As a whole of market mortgage broker we have helped many people through this process so wanted to share some insight of how it works.
In this guide, we will break down the steps involved in the mortgage application process in the UK.
Preparation for applying for a mortgage.
What is your budget?
Before you start the process of applying for a mortgage it is important you establish your monthly budget. A great way to do this is to assess your monthly income, expenses and any other commitments you have such as credit cards, car finance, loans etc.
Knowing what monthly payments you would be comfortable paying will help establish what size of mortgage you should be applying for. We will go through this with you to help you fully understand your monthly budget.
It is also a good idea to consider how much you are willing to put towards a deposit. The amount of deposit you put down will have an impact on what mortgage products you will be eligible for.
This is something we can discuss with you and will be able to help you establish what level of deposit best works for your circumstances.
Other costs involved with the mortgage process.
Aside from your deposit there will be other fees that are payable during the house buying process.
You may need additional funds to cover things like survey cots, broker fees, lender fees and solicitor fees.
These costs can add up, so it is important to understand them upfront. We will help guide you with these and talk you through how much you might expect to pay.
The Mortgage Application Process
Step 1: Get your documents together
When applying for a mortgage you will need to provide certain documents, so it is a good idea to get these together from the start to avoid any delays later down the line.
The documents you will likely need are:
Proof of Identity – Typically this would include passport or driving licence.
Proof of Address – this could be driving licence, utility bill, bank statement or council tax bill. Any statements will need to be dated within the last three months.
Bank Statements – A lender will normally request to see your latest three months bank statements. This is so they can get an idea of your spending and money management.
Proof of Income – This will normally include your latest three months payslips if employed. If self-employed you will ned to produce your tax returns which could be up to three years history (some will only need two or one years).
Step 2: Get an agreement in principle.
An agreement in principle is an official estimate of how much you can borrow from a mortgage lender. This is produced by a lender after an initial assessment and credit check has been done.
As a mortgage broker we will help you establish which lender best fits your circumstances and will find you a suitable mortgage product. Once you are happy with the mortgage we have found we will then process the agreement in principle for you.
This is important as an agreement in principle tells you how much you can borrow which means you know exactly what value of properties you should be viewing and what you can offer.
Step 3: Submit a full mortgage application.
Once you have found a property and had an offer accepted the next step will be to get a full mortgage application to the lender. We will complete this for you and will submit all requested information to the lender.
The application will then go through an underwriting process which involves full assessment of your application.
The type of things a mortgage lender will be assessing are:
- Credit File
- Bank Statements
- Valuation of property
We will supply the lender with all relevant information and will deal with them on your behalf. This helps take away the stress of dealing with the lender and being caught up in emails and phone calls progressing your application.
Step 4: Receive your mortgage offer
Once everything has been accepted by the lender they will issue you with a formal mortgage offer. A mortgage offer will normally be valid for six months from the date of issue however this can vary from lender to lender and we will advise you on this.
We will go through the mortgage offer with you to make sure you fully understand the terms and conditions of the mortgage.
If you’re thinking of applying for a mortgage then get in touch and see if we can help you.
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.