How do I arrange a mortgage?

A simple guide to arranging a mortgage for your first home

If you have never arranged a mortgage before, it can be difficult to know what happens first or what you will be asked to provide.

In simple terms, you will usually begin by exploring your mortgage options and getting an indication of how much you could borrow. Once you have found your home, you can then make your full mortgage application.

The process may vary depending on your lender and circumstances, but these are the main stages you can expect.

01. Decide how you would like to arrange your mortgage

There are different ways to arrange a mortgage.

You can approach a bank or building society directly, or you can speak to a mortgage adviser or broker who can help you explore the options available to you.

An adviser will look at your individual circumstances and can explain the different mortgage products, interest rates, terms and fees involved. Some advisers can search across a wide range of lenders, while others may only have access to certain products.

If you decide to use an adviser, make sure they are appropriately regulated and understand any fees that may apply.

What is a mortgage adviser?

A mortgage adviser specialises in helping people find and arrange mortgages.

They can help you understand:

  • the amount you may be able to borrow
  • different types of mortgage
  • mortgage rates and terms
  • the deposit you will need
  • the fees associated with a mortgage
  • which products may suit your individual circumstances.

They can also help you prepare and submit your mortgage application.

02. Get an Agreement in Principle

Before you have chosen your home, you may decide to get an Agreement in Principle.

You may also hear this called a Mortgage in Principle or Decision in Principle.

It gives you an indication of how much a lender may be prepared to lend based on some initial information about your finances.

It is not a formal mortgage offer, but it can give you a clearer idea of your potential property budget while you are looking for your first home.

To obtain one, you will usually be asked for information about your:

  • income
  • regular outgoings
  • existing financial commitments
  • deposit
  • address history.

Depending on the lender, a credit check may also be carried out.

03. Prepare your paperwork

When you make your full mortgage application, your lender will need evidence to confirm the information you have provided.

Getting your documents together beforehand can help make the application process feel more straightforward.

You may be asked for:

Proof of identity

Such as a passport or driving licence.

Proof of income

This could include recent payslips and your latest P60. If you are self-employed, different evidence of income may be required.

Bank statements

Lenders may ask to see recent statements to understand your income and regular spending.

Proof of your deposit

For example, savings statements showing where your deposit is coming from. If some or all of your deposit has been gifted, additional information may be required.

Proof of address

You may also need to provide evidence of your current address and address history.

 

Every lender has its own requirements, so your lender or mortgage adviser will confirm exactly what you need to provide.

04. Make your full mortgage application

Once you have found the home you would like to buy, you can move from an Agreement in Principle to a full mortgage application.

Your lender will now look at your circumstances in greater detail.

They will consider information such as your income, expenditure, deposit and credit history to make sure the mortgage is affordable for you.

If you are using a mortgage adviser, they can usually guide you through the application and submit the necessary information to the lender on your behalf.

05. Your lender will value the property

As part of your mortgage application, your lender will usually arrange a mortgage valuation.

This is carried out for the lender to confirm that the property provides suitable security for the amount they are lending.

A mortgage valuation is for the lender's purposes and is different from a more detailed survey you may choose to arrange yourself.

Your lender or mortgage adviser can explain what valuation will be required and whether any fees apply.

06. Receive your mortgage offer

If your application is approved and the lender is satisfied with its checks and valuation, you will receive a formal mortgage offer.

Take the time to read the offer carefully and make sure you understand:

  • the amount you are borrowing
  • your mortgage term
  • your interest rate
  • your expected monthly repayments
  • any fees
  • any early repayment charges or other conditions.

Your mortgage adviser or lender can explain anything you are unsure about before you proceed.

Keep an eye on the expiry date

Mortgage offers are normally valid for a set period.

This can be particularly important when buying a newly built home, as your home may still be under construction when your mortgage offer is issued.

Check the expiry date of your offer and keep in contact with your lender or mortgage adviser if your expected completion date changes. Depending on the lender and your circumstances, an extension or updated application may sometimes be needed.

Your mortgage, step by step

For a simple overview, arranging your first mortgage usually looks like this:

01.

Explore your mortgage options

02.

Get an Agreement in Principle

03.

Prepare your documents

04.

Find your home

05.

Submit your full application

06.

Lender valuation and checks

07.

Receive your mortgage offer

 

Taking each stage one at a time can make arranging your first mortgage feel much more manageable.