How to apply for a mortgage: step-by-step guide
Discover how to apply for a mortgage with this step-by-step guide. Whether you are a first-time buyer or remortgaging, understanding the mortgage application process helps you prepare documents, calculate affordability, and choose the right product. By following each step, you can make the application smoother, avoid delays, and increase the chances of approval when applying for a mortgage.
Step 1 — Check how much you can afford
Before applying, assess your mortgage affordability to determine how much you can realistically borrow. Review your income, expenses, and debts, and apply the lender’s LTI multiplier.
Use a mortgage calculator to test various scenarios, such as interest rate changes and different repayment terms. Understanding your borrowing capacity helps you plan your budget, select the right product, and avoid overstretching your finances during the application process.
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Your estimated monthly payment could be:
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Step 2 — Prepare your documents
Before applying, collect all documents required for mortgage approval. These typically include:
- Photo ID (passport or driving licence)
- Recent payslips or proof of income
- Bank statements showing regular income and expenses
- Proof of deposit
- HMRC Tax Calculations (sometimes referred to as SA302’s) and Tax Year Overviews if self-employed as a sole trader or significant shareholder of a Ltd company
- Latest years finalised company accounts if self employed as a significant shareholder of a Ltd company
Knowing what you need to apply for a mortgage helps verify income and affordability, reduces delays, and ensures the mortgage application process runs smoothly.
Considering mortgaging? Ask an expert for advice on what to do next.
Step 3 — Get a decision in Principle (DIP)
A decision in principle (DIP), also known as a mortgage or agreement in principle, is a preliminary assessment by lenders to estimate your borrowing capacity and check whether you have the credit history of someone they consider safe lending to.
If the lender carries out a soft credit check at this stage, it does not impact your credit score and is usually valid for 60 to 90 days. While a DIP is not a full mortgage offer, it clarifies your borrowing limits and can strengthen your position when negotiating with sellers.
Step 4 — Submit your full mortgage application
After receiving a DIP, and once you have a property you wish to arrange a mortgage on, you can apply for a mortgage by submitting a full application. Lenders will conduct a hard credit check and review all required information and documents, including proof of income, deposit, and general expenditure.
The application then goes through underwriting, where the lender assesses and verifies your documentation and information. Understanding the mortgage application process helps you prepare your documents correctly, avoid delays, and increase your chances of approval.
Step 5 — Property valuation
When you apply for a mortgage, lenders arrange a mortgage valuation to confirm the property is a suitable enough risk for them to secure a mortgage on. This process protects the lender and can determine how much they will lend.
A home survey is a more detailed inspection of the property’s condition, identifying potential issues that could affect its value or require repairs. While not always required by lenders, it gives buyers extra confidence before completing the purchase.
A standard mortgage valuation focuses on the property’s market value, while a home survey assesses its condition. The right choice depends on your priorities and risk tolerance when buying.
Step 6 — Receive your mortgage offer
Once your application and valuation are complete, the lender will issue a mortgage offer once they’re satisfied. This confirms the amount they are willing to lend and the terms of the loan.
Most offers are valid for a limited period, typically 90-180 days, so it is important to complete the purchase within this timeframe. Knowing how long a mortgage offer lasts helps buyers plan the exchange and completion process efficiently.
Step 7 — Exchange and completion
The final stage is the exchange of contracts, when both buyer and seller sign legally binding agreements, and the deposit is paid. After exchange, the completion day is set when mortgage funds and your deposit are released to the vendor and ownership of the property transfers to you.
Understanding this stage ensures buyers are prepared for key deadlines, coordinate with solicitors, and complete the purchase smoothly.
Frequently Asked Question
How long does a mortgage application take?
Mortgage applications typically take 2 to 4 weeks, depending on your finances and the lender’s process. Straightforward cases may be quicker, while self-employed applicants or unique properties may take longer. Planning ahead allows for valuations, underwriting, and additional checks without delaying your purchase.
What credit checks happen during a mortgage application?
Lenders usually (but not always) conduct a soft credit check when issuing a DIP, which does not impact your credit score. A hard credit check is performed during the full application to assess your borrowing risk. Maintaining a strong credit history, paying debts promptly, and avoiding new credit before applying can improve your chances of approval.
Can self-employed people apply for a mortgage?
Self-employed applicants can apply for a mortgage, but lenders require extra proof of income, such as SA302’s, business accounts, or a qualified accountant’s reference. Preparing these documents in advance speeds up the process and helps lenders accurately assess your income.
How does remortgaging work?
When remortgaging, lenders review your current mortgage and financial situation. The process is similar to a new application and may involve early repayment charges if you switch deals before your current deal is due to end. Reviewing your mortgage terms and planning ahead can help you save money and secure a better rate.
Can I get an interest-only mortgage?
Interest-only mortgages are available for those seeking lower monthly payments. Payments cover only the interest, with the principal balance repaid at the end of the term, often through sale, refinancing, or savings. Lenders require a clear repayment plan and may apply stricter criteria and affordability checks.
Are there government schemes?
First-time buyers can access schemes such as Help to Buy, First Homes, or Shared Ownership. Each has specific eligibility criteria, deposit requirements, and property value limits. Identifying the right scheme can help you find affordable options and lower upfront costs.
Should I apply directly or use a mortgage adviser?
A mortgage adviser can dramatically simplify the process by comparing lenders for you. They assist with document preparation, explain terms, and recommend suitable products. For complex cases, such as self-employed applicants or portfolio buyers, an adviser can improve your approval chances and save time.
Common reasons mortgage applications get declined
Mortgage applications are often declined due to low credit scores, missed payments, insufficient income, high debt, or unstable employment. Incomplete or missing documents also lead to rejections.
Should you apply directly or use a mortgage adviser?
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