You go to see a property and it’s just the property you have been looking for. You know you can afford it as you have been to see a mortgage broker and have an agreement in principle. You make an offer to the estate agent only to be told that your offer will not be accepted unless you arrange the mortgage through their own in-house mortgage adviser.
Do you have to use the estate agent’s mortgage adviser?
The estate agent may tell you that it’s either compulsory or that you are more likely to have your offer accepted if you use their in-house mortgage adviser. In both cases you definitely do not have to. It is actually illegal for an estate agent to force you to use their own mortgage adviser.
Advantages of using your own mortgage broker
The main advantage of using your own mortgage broker is that you will have someone who has your best interests at heart. Someone who is independent. If you use the estate agent’s in-house mortgage broker you do not know who they are putting first, you or their client that they are selling the house for?
When you put in an offer on a house, one of the first requirements is for a mortgage decision in principle (also known as a mortgage agreement in principle). When this is produced it will show you and the mortgage broker your maximum buying power. Do you really want the estate agent to know this? Especially if you are offering below the asking price as the estate agent will be able to see how much more you could offer. Do you really want the estate agent to see your hand of cards?
So, what do I do if the estate agent is adamant I use their mortgage adviser?
This is a difficult call. Our advice is to inform your mortgage broker if the estate agent asks you to see their in-house mortgage adviser. The mortgage broker can email your mortgage agreement in principle to the estate agent and confirm that you are good for your money and that you are ready to proceed. The mortgage broker will be experienced in these matters and put some weight behind your offer and make it very clear that you do not legally need to see the estate agents in-house mortgage adviser.
What are the rules?
Although it is completely legal for the estate agent to recommend that you use their in-house mortgage adviser, it is illegal for them to insist that you use them.
The Estate Agents Act 1979 states that every offer must be put forward to the seller regardless of whether the buyer has obtained their mortgage from the broker recommended by the estate agent.
Therefore, if you are feeling brave you could quote the Act to the estate agent or get your mortgage broker to do so on your behalf.
What else can I do to increase the chances of getting the property?
Estate agents are always keen to get a buyer for a property and tie up a sale. Estate agents need to produce a memorandum of sale to get the sale underway. A memorandum of sale will have the buyers names and addresses together with the solicitors used.
Therefore, when the mortgage agreement in principle is sent to the estate agent, if this is sent together with the details of the solicitor or conveyancer you are using there is nothing to stop the sale getting underway.
What happens next?
Your mortgage broker will get your full mortgage application submitted to the bank or building society you are using for your mortgage. You will need to decide what survey you require on the property. You will have 3 options to choose from:
- Valuation survey – This is the standard survey that will be instructed by your lender. Its main purpose is for the lender to check that you are buying the property at the correct value and that there are no obvious factors as to why you should not buy it. This survey is often free.
- Homebuyer survey – This is a more in-depth survey. The homebuyers survey will help you find out if there are any structural problems such as subsidence. The report will also tell you if there are any damp problems. The surveyor will also give their opinion on the value of the property and if they feel you are paying too much. Costs start from £400.
- Full structural or building survey – This survey is the most comprehensive survey available. This type of survey is normally carried out on older properties or properties of unusual construction. It can also be worth considering if you intend to make some large improvements or extensions to the property.
This is another factor that will keep the estate agent happy. It is a sign that everything is proceeding at a good pace and so we recommend that you do not hang around in getting the survey carried out.
Exchange of contracts – buying a property
Once you have exchanged contracts the property is legally yours! Therefore we recommend that you and your mortgage broker push towards exchange of contracts as quickly as possible.
Exchange of contracts is usually approximately 8 weeks after your offer is accepted. You will know that you are close to exchange of contracts as your solicitor will arrange for you to visit their offices to discuss their findings and talk about dates for completion.
Your solicitor will have received your local authority search. This will have been applied for soon after the mortgage application was submitted and usually takes 4-6 weeks. The purpose of the local authority search is to give you detailed information on anything that would stop you buying the property and also in-depth information about the surrounding area. An example would be if there are any intended housing developments or road widening in the area.
Completion – buying a property
This is moving day. The day you have been working towards and patiently waiting for. The day you finally get to pick up the keys to your new home. The normal time for completion is late morning or early afternoon. Your solicitor will call you to inform you that you have completed and that you can go and pick up the keys from the estate agent.
When you chose your mortgage you will have more than likely picked a fixed interest rate. The most common fixed rate chosen is either 2 or 5 years. A mortgage is often taken out over a term of 25 – 35 years.
When you are within 6 months of the end of the fixed rate, it will be wise to have a mortgage review. Speak to your mortgage broker and get a plan of action together. Now is a good time to consider if you wish to raise any additional funds for any home improvements or decide if you are likely to want to move home. Depending on what your plans are, your mortgage broker is likely to advise you to remortgage.
What is a remortgage?
A remortgage is when you get the opportunity to see what banks and building societies will offer to gain you as a new client. Since you completed and moved into your property, it will more than likely have increased in value and you will have paid some of the mortgage off. Therefore you may well be looking at a lower interest rate and therefore lower monthly mortgage payments. Most banks and building societies will offer incentives to gain you as a new customer and therefore it is often possible to remortgage at no cost.
If your mortgage broker is a NO FEE mortgage broker this means it will not cost you to get advice and guidance about remortgaging. If your original mortgage broker charged you a fee, now could be a good time to get Googling!
How do I find a NO FEE mortgage broker?
The easiest way is to Google ‘NO FEE Mortgage Broker’ or ‘FEE FREE Mortgage Broker’. You will get a list of mortgage brokers near to you. Have a look at their websites. Look at their Google reviews. Do they have a 5-star Google rating? Have a look at the brokers Facebook page and see what their customers are saying about them. Do they have plenty of 5-star Facebook reviews?
Can YesCanDo help you with a mortgage or move home?
YesCanDo Money are a family-run independent mortgage broker. We are whole of market which means we will search the whole mortgage market to get you the best rates and the lowest interest rates. Also we are a NO FEE mortgage broker which means we will not charge you one penny for our services.
YesCanDo Money have a great team of very experienced mortgage advisers and mortgage managers on hand to help you every step. So give us a call on 02392 373235 or email us at [email protected] and see how we can help you.