So, you've decided to buy a home. Great! Now, a big part of the home-buying process will be applying for a mortgage. 

While the word “mortgage” usually conjures up expectations of faff, stress, and hassle, it doesn’t have to be that way. With the right help, it’s perfectly doable. 

So, how do you actually apply for a mortgage? Let’s run through the basics.

How easy is it to get a mortgage? Understanding your eligibility

Before lenders give you a mortgage, they want to be absolutely sure that you’ll be able to repay it. So, before you even start thinking about mortgages, you’ll want to be clear about your eligibility:

Things lenders will look at before they give you a mortgage

  • Your earnings. This is how much money you reliably earn each month. Lenders need to know it’ll cover your mortgage repayments with enough wiggle room for the unexpected.

  • Your credit score. Lenders want to know that you pay your bills on time (utilities, overdrafts, credit cards), and that if you have loans, you’re on top of paying them back. Note: Here’s how you can find out (and improve) your credit score.

  • Your deposit. This is the amount of money you pay upfront to buy a home. The bigger the deposit (as a percentage of the property price), the less risky lenders will consider your mortgage application to be.

  • The property you want to buy. Once you’ve found a property, you’ll have to tell your lender about its features and physical condition – things like when it was built, how many floors it has, and even what the roof’s made out of. 

Getting a mortgage in principle

One of the first things you can do when you decide to buy a home is get a mortgage in principle (MIP). That’s a certificate showing how much you might be able to borrow, which will give you a more accurate idea of your budget, and make you look more credible to estate agents and sellers. You can get an MIP from a mortgage broker or lender.

Depending on how many questions they ask you, an MIP can also give you an indication of how easy it might be to get a mortgage once you’ve found a property you like. 

With Habito, you can get a free MIP in a matter of minutes, with no credit check. You can also get a super speedy indication of how much you could borrow with our mortgage calculator too.

How to get a mortgage in the UK 

Once you’ve found a property you want to buy, then it’s time to get a mortgage. The only reason you can’t get one sooner is lenders need to know your exact property price and type when you apply for your mortgage. When you have this info, your next steps will be to choose a mortgage, sort out your documents, and do the actual application.

Find a mortgage

There are thousands of mortgage deals out there – so how do you find the one that’s right for you?

A mortgage broker like Habito can help you make sense of your options, and search the whole market (that’s 20,000 mortgages from 90+ lenders) to find your ideal mortgage match 

There are a few different types of mortgages out there. Here are some of the main types you might come across:

  • Fixed rate mortgages. With a fixed rate mortgage, your lender guarantees that your interest rate will stay the same for a fixed amount of time.

  • Variable rate mortgages. With variable mortgages, your interest rate could go up and down from month to month.

  • Repayment mortgages. With a repayment mortgage, you steadily pay back the money you’ve borrowed, along with interest on however much of the capital (the amount you’ve borrowed) you have left. At the end of the mortgage term, you’ll have paid off the entire loan – provided you maintain your mortgage payments.

  • Interest only mortgages. With an interest only mortgage, your monthly payments cover only the interest – not the mortgage itself. Your monthly payments will likely tend to  be lower than with a repayment mortgage, but then at the end of your mortgage term, you’ll still need to pay the entire loan. 

We’ve written loads more about the different types of mortgages here.

Get your documents in order

Now you know what’s out there, it’s time to gather all the bits and bobs to support your application. Different lenders will ask for slightly different things, but almost all of them will ask you about:

  • Proof of ID. That’s a passport or driving licence. If you’re not a British citizen, that means a visa or settlement status too.

  • Proof of address. Lenders will want to see your latest utility bills, council tax bills, and/or your bank or credit card statements.

  • Employment. If you’re full-time employed, you’ll probably need 3 months of payslips and maybe a P60. And if you’re self-employed, tax returns and accounts from potentially the last 3 years.

  • Other income, outgoings, and savings. Lenders will want to see your bank statements and evidence of regular outgoings and income from places other than your employment. They’ll also ask you if there’s anyone financially dependent on you.

We’ve got all the info on what you need to apply for a mortgage

Ask a lender for an agreement in principle (AIP)

An agreement in principle is a statement from a lender that says that, in principle, they’re happy to lend you a specific amount for a specific property. It’s a bit like the first step in your mortgage application proper. It’s also known as a decision in principle.

An AIP is different from a mortgage in principle (MIP), because rather than a basic check of how much you can borrow, it involves much deeper checks. That should give you more assurance that you’ll be able to borrow what you need, for the property you want.

Sometimes estate agents will ask to see an AIP, though if yours doesn’t you should know that this step is optional – you can choose to skip your AIP and go straight to a full mortgage application if you like. Your mortgage broker can advise you on the best course of action for you.

Here’s what an AIP might involve: 

  • A credit check. Depending on the lender, this might be a “soft” check (which won’t affect your credit score) or a “hard” check (which can if you do too many). Your lender will tell you which one it is before they do it.

  • Submitting some documents, including evidence of your income, spending, and employment.

  • Sharing details of the property. You get an  AIP for a specific property, so your lender might ask you for some information about the property you want to buy. 

Habito can help you get an AIP, all online and for free. Get started here.

Sort out a solicitor

Before you apply for a mortgage, you’ll need a solicitor or conveyancer to handle the legal side of the process. That involves things like doing checks on the property to make sure there are no legal problems with it, and drawing up the contracts.

Here’s more about what a conveyancer does.

If you’re looking for a trusted conveyancer to help you buy your home, Habito can help. Our complete home-buying service, Habito Plus can take it off your shoulders and give you one less thing to worry about.

Make a full mortgage application

It’s time to apply for your mortgage! You can do this directly with your lender, or get a mortgage broker to take care of the paperwork for you.

You’ll need to gather up your documents, answer some questions from your lender, and go through a “hard” credit check. Your lender will go through your finances carefully before they make a decision. 

Once you’ve submitted the paperwork, your lender will review your application. This can take between 4 and 6 weeks. After that, if it all goes smoothly, you’ll get your mortgage offer.

What to do after receiving your mortgage offer

After receiving your mortgage offer from the lender, it’s time to review, approve, and sign it. Next, your legal pro (solicitor or conveyancer) will get the final stage in motion, and soon you’ll be able to exchange contracts. This is when you’re officially committed to buying the property.

If your mortgage application is rejected, there are a few things you can do to improve your chances next time round (either with the same lender or a different one). You can read our guide for what to do if your mortgage is declined here.

Tell an expert at Habito about what you need and they'll find the best deal for you. Get in touch today.