step closer to your new home!
The seller will need a booking deposit from you in order to keep the property at the agreed-upon price until you get your mortgage cheque from the lender to pay for the property in full.
So how do you actually get your mortgage cheque?
If your offer has been accepted you probably already have Approval In Principle (AIP) for a mortgage, if not you can read more about how to get an AIP fast here.
Assuming that’s already in place you now need to get your formal loan offer from your lender, legals in place and meet any conditions before actually drawing down your mortgage.
If you are with a mortgage broker they will help you with all the paperwork and conditions. Given you are juggling a lot of balls with the purchase of a new home this can reduce a lot of the stress.
Whether you are with a broker or not though, we’ve laid out the key steps you need to follow below.
1. Get a Solicitor
At this stage, you must speak with a solicitor to handle the conveyancing, the legal process involved in purchasing or selling property.
The legal work will start to be handled on your behalf by your conveyancer. They will verify that the property is properly documented and that there are no outstanding mortgages against it.
You can find out more about the cost of mortgage legal fees and how to get the best conveyancer here.
2. Obtain a Property Valuation
To make sure the property is secure enough to lend against, your lender will want an independently audited property valuation.
Lenders will typically make arrangements for a valuer on their panel to perform the valuation. This usually costs around €150, however prices can change.
A valuation report must, according to Central Bank standards, be no older than four months at the time of the mortgage drawdown. Once you have your valuation you can then make a request for your formal loan offer from your lender.
3. The Loan Package and Loan Offer
You will receive a formal letter of offer explaining the specifics of your mortgage if the lender approves your loan for the property once they are satisfied with the valuation and any other AIP conditions.
Your offer letter will detail the following:
The mortgage's value, term, cost, and payback schedule
The location and details of the purchase property
Conditions that apply to the offer in general
The mortgage offer's expiration date
Your solicitor will also get a copy of this letter and the legal pack for your loan. They need to fill this out. As soon as you receive your letter, you should make plans to meet with your solicitor
5. Meet the Loan Offer Conditions.
Your lender will need final documentation from you, such as copies of your last paychecks and evidence of your homeowner's insurance and mortgage protection insurance.
Before granting you a mortgage, lenders must legally confirm that you have mortgage protection insurance.
If you or another policyholder passes away during the mortgage's term, your mortgage protection insurance fully repays the mortgage debt.
Lenders will demand that you have home insurance in place before allowing you to draw down on your mortgage, this insurance ensures if the property is damaged it will be repaired or rebuilt. If you are buying an apartment this is sometimes known as ‘block’ insurance as there is often a single policy for the whole building.
Here's where you can get a building insurance quote and here’s where you can find all the details on the best mortgage protection policy.
6. Drawing Down The Mortgage Cheque
The last stage!
You will pay the remaining deposit after your lender accepts the provided documentation.
Your conveyancer will send your lender a cheque request form with the closing date on it and will make arrangements to have this money transferred to the seller once they have the lender's cheque in hand.
Stamp duty and registration fees are also due at this time. All that's left to do is get your keys and move in after this!
You can find out even more detail on the mortgage drawdown process from moneysherpa the Irish money guide.