How to Apply for a Mortgage and Understanding the Application Process

Applying for a mortgage can feel overwhelming, but understanding the process can make it much more manageable. In this guide, we’ll walk you through the entire mortgage application process from start to finish, including the documents you’ll need and what to expect at each stage.

We’ll also explain how working with a mortgage broker can simplify the process and improve your chances of getting approved.

For more resources and tools, visit our mortgage application hub, where you’ll find links to all our related content to help you at every step. If you’re a first-time buyer, you may also find our first-time buyer mortgages page helpful for additional advice on getting onto the property ladder.

What does the mortgage application process involve?

There are a number of stages to the process.

Here’s a step-by-step guide…

Speak to a broker

Before doing anything, it’s wise to talk to a qualified mortgage broker who can advise you on how much you can afford to borrow, how likely you are to be approved for a home loan, and what type of mortgage would best suit your circumstances. You may find you can borrow more (or less) than you first thought.

A broker can also advise you on which lenders to approach and which to avoid. If your situation is complex (previous bad credit issues or inconsistent earnings history, for example), a broker may suggest a specialist lender.

Get an agreement in principle

An agreement in principle (AIP) – a decision in principle or mortgage in principle (DIP/MIP) – is a statement from a lender outlining how much they’re prepared to lend you before you formally apply for a mortgage.

While it’s not a guarantee (a lender will want to conduct further – more detailed – credit and affordability checks before confirming its offer), it gives you a pretty good idea of how much you’ll be able to borrow, so it is very helpful when it comes to budgeting.

Find your new home and make an offer.

Now it’s time to start house hunting. You can make an offer once you’ve found a property you like. An agreement, in principle, always looks good, as the vendor will know you’re a serious buyer. If the property is highly sought after, it’ll give you an advantage over others who may not have their AIP.

While you don’t want to rush the house-hunting process, it’s worth remembering that many agreements are only valid for 30 days in principle, but some can be in place for 60-90 days.

Instruct a solicitor

You’ll need a solicitor to meet all the legalities of buying the property. Your solicitor will carry out a range of tasks including:

• Carrying out checks and searches to see if there are any concerns you need to know about, such as planning issues or anyone having rights over the property;
• Ensuring you pay the correct amount of stamp duty
• Transferring funds
• Obtaining new title deeds
• Agreeing on a completion date
• Make a formal mortgage application

Make a formal mortgage application

Next, it’s time to apply for your mortgage formally. You’ll need to gather all necessary documents (see below for more details) and send them to the lender. Your broker will advise you of what’s required. Hopefully, this is a speedy process. You might benefit from our article outlining why mortgage applications can be delayed (and how to avoid them).

Get a valuation

Your lender will evaluate the property to ensure it’s worth the amount you pay. However, it’s a good idea to get your independent valuation carried out. This will flag any problems or defects with the property that could end up costing you down the line, such as mould or unstable walls.

Receive your formal mortgage offer, exchange contracts and move-in

Once you’ve received a formal mortgage offer from your lender and your solicitor has completed all their paperwork, it’s time to exchange contracts, agree on a completion date and move into your new home. 

Documents you’ll need

Applying for a mortgage involves a fair amount of paperwork. If you miss anything, your lender might not be able to approve your application.

That’s why it’s worth getting your documents in order beforehand.

Lenders generally require…

• Proof of income (typically your last three months’ payslips or 2-3 years certified self-employed accounts. You may also need to show three months’ bank statements)
• Your latest P60 form (showing how much you earn and the tax you pay each year)
• Proof of ID (passport or driver’s licence)
• Proof of address (a utility or credit card bill)
• Evidence of your deposit (for example, a savings statement)
• A letter from the person gifting you the deposit; if the deposit is a gift
• Evidence of any bonuses or commission
• Your current mortgage statement if you already have a mortgage
• Credit reports
• Estate agent details
• Solicitor details

If you’re applying for a joint or multiple-applicant mortgage, each applicant will need to provide separate documents for their own proof of income, ID, bank statements, etc. 

How a broker can help

While nothing stops you from applying for a mortgage directly with a lender, it’s worth seeking advice from an independent mortgage broker if you want to increase your chances of being approved.

There are a number of reasons for this.

• An independent – or whole-of-market – broker will be able to review your finances and your situation and tell you which type of mortgage you should apply for, which lenders to approach and whether a particular deal is right for you.
• They’ll be able to do all the product research for you and speak to lenders on your behalf, which will speed up the process.
• Your broker will know the application process by heart and use their experience to guide you through it from start to finish, ensuring you send all essential paperwork to the lender.

Need help finding a broker? Contact us, and we’ll match you with one from our extensive network who can contact you straight away to get started.

What do lenders consider when assessing applications?

Each lender will have its own set of eligibility criteria when it comes to assessing mortgage applications, but, in general, they’ll look at the following:

Income

Lenders will want to know how much you – and anyone you’re buying the property with – earns and whether that income is regular. They’ll do this by looking at your recent payslips or accounts if you’re self-employed.

What to do if you have a complex income

A complex income is earned in a way other than a straightforward salary that’s paid into your account every month.

Freelancers often fall into this category as their salaries fluctuate month-on-month and can be irregular. However, you may have a complex income for plenty of other reasons. For example, you may earn commission or bonuses, work overtime, or be a company director earning a combination of salary and dividends.

While it’s still possible to get a mortgage if you have a complex income, it may be slightly harder as lenders won’t be able to use their standard affordability criteria. However, your broker will be able to identify the right lenders who can best deal with this type of application.

Outgoings

Lenders will request evidence of your outgoings to establish whether you can afford the mortgage. They’ll want to know about credit cards, personal loans, car loans, pensions and childcare costs to ensure you can repay your monthly mortgage.

Age

Many providers have an upper age limit of 75 for taking out new loans. That’s not to say older borrowers can’t get a mortgage. There are plenty of options available. If you fall into this category, you may need to use a provider who specialises in later-life lending.

The role your credit history plays.

Lenders will look at your track record of paying back loans by reviewing your credit history. This will contain all your past loans, including credit cards, mobile phone agreements, overdrafts and mortgages. Your credit reports also record how much credit you were given and how good you were at making the repayments.

Having black marks on your credit reports doesn’t mean you can’t get a mortgage. It may, however, impact the range of deals available to you. If you’re worried about any type of bad credit showing on your report, a broker can identify lenders that specialise in these situations.

Employment

Lenders will take a keen interest in your type of employment to assess how much and how regularly you’re paid. If you’re in what’s deemed ‘non-standard’ employment – for example, you’re self-employed, you work part-time, or you’re a contractor – it could be trickier to get your application approved, but it’s far from impossible.

Most lenders like to see consistency in your employment history, but it is possible to get approved if there are gaps. In these instances, the lending decision might come down to how long the gap is (anything over six months will need a good explanation) and why it occurred.

Property type

The type of property you’re buying could affect whether a lender approves your application. If you’re buying a non-standard property – such as a house with a thatched roof, a listed building, or a barn conversion – you may find it trickier to secure a mortgage.

This is because lenders will be concerned about resale potential if they have to repossess your home. Non-standard properties often require a lot of maintenance and specific insurance, which can be costly. As a result, there tends to be less demand for them.

There are still plenty of lenders who’ll lend to you. Your choice may just be more limited.

Deposit

Lenders will always take into consideration the size of your deposit. Typically, the larger your deposit, the more chance you’ll have of getting your mortgage approved. That’s because lenders will view you as a less risky borrower if you have more money invested in the property.

If you have a sizeable deposit, you’ll probably also have access to a wider range of cheaper deals and rates.

As well as the size of your deposit, lenders will also want to know where your deposit has come from. Lenders have strict anti-money laundering rules to ensure money used for mortgage deposits is legitimate.

There are various ways to prove where your funds have come from, including bank or savings account statements, evidence of a property sale or proof of an inheritance.

Get matched with a broker to guide you through the application process

Whatever your situation, if you’re ready to start the mortgage application process, it’s worth speaking to an independent broker first. They’ll be able to guide you through the journey, ensure you have all the correct documentation, and advocate for you with lenders.

They can also often secure highly competitive deals and may have access to exclusive products that aren’t available to the general public, which could save you money.

Our broker-matching service can connect you with an expert who can help you with the mortgage application process.

Call us on 0330 818 7026 or enquire and get matched with a broker today for a free initial conversation.