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How to apply for a mortgage in four steps

Want to apply for a mortgage? It’s time to get organised. Find out what you need to apply and how to take the first steps to owning your own home.

Want to apply for a mortgage? It’s time to get organised. Find out what you need to apply and how to take the first steps to owning your own home.

Written by
Alex Hasty
Insurance comparison and finance expert
Last Updated
20 DECEMBER 2022
5 min read
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How to get a mortgage in four steps

When you’re venturing on to the property ladder for the first time, the mortgage process can seem like a mountain to climb: the costs, the checks, the paperwork. Add to that the cost-of-living crisis and it’s understandable you might think owning a home is out of your reach.

But owning your home is achievable and the process is easier than you may think. Follow our step-by-step guide to getting a mortgage and find out how to improve your chances of securing a property you can happily call home.

Step 1: review your finances to understand what mortgage you can afford

Lenders will only offer you a mortgage if they’re confident you’ll be able to afford the repayments. When it comes to checking your finances, they’ll leave no stone unturned: incomings, outgoings, credit history, existing debts, even a stress test to determine if you can still afford your repayments should interest rates rise or your circumstances change further down the line.

Before you start searching for a mortgage, get your finances in order and build up your credit score. Check your credit report before a lender does. It will give you details about your payment history and time to correct any mistakes that could affect your score. 

Once you have a grasp of your financial situation, use our mortgage calculator to get an idea of how much you could borrow and what it might cost you. When you’re doing your sums don’t forget about the other costs you’ll need to pay, such as legal fees, survey fees, stamp duty if applicable, moving costs and any mortgage fees. 

Deposit-wise, you should aim for at least 10% of the property price. If you can raise more, it will open the door to better mortgage deals with lower interest rates.

If you’re a first-time buyer and struggling to save enough deposit, a government-backed affordable homeownership scheme could help you get on the property ladder:

  • Mortgage Guarantee scheme – allows buyers with just a 5% deposit to apply for a 95% mortgage from a participating lender. 
  • First Homes scheme – homes are offered to first-time buyers and key workers at a discount of 30% to 50% off the market price.
  • Right to Buy – gives tenants who rent from a council or local housing association the chance to buy the home they live in. 
  • Shared Ownership – allows you to buy a share of a home and pay rent on the rest. 
  • Lifetime ISA – a savings account for under-40s with a 25% government boost to help you save for a deposit on your first home more quickly.

Find out more in our guide to first-time buyer mortgages.

Top tip 

Lenders check the electoral register to confirm you are who you say you are, so make sure you’re registered to vote. It’s one of the quickest ways to boost your credit score.  

And a bonus tip…

Lenders like stability, so don’t change jobs just before you apply for a mortgage.

Step 2: weigh up your mortgage options and gather the information you need

When you have a rough idea of how much you could borrow, you’ll need to decide if you want to research mortgage deals yourself or use a qualified broker.

A broker will give you options from a wide range of lenders and use their experience to understand what mortgage rates you’re likely to qualify for. Some brokers will charge you a fee, but we‘ve partnered with London & Country Mortgages Ltd (L&C)** to provide you with fee-free mortgage advice.

Go to L&C Mortgages

**London & Country Mortgages Ltd (L&C) are a multi-award winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002). L&C are not part of Compare the Market Limited. Compare the Market receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria. L&C will not charge you a broker fee should you decide to proceed with a mortgage.

The documents you’ll need

You’ll need to be able to show a mortgage broker (if you’re using one), then your chosen mortgage provider, that you can afford the mortgage you’re asking for. Documents you’ll need typically include (but aren’t limited to):

  • Passport or full UK driving licence – as proof of identity 
  • Utility bills in your name
  • Bank statements – usually for the past three to six months
  • P60 form from your employer
  • Proof of any benefits received
  • Payslips – for the past three months
  • Evidence of the deposit you’re putting towards a property
  • Other financial details, like child maintenance or personal expenses. 

If you’re self-employed, you’ll also need to provide: 

  • Two or three years’ accounts from an accountant
  • Tax form SA302
  • Other evidence of your income, like bank statements. 

Some lenders won’t accept printed online bank statements, so factor in the time it will take to get hold of originals or certified copies, if required. 

Step 3: secure an agreement in principle

Once you’ve found a mortgage deal you like, you’ll naturally be keen to start house hunting. But hold your horses – it’s best to first get an agreement in principle. 

An agreement in principle (AIP) is a statement from a mortgage provider giving you an indication of how much they’re prepared to lend you, based on your financial details. It can also be known as a mortgage promise, a decision in principle or approval in principle. An AIP is not a guaranteed mortgage offer – it’s just the first step. 

Having an AIP before you start house hunting shows estate agents you’re serious about buying a property. In fact, some estate agents will insist you have an AIP before they’ll show you around houses. An AIP can also make you a more attractive prospect to a seller, as it shows you’re more likely to get the mortgage you want and that you’re ready to proceed. 

An AIP typically lasts for 90 days, but it can be as little as 30 days. If you haven’t found your dream home by the expiry date, you might have to ask for an extension or apply for another AIP if your potential lender wishes to recheck your financial situation. 

Step 4: find a property you love, then apply for a mortgage

While many homebuyers have everything lined up before they start searching for a new home, others will simply calculate what they think they can afford and dive straight in looking for their dream property. If you do this, it’s a good idea to get an AIP sorted out as soon as possible to set the minds of estate agents and property sellers at rest.

Make an offer 

Once you’ve found a property you love, you should submit your offer through the estate agent. If the seller’s interested, you can start negotiating on price.

Make a formal mortgage application 

If your offer is accepted, you can begin the full mortgage application process. At this stage, the lender will carry out a full credit check, which is an in-depth look at your financial activity. The lender will be able to see all your bank and credit card accounts, plus any other credit activity like outstanding loans or utility bills. A lender will also check to see if you’ve made credit repayments in full and on time. 

Receive a formal mortgage offer

If your credit report is healthy and the lender is happy with your application, you’ll receive a formal mortgage offer, usually within four weeks. It can take longer, for example, if there’s an issue with the valuation, or more information and documents are needed.

Once a formal mortgage offer has been made, it’s usually valid for six months. The house-buying process on average, takes around 15 weeks, so you’ll have the time needed to complete. You should receive your first mortgage payment notification within five to seven working days from the date of completion.

Your home or property may be repossessed if you do not keep up with your mortgage repayments. 

Frequently asked questions

Where can I apply for a mortgage?

You can apply for a mortgage from a bank or building society. You can do this in person in a branch or you can apply online. If you apply for a mortgage online you won’t receive advice from the lender. This means you’ll have to make your own decisions about which mortgage is right for you and your situation.

If you’ve never applied for a mortgage before, you might want to get advice from a mortgage broker or financial advisor. Our partners London & Country Mortgages** can provide you with fee-free mortgage advice.

What can I do to boost my chances of getting a mortgage?

There’s a few things you can do ahead of time to give your application the best chance of success.

  • Check your credit score and have any mistakes corrected. 
  • If you’re making a joint mortgage application, have the other person check their credit record too.
  • Get your finances in order – cut down on any unnecessary borrowing, make sure all your bills are paid on time and cut back on your outgoings, if at all possible, so lenders can see that you have enough money to afford a mortgage.
  • Don’t apply for other loans or credit cards around the time you make your application. This could be a cause for concern for lenders as they’ll think you’re struggling with your finances.

Can my mortgage offer be withdrawn or the rate changed?

There are some situations where a lender will reserve the right to withdraw a mortgage offer. For example:

  • There’s a significant change in your circumstances
  • Something dramatically affects the property’s valuation before completion
  • Fraud is suspected or your application contains false information.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.

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Alex Hasty - Insurance comparison and finance expert

At Compare the Market, Alex has had roles as Commercial Associate Director, Director of Trading and Director of Growth. He’s currently responsible for the development and execution of Comparethemarket’s longer-term strategic options, ensuring the right breadth of products and services that meet customer needs.

Learn more about Alex

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