The mortgage application process

Once you’ve found your ideal first home and have made an offer, you’ll start your journey through the mortgage application process. Here’s a guide on what to expect:

1. Choose a mortgage provider

There are lots of mortgages to choose from, each very different from the next, so it’s a good idea to do as much research as you can about what’s on offer.

Regardless of whether you apply for a mortgage through a bank or a broker, your lender will want to be reassured that you can make repayments if interest rates rise or personal circumstances change.

It’s likely that your lender will ask you for a number of documents before going ahead with the process, including:

  • Proof of ID for each person applying
  • Proof of current address
  • Proof of income for each applicant
  • Recent bank statements
  • Details of the property you are planning to buy
  • Estate agent details

This information helps your lender begin a process called a ‘fact find’, where they gather information about you and your financial situation.

They’re also likely to create an affordability assessment, where you’ll be asked to provide evidence of your income and spending habits to determine if, and how much, you can afford to pay each month.

At this stage it's worth getting clued up on the different product policies, service fees and charge fees, if any.

What’s the difference between a lender and a broker?

A lender is a financial institution, such as a bank, that makes loans directly to you, while a broker doesn’t lend money - they help find a lender for you and act as a middleman.

2. Have the property valued

Before your mortgage is approved, your lender is likely to check how much your new home is worth and, to do this, it will usually organise for a qualified valuer to visit the property and inspect it. This service is typically paid for by the buyer, even if you don’t go on to buy the property.

During a valuation, a number of factors will be checked:

  • Size
  • Location
  • Type of property, i.e. apartment or house
  • Local environment

It won’t tell you about the condition of the house, but it will give you an estimation of what it is roughly worth.

3. Hire a conveyancer

Signing papers

The legal work, also known as conveyancing, is usually done through a conveyancer or solicitor who draws up a draft contract, setting out the charges and deposits that will be required to complete the home buying process.

Your representative will contact the seller’s conveyancer to share information and request a copy of the draft contract and other details needed, such as the ownership of the property, also known as a ‘property title’.

They’ll also do a set of legal searches to ensure there are no other factors that you should be aware of. Some searches are likely to be recommended by your solicitor and others by the mortgage lender, to protect them from any problems that the property may have.

Common searches include:

  • Local authority searches: To see if there is anything you need to be aware of, like building regulation issues.
  • Drainage searches: To check your new property is connected to sewers.
  • Environmental search: To make sure the land isn't contaminated in any way.

Check which conveyancer you should use with your mortgage provider

Sometimes your mortgage lender requests that you use a conveyancer or solicitor it has approved. Always check with your provider before hiring someone.

4. Receive a formal mortgage offer

When your lender is satisfied that you’ll be able to make monthly repayments, and is pleased with the valuation report and the findings from legal searches, you’ll be given a formal mortgage offer, which is often known as an ‘offer of advance’.

If you’re happy with the offer, it’s time to accept and move onto the legal work.

What is a mortgage in principle?

Also known as a Decision in Principle, a Mortgage Promise or an Agreement in Principle is a statement from your lender that it’ll give you a set amount of money based on your financial information.

5. Sign the completion papers

A couple in a meeting

Once your solicitor receives a copy of the draft contract, they will ensure that everything is in order and that all fixtures and fittings, such as cupboards and lights included in the purchase, are what you agreed when you first made your offer.

A completion date will be made, which is usually four to 12 weeks following the exchange of contracts. Then it’s time to make arrangements to transfer your deposit.

It’s worth taking a final trip to your new house before paying the deposit to ensure everything is still in shipshape condition.

You’re also likely to need to insure your new property against fire and other threats with buildings insurance, which is a common requirement of your mortgage offer.

Once final searches have been made and a transfer deed - a document that transfers property from its legal owner to another - has been signed, your solicitor will ask your mortgage provider for the full amount of money to send on to the seller’s conveyancer.

6. Exchange keys and move in

Once the sale is complete, the seller’s solicitor will confirm that they have received all money due and you’ll own your first home. You’ll then be able to collect your keys and plan your official move.

You’ll have 30 days for your solicitor to send the Stamp Office your transfer deed and for you to pay stamp duty land tax - a lump-sum tax that anyone buying a property or land costing more than £125,000 has to pay.

You may not realise, but during and after the mortgage application process, there could be a number of additional costs to support the home buying process. Take a look at our guide to costs you may not anticipate to plan ahead.

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Read more within our First Time Homebuyers Guide