How To Submit Your Mortgage Application

A Person Handing over a Mortgage Application Form

Getting a mortgage is one of the biggest steps you can take towards your financial future. For many of us, this is the single biggest loans we ever take on, and it can feel overwhelming. It is a long-term commitment and one that can have significant ramifications on not only your budget but on your long-term goals. The best way to combat this sense of intimidation is to equip yourself with knowledge on how to get a mortgage. Understand the process; it’ll help you move forward with confidence.

In this guide, we will cover information on how to apply for a mortgage and what that process looks like.

Before You Make a Mortgage Application

Let’s start with the basics: how do mortgages work? It is a loan specifically used to buy property. You borrow a set amount from a lender, and because it is a “secured loan,” the financial institution has the right to repossess your house/property if you cannot meet the terms of your loan (i.e. you cannot repay the amount borrowed plus interest and make regular monthly payments). In other words, the house is the collateral in case you cannot make payments.

When you get a mortgage, you have a set amount with which to buy a property. You will then pay that amount back, with interest, over a specified period (e.g. 30 years). At any time within that window you fail to meet the terms of the agreement, the lender can take action.

Thus, before you even apply for a mortgage, you should have your budget ironed out. What can you afford? How much ‘house’ can you afford? What will you do if your income changes or life throws a curveball? It is important to have some emergency savings and contingency plans in place.

How does a mortgage work? Once you know how much you can (and need to) put down for a deposit, you can work out how much you can borrow to cover the cost of purchasing a house. Again, be cognizant of how much you can realistically afford.

When you apply for a mortgage, it is also important to remember to factor in other costs, such as estate agent fees, lender fees, solicitor/conveyancer fees, stamp duty, building and contents cover and the like.

The Mortgage Application Process UK

Applying for a mortgage is a big step – and it is one you should only take when you have done the preparation work we discussed above. We all look forward to ‘house hunting’ and finding the perfect property. But ownership involves more than that. It’s the nitty-gritty of getting your finances in order, doing your research and ensuring you know as much about the process as you can.

Let’s take a look at the mortgage process.

Research Mortgage Options

Before you consider how to apply for a mortgage, look at where to apply. You need to find the right deal and terms. Conduct some initial research into the types of mortgages different lenders offer. Keep in mind, though, that when applying for a mortgage, the lender will conduct a ‘hard credit check.’ This will impact your credit score. Only apply when you feel you have found the right fit for you.

Get Your Documents Organised

One important step when it comes to how to get a mortgage is making sure you have the right documentation available. Paperwork makes the world go ‘round. Be prepared to provide:

  • Proof of identity (e.g. driving license, passport)
  • Proof of address (e.g. utility bill, bank statement, council tax bill, etc. You will likely need at least two different recent documents)
  • Bank and credit card statements
  • Proof of employment

Secure Your Mortgage Agreement In Principle

First, what is the ‘mortgage in principle; meaning? This is when, after applying for a mortgage, the lender agrees (‘in principle’) to provide you with a loan for a property, based on your credit history. This is contingent upon approval and final checks of the house you want to purchase. So it’s not a ‘mortgage’ – yet. Rather it’s an indication that you are a serious buyer and, if all proceeds to plan, you will have the funds necessary to complete a transaction.

An AIP is a signal to sellers that you are a legitimate contender, which can help with negotiations. It also helps you establish a firm budget so you can put your energy into properties within your price range.

Some people consider an AIP a ‘mortgage offer.’ It is, in a way. It is not a guarantee – but it is a good sign that you will qualify should everything in your financial situation remain steady. Now, how long do mortgage offers last? Typically an AIP is good for six months. If this period expires before you find a property, you may need to obtain a new agreement in principle.

When you have your AIP, you can start house hunting in earnest. Target properties within your price range and remember not to bite off more than you can chew – that is, focus on homes within your budget to avoid wasting your time.

Apply for a Mortgage

Wait, didn’t you already apply for a mortgage? Well, you completed the first steps. As mentioned, the AIP is not a final mortgage. Once you find a house you want to purchase and have made an offer that’s been accepted, make a formal application for a mortgage. Be prepared for more paperwork!

What do I need for a mortgage?

You will need to furnish proof of identity, address and funds for your lender. They want to see that you have sufficient financial means (via steady income, gifted money and other assets) to qualify as a ‘good risk’ for a mortgage. This information will be verified by an underwriter. If you want a mortgage to get your documents in order ahead of time to avoid delays.

How long does it take to get a mortgage offer? This is the next logical question. The answer is that it depends on the underwriting process and the checks conducted. It will also depend on the valuation of the property you want to purchase. It must be worth the asking price. Depending on the results of your credit checks, the lender will finalise interest rates and other terms.

Your Formal Mortgage Offer

When answering the question, ‘how long does a mortgage application take?’ it is important to realise that the answer can vary depending on your circumstances. One of the factors involved is the valuation of the property you want to purchase. It can take up to four weeks to get an offer. This can be extended if there are valuation issues, if you do not provide sufficient documentation, if more information is required, if your application is complex or… if your lender is busier than typical.

Remember, though, when you think about matters such as how long it takes to get a mortgage approved, also think about how long mortgage agreements last. This can be years and decades of your life. You want to be as informed as possible to avoid surprises later on. While an unexpected birthday party or gift may be welcome… surprises in your mortgage and financial situation certainly are not!

When you accept your formal mortgage offer, you can then move to instruct a conveyancer or solicitor to take you through the next part of the house-buying process. You will need to pay a deposit to this professional and be prepared to exchange contracts. Note that nothing is set in stone until you exchange contracts; typically buyers and sellers both want to make sure everything moves seamlessly forward.

Do mortgage lenders do final checks before completion in the UK? Absolutely. Before you can go towards completion, your solicitor checks to ensure that all of your mortgage conditions are met and then put in a request for funds from your lender. The lender will also conduct some checks to make sure that nothing major has changed in terms of your credit rating and/or income.

After you exchange contracts, the sale is binding. You cannot back out, nor can the seller.

Mortgage Requirements UK

The mortgage application process may seem arduous and complicated. Well, it can be. But think of it as a journey with stops put into place so you remain safe and protected. Make sure you have your budget and documentation in good shape, and then go through the next steps with greater confidence.

The mortgage process UK is similar to other countries and you will be required to provide the paperwork mentioned above (e.g. proof of identity, address and funds). Additionally, most lenders require buyers to have a 20 per cent deposit when applying for a mortgage. (This varies; some require 5-10 per cent for those who have owned homes before and 15 per cent for first-time buyers). This indicates to them that you are a good candidate for a significant loan – and it will also reduce the amount of your mortgage principle and the subsequent interest.

Know that you have a better understanding of how mortgages work, you can do your research and apply for a mortgage online or in person with a trusted lender.

Learn More

In this guide, we have covered the basics of house loans, and the process, and answered questions such as ‘how long does it take to get a mortgage?’ If you have further questions, speak with a qualified estate agent, solicitor, conveyancer, lender or financial advisor. You may access free help from sources such as Citizens Advice, through your bank or financial institution and many other resources. Reach out; it can make a tremendous difference in everything from preparing financially to completing applications.

Learn as much as you can about the mortgage application process, and it will go much more smoothly for you. This is an exciting time in your life; make the most of it!

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