Securing a Mortgage (Buying my First Home)

Following on from last week’s post, I explained how I came to the decision to apply for my mortgage with NatWest. There’s a more detailed explanation on my thoughts on which type of mortgage, but I decided to utilise their 80% mortgage as it had better rates. I chose to do a 2 year fixed rate mortgage over 30 years, and despite initially being unsure about upfront costs, I did choose one with a product fee. The product fee was £995, but with this option I also got a £750 cash back at the time of completion. 

Once I made that decision, I started the application. I had initially begun by filling in their online form but unfortunately, due to the complexity of my salary and unsocial hours pay, I decided to call. Previously, I’d been on hold to Santander for over an hour to even get through to someone but the NatWest mortgage department answered within minutes. They were absolutely lovely and filled in the application on their end, with my simply giving figures and numbers for them to add. They knew how to add additional boxes for different income streams so it was much quicker. It took about an hour and then they said they would set up my profile and I should receive further instruction this afternoon. We also booked my next appointment in for less than a week later. 

It didn’t take long for a series of emails to come through. They have an applicant portal for all mortgage applications, which continues all their communications, information and advice, as well as provides a secure platform for supporting evidence to be uploaded. 

Shortly before applying for my mortgage, I received a promotion at work. As the next wage slip didn’t come out until the following month, I had to request a letter from work stating my exact new salary. This formed part of the evidence I uploaded to the platform. They also wanted the previous 3 months of my current account bank statements, 3 months of wage slips (including secondary job of bank shifts) and evidence of deposit. Likewise, I had to do an identification verification with 2 forms of legal IDs, alongside a Live Photo which required a 360 degree set of images. The former was the hardest as I had 2 rejected for being “blurry”, despite being perfectly good photographs. 

The mortgage advisor for the first meeting kept in touch even prior to the meeting, through both emails and a phone call. It was nice to be kept updated as my documents were approved. At the meeting, I was expecting it to be quite quick, given all the evidence that they had, but it took almost 2 hours.

First, we clarified my deposit and where the funds were from. The majority is savings, but also some inheritance. As it was from over 3 years and I could provide proof of this, this didn’t affect the process. Next, was the payslips. I knew this part was expected as mine is quite complex but luckily, he was quite knowledgable of the NHS salary system. It starts with the basic pay amount which is consistent month on month, however due to my promotion, this was increasing. From there, we went through unsocial hours pay, overtime pay and bank pay for additional shifts. There was also holiday and absence pay which was also factored in. Initially, they weren’t going to include the bank pay as it hadn’t been consistent each month for at least a year, however because it’s an extension of the same job, they said this was fine in the end. 

Finally, the assessment for affordability which was the part I didn’t expect at all. I only have one account which has money taken out of it and I always keep it at a certain level so I regularly transfer money across accounts which make up the majority of my transactions. They also questioned my rent, and whether that would stop when I moved…which is an obvious yes. Then went through all the little payments to Amazon, for subscriptions, groceries and even paying my mum and partner. It was something I though was quite odd, but apparently very normal and usually takes a lot longer than mine, for which I was very thankful. 

He was so helpful and supportive, answered all my confused questions and providing guidance going forward as well. To prevent bias’, they then submit the evidence to be approved and make a follow up appointment with a different mortgage advisor to select the actual mortgage. The financial department approved it for my desired amount relatively quickly and I then had my next appointment another week later. 

The next appointment I thought would be quite quick, but again I was wrong. Of course, they had to re-run through all the basic information from previously. They had to run through a lot of terms and conditions, sign multiple forms and then go through every type of mortgage, writing reasonings down for each decision. It was very lengthy. 

When it was finally time to select the specific mortgage, I was shocked to hear that the interest rate I had anticipated had shot up from 1.96% to 2.15%. This was mid-March and thank god I got it approved back then, because looking now, the rate is 2.75% with no cash back! The housing crisis is slowly getting worse and worse. 

Nevertheless, the increase shocked me as I assumed it would have been frozen at the rate from when I started the application. Apparently not and this meant that the monthly payment increased from less than £600 to just under £620. I was in a bit of shock and quite upset (unnecessarily so, but) and so I asked to have a moment to gather my thoughts. The most frustrating thing was that if my appointment had been the previous day. The interest rates would have been the same and it was their lack of availability rather than mine, which delayed the process. 

The woman was very fair and understanding but said they were likely to increase further and her next appointment was two days away. As soon as I said goodbye and did some research, I saw all the banks had increased by similar amounts and asked if I could join the call again. Sadly, it was too late, but she gratefully stayed 20 minutes late to fit me in at the end of the day! 

The final steps were paying the fee, then waiting for the bank to organise a valuation from their perspective to ensure it was worth the market value and the price I paid. This was organised for the following week, with no concerns and then the application was officially approved. All in all, from having my offer accepted on the house, to mortgage approval, it took exactly a month. This did however include the week starting with Santander, before beginning with NatWest.