Getting a mortgage Agreement in Principle (AIP)
24 hours, once you approach a lender
Getting a mortgage in principle agreement should be the first step for anyone looking to buy a home. It’ll help you understand what sort of price bracket you should start looking at, and will make the process of getting your mortgage approved much easier and quicker when you do find a property that’s ‘the one’.
There are many factors that affect the amount of time it takes to get a mortgage agreement in principle, but it can often be an immediate decision and many lenders will be able to get back to you the same day, or within a few days, once you approach them. Just make sure you have all your information to hand.
If you’d like to find out more about what Post Office could lend to you, get an estimate online by using our mortgage calculator.
This is also the time to appoint a conveyancing solicitor – a legal expect who will guide you through the process – as you’ll require their services the moment you make an offer.
Finding your home and making an offer
A few weeks or months
Once you have your mortgage in principle agreement, you’ll know the cost of the properties you’ll be able to start viewing.
There’s no definitive answer as to how long you can expect it to take to find your home. How particular you are in what you’re looking for, and what’s happening in the wider market, will both have an effect. Its’s important to give yourself time. Carefully consider your decisions, arrange plenty of viewings and only make an offer once you’re confident it’s the right choice.
When you find something you are confident about, speak to your conveyancer about making an offer. You’ll want to decide whether your offer will go above, below or match the asking price – factoring in the state of the market, how long this property has been on the market, and whether there are any other potential buyers hanging around. Just bear in mind you do risk missing out or being gazumped with a low offer, but equally you could get you a great price if you’re willing to hold out.
To make your offer, either yourselves or your conveyancer should contact the current owner’s estate agent.
4 - 12 weeks
Once your offer has been accepted, there a few things that will need to happen at the same time:
- Getting your mortgage offer - Now you’ve chosen a property, you can turn that Agreement in Principle into a concrete mortgage offer. You’ll hand over all the details to your lender, and they’ll conduct their own valuations on the home before getting back to you within a few weeks.
- Drafting of contracts - The conveyancer you appointed will begin drafting up your contract, with the cooperation of your seller, their conveyancer, and the Land Registry. You’ll want your contract to be clear and thorough about everything, so this can take anything from one week to four or five.
- Conducting of searches and surveys - Your conveyancer will see that searches and surveys are conducted, to tell you as much information as possible about the property before you buy. Searches will check things like whether the seller can legally sell, where the property boundary is, environmental risks, planning limitations or plans for construction nearby. Meanwhile, surveys will study the physical state of the building and flag any potential problems.
Exchange to completion
Once you have your mortgage offer, the contracts have been drafted and the searches are complete, you can exchange contracts. This part of the house buying process often takes between 20-30 days.
The conveyancers will swap signed copies, you’ll hand your deposit to your solicitor, and from this point onwards, the agreement is legally binding.
If you’d like to know more about the ins and outs of exchanging contracts, and what it means for your property purchase, have a read of our guide to conveyancing.
As part of exchanging, a completion date will be agreed, which could be anything from a few days to several weeks. This is when funds will be transferred and keys handed over. But between exchange and completion, there will be a few things that need to happen:
- Getting buildings insurance - Now you’re legally bound to buy the property, you want to be certain it’s protected should anything happen to it – even though you haven’t got the keys yet.
- Signing of documents - Depending on the complexities of your property purchase, the conveyancer may still have a few things you need to sign after exchanging, such as a completion statement or transfer deed.
- Drawing of funds from your lender - In preparation for your completion, your conveyancer will gather the funds from your mortgage lender, ready to give to the seller on completion day.
Completion and beyond
Congratulations! The day has arrived to move in to your new home. Your conveyancer will have facilitated the transfer of funds, and will have the keys to your new property ready to hand over to you.
Whilst you might want to start making your new house a home, there are a few more steps in the house buying process to consider:
- Paying stamp duty - Stamp duty is a tax paid on property purchases. Your conveyancer will be able to tell you whether you need to pay it and if so, how much you owe. You have a limited time in which to pay it once you buy, so your conveyancer will ensure it’s paid for through them before it’s overdue. For more information, read our guide to stamp duty.
- Registering your ownership - After completion, you need to let the Land Registry know you formally own the property. Your conveyancer will arrange this for you, and there may be a fee to pay depending on your arrangement.
- Obtaining the title deeds - Once the registration has gone through, your conveyancer will get copies of the property’s new title deeds sent over, to share with you and your mortgage lender.
The house buying process can differ greatly and is one of the biggest decisions you’ll make in your life. It takes about 6 months in total to buy a house, however this varies from move to move so be sure to do your research in advance.