Everyone wants to know how to start their mortgage journey and successfully apply for a mortgage.
But what about the final steps in the journey?
What’s involved in closing a mortgage? How long does it take? And how soon after completion day do you have to make your very first mortgage repayment?
Is exchanging contracts the same as mortgage closing?
When you exchange contracts you sign the contracts and pay the deposit to your solicitor who transfers it to the seller’s solicitor.
In return, you receive a signed contract back from the seller. You have now agreed to buy the property and they’ve agreed to sell it to you. In short, it’s ‘sale agreed’.
But, at this point, the mortgage funds have not yet been paid out and the mortgage is not closed.
Your solicitors will then arrange a closing or completion date which is usually in 6 to 8 weeks’ time.
When does mortgage closing start?
Strictly speaking, the process of closing your mortgage only starts on the day you complete the purchase of your new home.
On your completion day, your solicitor helps to arrange drawdown of your mortgage funds (the amount shown in your Letter of Offer) and buys the property on your behalf.
The funds are sent to the seller’s solicitor and, once everything is in order, you will get the title to the property and become the official owner.
At this point, you may consider your mortgage ‘closed’ but, of course, you may have another 30 years’ worth of repayments to make before you pay it off.
So what happens next?
When do you have to make your first mortgage payment?
After you close your mortgage, your lender will write to you letting you know how much your first mortgage payment will be and the date it needs to be paid.
Your first mortgage payment is generally due 30 days after drawdown.
But this is only a rough guide because some lenders might want to collect your repayments on a specific day each month.
With Bank of Ireland mortgages you have the flexibility of picking a monthly repayment date that suits you.
Book an appointment with one of our mortgage specialists
Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages is regulated by the Central Bank of Ireland