How does a mortgage application work?
Noel McLaughlin, of Butterfield Bank, replies:
WHEN starting your search for a new home, the first thing you need to determine is how much you can borrow so submitting an inquiry with a mortgage provider is your first step.
To give an accurate indication of how much you can borrow, the provider will require you to provide your financial information. Many providers will need you to attend an appointment in person to do this. However, some, like Butterfield, can assign a member of our local team to speak to you over the phone.
This time-saving approach means you will receive an indication within 48 hours. Other providers may need all the initial paperwork to be handed in and processed before they can give an indication.
The next step is for the provider to run a series of credit checks, review the information you have provided and approve your application, following the receipt of all required documents. Many providers perform these tasks away from the Island, which can cause delay, and certainly removes the personal touch from the application process. We make our decisions locally, which allows us to take the applicant’s individual circumstances into account.
Once a provider has agreed to lend you the money required, they will instruct a surveyor to carry out a valuation on the property. The surveyor’s job is to assess whether the property is worth what you have agreed to pay for it. They will check things like subsidence, insulation and the external condition of the property. If the surveyor is happy, then the provider will produce a facility letter, which sets out the terms of the loan, for you to sign.
At Butterfield, the facility letter is signed before the valuation, streamlining the process and enabling you to move straight to the final step once the valuation is complete.
Finally, lawyers are instructed to handle the legal side of the transaction. When everything is approved, it will go through court, a bond will be issued and you will receive the keys to your dream home.
