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Mortgage Advisor & Director
Starting your Mortgage Application
Your mortgage application means more to us than just exchanging paper. It's a crucial step in helping you purchase your home, and can represent a significant life milestone. We're here to guide you through the process and make it as easy as possible for you.
Before You Start Your Search
It is important to think about the next steps when it comes to your mortgage and prepare yourself financially in the months and weeks ahead of your application.
If this is your first time buying a house, you may not be aware of all the associated costs and requirements from mortgage lenders. A good mortgage professional will help you understand all these costs and the steps involved so that there are no surprises down the road.
Save for a Deposit
The first step is to start saving for your deposit. Depending on the type of mortgage you choose, you will need 5% - 20% of the purchase price as a down payment. It is important to have this saved up before you start looking for a home so that you know how much you can afford to spend.
The more you contribute towards a deposit, the more equity you have in the property and as a general rule, the better interest rates you're offered.
Get Your Finances in Order
It is important to get your finances in order before starting the application process. This means getting a clear picture of your income, debts, and expenses. You will need to provide proof of income to your lender, so collecting things like payslips, tax returns, and bank statements in advance can help speed up the process.
You should also think about what you can afford in terms of both the upfront costs, such as solicitor fees or moving costs, as well as the ongoing mortgage repayments on your new home.
Improve your Credit Score
Next, you will want to make sure your credit is in good shape. This means paying off any debts that you have and making sure your credit score is as high as possible. Lenders will look at your credit history when considering your application, so it is important to have everything in order before you apply.
Lenders will use this information to assess your risk as a borrower and determine the interest rate they offer you.
If you have a poor credit history, it would be beneficial to take steps to improve your score if you have the means to do so. Having a solid credit file will help to boost your chances of approval and the mortgage deals you're offered by lenders.
Get pre-approved
When you're ready to apply you can get your mortgage agreement in principle.
When you apply for a mortgage, the lender will give you what's called an "agreement in principle." This is not a commitment to lend you the money, but it is a good indication that you're on the right track. The mortgage in principle will outline the amount of money you're eligible to borrow. It's important to remember that this is not a binding contract, so the terms could change when you actually apply for the mortgage.
This gives you an idea of what you can afford and puts you in a stronger negotiating position with sellers. Once you're ready to begin your application, here are some tips to make the process go as smoothly as possible.
Applying for a mortgage: What happens after you've made an offer?
After you've found a property and had an offer accepted, your next step is to formally apply for a mortgage. This is where you'll need to provide more detailed information about your finances and employment history, and the lender will perform checks on the property you're looking to buy.
The mortgage application process can be time-consuming, so it's important to be prepared before you start. Once you've gathered all the required documentation, you can begin the formal application process with your chosen lender. The first step is usually an assessment of your finances and employment history. This is followed by a credit check and an appraisal of the property you're looking to buy. Once these steps are completed, you'll be given a decision on your mortgage application.
If you're approved, the next step is to get a formal mortgage offer from the lender. This will outline the terms and conditions of your mortgage, including the interest rate and repayment schedule. Once you've accepted the offer, the mortgage will be finalised and you'll be on your way to becoming a homeowner!
Get your mortgage in principle certificate in 5 minutes
What you need to apply for a mortgage
To complete your application, we'll need some documents from you. These can vary between lenders but they will all typically need evidence of your income, identification, and proof of address.
Be prepared with the following documents:
- Evidence of income from employment (this will be different if you're self-employed)
- Your most recent bank statements (to verify savings)
- Documentation of any other income you receive, such as child support or disability payments
- Your tax returns for the past two years (to verify self-employment income)
- A list of all debts and financial obligations, including credit card and loan balances
- Details of the home you wish to purchase
- The name and contact information for your solicitor/conveyancer
- The source and amount of your deposit - if it's a gifted deposit you'll need a signed letter from the gifter
- Proof of identity, address, such as utility bills or lease agreement
How long does a mortgage application take?
Depending on the lender, the mortgage process can take several weeks to complete, so it's important to be prepared before you start. The first step is usually an assessment of your finances and employment history. This is followed by a credit check with one of the three credit reference agencies, and an appraisal of the property you're looking to buy. Once these steps are completed, you'll be given a decision on your mortgage application.
If you're approved, the next step is to get a formal mortgage offer from the lender. This will outline the terms and conditions of your mortgage, including the interest rate and repayment schedule. Once you've accepted the offer, the mortgage will be finalised and you'll be on your way to becoming a homeowner!
Can I make an offer before getting a mortgage deal?
If you're buying a property, you'll typically need a mortgage in principle in place before you can make an offer. This is because most sellers will want to know that you're serious about the purchase and have the finances in place to complete it.
A mortgage in principle is a statement from a lender that they're willing to lend you a certain amount of money, based on an assessment of your financial situation. It's not a binding offer, but it does give you an indication of how much you could borrow and can make offers more attractive to sellers.
To get a mortgage in principle, you'll need to provide some information about your finances and employment history. Once you have a mortgage in principle in place, you can start the process of finding a property and making offers.
You can start the property search before you have a mortgage in principle, but it's worth getting one in place before making any offers. This is because most sellers will want to know that you're serious about the purchase and have the finances in place to complete it.
When should I start the mortgage process?
Ideally, you should start the process a few months before you plan on buying a property.
This will give you time to gather all the necessary documents and get your finances in order. It will also mean that you're not rushed into making a decision on your mortgage.
What should I do if my application is rejected?
If your application is rejected, don't despair. There are usually ways to improve your chances of getting approved the next time around. At the end of the day, a mortgage lender will want to see that you can afford the monthly payments both now and in the future.
If you're rejected, ask the lender for feedback on why your application was unsuccessful. They may be able to give you some tips on how to improve your chances of getting approved next time. You can also try applying with a different lender. In general, and particularly in this situation, we recommend working with an experienced mortgage broker who can not only find you the right mortgage but also help to improve your chances of approval.
Can you apply for a mortgage completely online?
Yes! Teito is an online mortgage advisor. We'll help you compare mortgage deals from a range of different lenders, and our team of experts are on hand to answer any questions you have.
So if you're thinking about applying for a mortgage, why not give us a try? Get started now and you could find your perfect mortgage in minutes.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
Last updated 21 February 2024