How to apply for a mortgage

If you are just starting to consider entering the housing market, then everything can be quite daunting if you don’t even know where to start. This helpful guide is designed to take you through the process of applying for a mortgage.

If you are a first-time buyer, then there are a few steps you should go through before you send off a mortgage application.

First, you must check your credit score. If your credit score is good, there is little to worry about, and you can go forward and apply for an ‘Agreement in Principle’, or an AIP. An AIP certificate is a declaration from a lender stating that, based on the basic information provided at this early stage, they will ‘in principle’ be happy to lend to you. This can be attained from a lender over the phone, online, or in your local banking branch, and can be applied for before any offer has been made on a property. Attaining an AIP is not imperative to a mortgage application, but we would not recommend applying for a mortgage without one, as it can help you stand out as a prospective buyer. Once you have attained an AIP you can go forward into a full application for a mortgage.

WARNING: whilst an AIP is a good way to prove to estate agents that you have a good chance of securing a mortgage, it can also be deceptive, as it is not a guarantee. It is also important to consider that to get an AIP you will need to be credit checked, and multiple credit checks can negatively affect your credit score.

When you have an AIP, and your offer on a property has been accepted, you will be able to complete an application for a mortgage. Once you have decided which lender you will apply with you can apply over the phone, online, or in branch. If you would like advice from a Mortgage Consultant when going through your application, then you must apply over the phone or in person at a branch.

In order to progress your application, you will need to provide some documentation, such as:

  • A recent payslip – on paper, or online in original format. This must show: your first, middle, and last names, and address, to match those on the mortgage application; the date of pay; pay amount before AND after tax; any bonuses, commissions, or allowances paid to you; your employer’s name; and any payments deducted directly from your payslip, e.g. student loan.
  • Proof of any other income, e.g. benefits, private or state pension etc.
  • Up to 6 months of your latest full-month bank statements – online or paper form. This must show: your first, middle, and last names, and address, to match those on the mortgage application; your account number and sort code; all incomings and outgoings, matching what has been declared on the mortgage application; the logo of the building society or bank; and a running balance.
  • Proof of identity and address – a selection of the following as specified by the lender: a valid UK passport; valid UK photo driving licence/provisional licence; UK bank statement; letter from professional, i.e. doctor, solicitor, social worker, accountant etc.; valid student card; valid NUS card; gas/electric/phone/water/council tax bill; letter from education facility, i.e. university.
  • Proof of where your deposit has come from – i.e. a series of bank statements, the number required depends on the amount of deposit.