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How to apply for a mortgage
How to apply for a mortgage
Once you’ve found the perfect home, had an offer accepted and a survey performed by your lender, it’s time to apply for a mortgage.
Mortgage application
You will then need to fill out an application with your:
- Personal details
- Income
- Credit history
- Details about the property you want to buy
This guide will help you understand how and when to apply for your mortgage, and what information you’ll need to include.
Getting a mortgage application approved
Lenders have conditions you must meet to be accepted for a mortgage. This includes:
Credit score
Your lender will check your credit history to find out how reliable you may be at paying back a mortgage.
What is considered as a ‘good’ credit score will depend on your mortgage provider and loan terms. Paying bills on time and a history of meeting credit card payments on time may help.
Regular income
Lenders may ask for past payslips to understand your income. Being in a job for over six months and having a steady income could improve your chances of being approved.
Deposit
The more deposit you have, the less you’ll pay on your mortgage repayments each month.
Find out more with our guidance on mortgage deposits.
Your age
You must be at least 18 years old to be approved for a residential mortgage, and 21 years old for a Buy to Let mortgage. Some lenders may also have maximum age limits, as older applicants can be seen as a higher risk.
Before you start your application, use our mortgage calculator to see how much you could borrow and what your monthly repayments could look like.
Information you'll need when applying for a mortgage
Before you start your mortgage application, it helps to have all the information you’ll need to hand. This will speed up the process and ensure you don’t miss any important details of your application.
You’ll need:
- P60 form – This shows your salary details, including what you pay in tax. You can ask for this from your employer.
- Payslips – The lender will usually ask for your last three months of payslips.
- ID – Accepted forms of ID include your passport and driving license.
- Utility bills – You may need to show your regular outgoings, such as utility bills or council tax.
- Proof of address – Lenders will normally ask for two proofs of address, such as a bill or bank statement. This must be from the last three months.
- Benefits or income support – If you receive any benefits from the government, you will need to give proof of this.
- Bank statements – Lenders will want to see at least three months of activity on your current account.
- Other debts – If you already have a mortgage or have taken out a loan, you will need to disclose the details. This includes your repayments and when the loan ends.
If you are self-employed, your lender may ask for further details such as:
Making a mortgage appointment
A mortgage advisor may be able to offer recommendations on the right mortgage for you.
To find a mortgage that’s suited to your needs, a mortgage advisor will look at your:
- Income
- Existing debts
- Your personal circumstances, needs and preferences
There are several ways you can book a mortgage appointment, including:
What happens when you apply for a mortgage?
It can take over a month from your initial mortgage application before you get a firm offer from your lender. This is because they need to run several checks on your finances and property before they can offer you a mortgage.
If you’re worried about being approved, you can apply for a mortgage Agreement in Principle before you start looking for a house.
Mortgage Agreement in Principle
A mortgage Agreement in Principle is when a lender agrees, in principle, to offer you a mortgage.
This decision is usually based on a soft credit check and the accuracy of the information you provide, so this will never be guaranteed. You will always need to go through a full mortgage application before you are approved for the money you need.
Here are the stages you will go through between applying for a mortgage and receiving an offer:
Mortgage interview
This can happen before or after you submit your mortgage application. It involves a meeting with your mortgage provider, either face to face or over the phone, who may be able to advise you on a mortgage that suits your circumstances.
They’ll be in touch beforehand to let you know what documents to bring, but usually this includes:
- ID
- Proof of address
- Details of your income
The questions asked will usually be about your current income and future spending. Your provider will want to discuss your:
- Monthly spending, such as utilities and travel costs.
- Future plans, for instance children or home extensions.
- Other commitments or debts you are currently repaying.
- Personal circumstances including any that may change, like your current job.
Credit check
Lenders will do their own credit checks for proof that you are a reliable borrower. Here are some of the things they’ll look out for:
- Your earnings
- Any County Court Judgements (CCJs) or missed payments
- Other debts taken out
- Past loan applications, shown as hard searches
- Credit history
Home valuation
Your mortgage provider will also need to do a valuation of the home you want to buy to make sure the house is worth as much as the sale price. This isn’t the same as a home survey, which looks at the condition of the house.
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What if my lender’s valuation is different to the price?
If your lender values your home less than your agreed sale price, your application may be revised.
When this happens, your lender can lower your mortgage amount to match the new value. This means you may need to speak to the seller to negotiate a price to match your new budget.
How long is a mortgage offer valid for?
Usually, a mortgage offer is valid for between three and six months.
Do I have to accept the mortgage deal offered?
When your lender accepts your application, you usually have a short window of time to consider the offer, known as a ‘reflection period’. During this time, you can choose not to continue with the mortgage.
How far back do mortgage credit checks go?
Generally, mortgage lenders will look back over the last six years of your credit history to help them make a decision.
Can I apply for a mortgage with credit card debts?
Yes. If you have outstanding debt, this commitment will be taken into account, but it is possible to still be approved for a mortgage. Before you apply, seek advice from a mortgage advisor on the best options for your circumstances.
What credit report do mortgage companies use?
There are three credit reference agencies in the UK:
- Experian
- Equifax
- TransUnion (formerly Callcredit)
Mortgage companies will check your credit report with one, two or all three of these. Each one has different maximum scores and scales, even though they all use the same information.
What does mortgage offer issued mean?
A mortgage offer is issued when the lender has processed your application and is happy to lend you the agreed amount.
Sometimes called an ‘offer of advance’, it’s only issued when the lender has completed its credit checks, confirmed the value of the property and is ready to offer a mortgage. After a mortgage offer is proposed, your solicitor can exchange contracts and complete the purchase.
The mortgage offer issued will include:
- Personal details – Name, address.
- Property information – Address, valuation, property type.
- Mortgage details – Interest rate, term, repayment amount, mortgage fees.
- Property rights clauses – Repossession and sale if you’re unable to meet repayments.
- Mortgage terms and conditions.
What if I’m refused a mortgage?
There could be several reasons you may not be accepted for a mortgage.
These range from an error on your application to a low credit score. Before you reapply, seek advice from an advisor to find out why your application was refused.
Find out more about what happens when a mortgage application is declined.
The content on this page is for reference and does not constitute finance advice.
For impartial financial advice, we recommend government bodies like the MoneyHelper.