If you’re wondering how to get a mortgage, you’re not alone. For many people, the process can be pretty overwhelming, so here’s some guidance. 

We’ll talk through each step, outlining the basics that lenders look for, the documents you need at each stage, and the different types of mortgage to choose from.

Can I actually get a mortgage?

There are a few essentials for you to be eligible for a mortgage in the UK including:

  • You’re the right age. You’ll need to be 18+ to borrow money for property (and the minimum age is often higher for buy-to-let mortgages). Some lenders (but not all) don’t lend to the over-55s or those nearing retirement age.

  • You have UK residence, UK job, and/or UK income. You can buy UK property with cash from anywhere in the world (after anti-money laundering checks), but if you want a mortgage you’ll need a UK income or a right to reside in the UK. And for your credit check (which you’ll have before getting a mortgage) you’ll need to have at least 3 years’ address history in the UK, too.

  • Your credit score is up to scratch. It’s not impossible to get a mortgage if you have a poor credit score, but it can sometimes be difficult. If your credit score is lower, you might need to find more than 5-10% for the deposit, have a guarantor (someone who will pay your mortgage if you can’t), or settle for a higher interest rate.

    Find out more about improving your credit score for a mortgage here.

  • You have a steady income. Most lenders want to see a minimum salary of somewhere between £10,000 and £20,000 — although this can vary. Either way, evidence of a steady income over the last few years will show lenders that you can manage mortgage repayments. This is particularly important if you’re self-employed.

  • You’ve never had a home repossessed. If you’ve had a previous mortgage that went unpaid, many lenders are unlikely to offer you another mortgage.

  • You have a deposit above 5% of the value of the property. 5% deposit mortgages tend to be the minimum these days (like if a property costs £200,000, the deposit will be at least £10,000). And lots of mortgage deals still need a deposit of 10% or more. 

How to get a mortgage: 7 steps

If you’re eligible for getting a mortgage in the UK, the process usually involves these steps: 

  1. Gathering your deposit
  2. Working out how much you can borrow
  3. Getting your paperwork together
  4. Finding the property you want to buy
  5. Researching the right type of mortgage for you
  6. Shopping around for the best mortgage and the right lender
  7. Getting legal assistance, and sealing the deal

Here’s a breakdown of each step.

1. Gathering your deposit

If you’re planning to go for a £200,000 property, a 5% deposit would be £10,000, a 10% deposit would be £20,000, and a 15% deposit would be £30,000. Generally, the bigger the deposit, the more mortgage deals you’ll have to choose from. This is because a bigger deposit means a smaller mortgage loan and less risk for the lender.  

If you're a first-time buyer in the UK, you may have access to government schemes which can help you get onto the property ladder.

2. Working out how much you can borrow 

Next, it’s time to figure out how much you’ll be able to borrow. A quick calculation can give you an idea - think about these things:

  • Your income. Many lenders tend to cap what they lend to 4.5 times your income. There are some jobs that let you borrow more (like if you’re a doctor).

  • Your outgoings. If you have a lot of expenditure monthly – like on transport, loans, utilities, or child care – it is likely to affect how much you can borrow.         

  • Your credit score. Your credit score can affect your eligibility for a mortgage, the amount you can borrow, and the amount of interest you might need to pay. This is because a poor credit score poses a bigger risk for the lender.

If you want a clearer idea of how much you can borrow, you can get a mortgage in principle (MIP). It’s a certificate from a lender or broker that says how much they could lend you. It’s not legally-binding, but it does give you an idea of what’s possible.

Use our mortgage calculator to get a clearer idea of how much you can borrow and get your mortgage in principle from Habito in a matter of minutes.

3. Getting your paperwork together

Now it’s time for a bit of admin. To make sure the mortgage process runs smoothly, you’ll need a few documents at the ready:

  • Proof of identification. Something like your passport or driving licence. If you’re not a British citizen, you’ll need your residency documents or a visa.

  • Proof of address. A bank or credit card statement, or a council tax or utility bill.

  • Employment details and income. You’ll need payslips for 3 months and a P60 if you’re employed. If you’re self-employed, you’ll need up to 3 years of business accounts and tax returns. Click here to learn more about getting a self-employed mortgage.

  • Other income, expenses, and savings. If you have any other income, you’ll need to show evidence of it. Also, lenders will need to see bank statements to  understand your outgoings and any income from savings.  

It’s best to get this info together before you start the application process.

4. Finding the property you want to buy

Here’s the fun bit. Now you know what you can afford, you can go and check out some properties on the market. Maybe even plan the colour scheme, kitchen, or imagine yourself chilling out on the sofa. Lovely.

5. Researching the right type of mortgage for you

Just like homes, mortgages come in all shapes and sizes. It’s useful to know which one suits you best, because different mortgages have different benefits, drawbacks, and eligibility criteria:

  • Fixed rate mortgage. For many buyers in the UK, a fixed rate mortgage is the go-to option. Once you get the mortgage, the interest rate is fixed for the time you’ve agreed. This can be 2 years, 5 years, 10 years, or even up to 40 years with Habito One.

  • Variable rate mortgages. These are tracker mortgages or standard variable rate mortgages. The repayments change as interest rates change, which is something you can’t control. You might get a very good deal, or could end up paying more if the interest rate rises.

  • Interest only mortgages. These days, interest only mortgages are mainly for buy-to-let mortgages (when you buy a property to rent it out). With interest only mortgages, you only pay back the interest every month, and pay back the full sum at the end.

o   Retirement interest only mortgages are designed for retired people. You only pay the interest monthly and repay the full sum if you sell the house, pass away, or go into care.

All this choice can be a lot to take in. At Habito, we’re a whole-of-market mortgage broker, and we’re also a lender — so we can help you get to grips with all the different options. We’ve got over 20,000 deals to show you from over 90 different lenders. Take a look.

6. Shopping around for the best mortgage and the right lender

With the right type of mortgage in mind, it’s time to find the right lender. They all offer different rates, eligibility criteria, and benefits with each mortgage deal. 

After choosing the right mortgage (possibly with the help of Habito), you can apply for an agreement in principle (AIP). An AIP shows that a lender is happy to give you a certain amount for a certain property. It’s still not 100% guaranteed that you’ll get the mortgage, but it’s a sign that you’re on track.

For an AIP, you’ll usually need:

  • A credit check. This may be a soft or hard credit check, depending on the lender (find out the difference between the two). They’ll let you know if it’ll impact your credit score, because too many hard checks in a short time frame might be seen as a bad thing.

  • Documents that show your income and expenditure. This gives the lender an idea about your finances and whether you’ll be able to make the monthly repayments.

  • Details of the property. Because the mortgage will be for a specific property, the lender needs to know some details.

If you’re looking for an AIP, visit Habito - the application shouldn’t take more than half an hour to complete and you’ll get your AIP back in less than 48 hours.

7. Getting legal assistance, and sealing the deal

At this point, you’re almost finished with the mortgage application process. All of the documents get sent to the lender as a formal application.

To finalise things, you’ll need a solicitor or Licenced Conveyancer. They’ll make sure the whole process is legitimate, plus they’ll double check a few things:

  • They’ll make sure that the contract is legally correct
  • They’ll check that there aren’t any legal problems with the property (like making sure it’s not on land which is subsiding or that anyone else claims they own it). 

If you want to make this part easier, check out Habito Plus.  It lets you track your mortgage, legal  work and survey, all in one place.

How long does it take to get a mortgage?

The whole process can take 4 to 6 weeks once you’ve submitted your application. And if you choose Habito, we’re with you every step of the way. A personal expert will find the best option for you, handling the entire process from start to finish.

Getting a mortgage takes planning, organisation, and (a little patience!), but when you get those keys in your hand, it’ll all be worth it. Ready to get started?