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How To Get A Mortgage

Whether you’re a first buyer or are looking to move home, navigating the mortgage application process can feel like a stressful and complicated task.

Use our FREE online mortgage calculator to help you find the best mortgage deals for you.

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Getting a mortgage: the basics

For first time buyers, the world of credit checks, surveys and contracts can seem overwhelming. For those whose most recent experience of the mortgage process was before the market crash of 2007, the changes to the mortgage market can come as a bit of a shock – 100% mortgages are a thing of the past and interest only mortgages are no longer widely available, with many mortgage providers tightening up their lending criteria.

From April 2014, the changes to the mortgage application system proposed by the Mortgage Market Review (MMR) come into effect, meaning that lenders will have to carry out stricter affordability checks on new borrowers – a move that could lead to a slower mortgage application process for many prospective buyers. However, if you are well-prepared and organised you can still navigate the mortgage application process as smoothly as possible.

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Preparing to apply for a mortgage

Before you approach any mortgage lenders or intermediaries, it makes sense to do all you can in advance to improve your chances of acceptance and ensure the process runs smoothly. Gather together financial evidence such as:

  • Recent payslips
  • Evidence of any bonuses or overtime
  • Evidence of any tax credits, maternity/paternity pay, or other state benefits
  • Recent bank statements

The mortgage application process

Whether you are a first time buyer or a seasoned property owner, the mortgage application process in England and Wales is basically the same. For a full breakdown of each step in the mortgage application process, click here >>

Step 1: Work out how much you can afford

As well as working out how much you can afford to put down as a deposit on your property, you also need to take into account how much you can afford to repay each month, as well as ongoing costs such as property maintenance and unforeseen expenses.

Step 2: Consider what type of mortgage is best for you and seek advice if required

There are many different types of mortgage available – varying in repayment method, interest rate, and duration - although not all mortgage types will be available to all borrowers. Under the new MMR rules, your mortgage lender has a responsibility to ensure that the mortgage they offer you is suitable for your needs and for your financial circumstance. This means that they will have to look deeper into prospective borrowers' financial situations before deciding whether to offer a mortgage. Many borrowers will also be required to see a mortgage advisor before processing with their mortgage application, during which their finances will be ‘stress tested’ to ensure that they could still make the mortgage repayments in the event of a rise in interest rates or a change in their financial circumstances. All monthly outgoings and household expenditure will be considered during the application process and will need to be evidenced. If you have already gathered together your paperwork as suggested above, this should be relatively straightforward.

Types of mortgage that you may be offered include fixed rate mortgages, variable rate mortgages and tracker mortgages – to find out more about the different mortgage repayment options available, click here >>

Step 3:  Get a key facts illustration and a mortgage agreement in principle

When you visit a potential mortgage lender, such as a bank or building society, they will usually give you a key facts illustration (KFI) for the mortgage you are interested in. KFIs are standardised to help you compare mortgages on a like-for-like basis across different lenders.

Once you have narrowed down your choice, your mortgage lender or intermediary will perform some initial checks on your eligibility for a mortgage. These may include checking your credit score as well as assessing your income and outgoings by examining your payslips and bank statements. If you are eligible based on these initial checks, the mortgage lender will then give you a mortgage agreement in principle. This will give you an idea of how much you may be able to borrow and can be useful in focussing your property search as well as reassuring prospective sellers that you are likely to be in a position to complete the purchase. However, remember that an agreement in principle is not a guarantee that you will be able to get a mortgage for the specified amount from that particular lender – it is only an indication of what you might be able to borrow.

Step 4:  Make a mortgage application

Once you have found a property you like and have made an offer, you will need to apply for your mortgage. The lender will ask you to provide more detailed information than is required for an agreement in principle, including proof of identification, proof of  income, and details of the property you wish to buy including property type, valuation and survey requirements. You can find out more about the full mortgage application process here >>

To compare the latest mortgage deals, you can use our simple online mortgage calculator.