COVID-19: Find out more on how we can support your conveyancing journey

Worried about the mortgage process when buying a home? First-time buyers are not the only ones confused and frustrated over applying for a home loan.

Even those who have bought and sold a home before or gone through a remortgage can often feel bogged down by the demands of a lender.

Read our guide to the mortgage process so you know what to expect when you apply for a home loan.

Kickstarting the mortgage process

You need to decide which lender to approach. Each mortgage lender will offer a variety of different loans and different rates that appeal to different types of buyer.

Many home buyers find it easier to use a mortgage broker or adviser to find the best deal for their circumstances.

Do your homework on any mortgage adviser to ensure they are independent and regulated.

Decide repayment priorities

Decide what’s most important to you from a mortgage. You might want a low interest rate, a repayment rate that’s fixed for a period of time or one where you only need a small deposit.

You will have to go through affordability tests that demonstrate you can make your mortgage repayments even if you hit financial difficulties.

Lenders will check your income, your outgoings and your credit history. Make sure you can produce salary slips from the last six months at least. And if you’re self-employed, have any accounts or income ready for examination.

This part of the mortgage process can be slow and laborious if you can’t access those details easily.

Producing documents

The broker or loan adviser in branch will tell you what documentation you need to bring. That information will dictate what kind of loan you will be offered.

This will include:

  • Proof of ID – a passport or driving licence
  • Evidence of address – utility bills or a council tax demand
  • Proof of income – payslips or accounts if self-employed
  • Evidence of outgoings – bank and credit card statements

Getting an agreement in principle

An agreement in principle is a pre-approval of the mortgage that is based on the information provided and a credit score.

This is a good indication that the mortgage will be approved but not a guarantee.

However, having an agreement in principle also tells sellers and estate agents you are a serious buyer. And it means the mortgage process should progress much more quickly once you apply officially.

Full underwritten application

Once you have found a property you want to buy, you will make a full application to the lender for a mortgage.

The lender will now check all the details and documentation you have provided. If all is in order, the lender will authorise the mortgage, subject to the valuation on the house. The valuation confirms that the property you want to buy is worth the money they’re lending on it.

Mortgage offer completes process

Once the application has been approved, the lender will send you a letter confirming the mortgage offer. They will also send a copy to your solicitor who can then confirm you have the funds to buy the property to the seller’s solicitor.

Full application to approval can come in a matter of hours, though it is more likely to be approved within a couple of days.

And this is the point at which the mortgage process is complete.