How to prepare for a mortgage application
Key Takeaways
- Preparing your finances and paperwork early can make the mortgage application process smoother, with an Agreement in Principle usually the first step.
- Being registered on the electoral roll, paying commitments on time and using credit responsibly can help strengthen your mortgage eligibility and demonstrate good financial management.
- Your deposit can come from savings or a gifted deposit, while regular monthly saving can help demonstrate financial discipline and build your funds towards a purchase.
- A full mortgage application typically requires documents including proof of identity and address, your P60, recent payslips and bank statements, plus evidence of your deposit and its source.
- Before applying and completing your mortgage, avoid taking on new credit commitments, and make sure buildings insurance is in place from the first day of homeownership as required by the mortgage offer.
Getting ready to apply for a mortgage? David Lauder, Mortgage Adviser at ESPC Mortgages, shares everything you need to know about preparing for a mortgage application.
Preparing to apply for a mortgage can feel daunting, but with the right planning, the process can be much smoother. Getting your finances and paperwork in order early can make all the difference, while working with an experienced Mortgage Adviser can guide you through each stage with confidence.
How to improve your chances of getting a mortgage
The first step is usually securing an agreement in principle, and there are a few simple ways to strengthen your eligibility. Make sure you’re registered on the electoral roll, keep your correspondence registered to your current address, and pay regular commitments on time. Using a credit card responsibly and repaying the balance in full each month can also help build your credit score and demonstrate that you can manage credit well.
Your mortgage deposit can come from your own savings or from a gift from parents, family or friends (although this must be declared as such and there are processes to follow if your deposit has been gifted, which your Mortgage Adviser can discuss with you). If you’re building your own deposit, a useful habit is to set up a monthly standing order into a dedicated savings account as soon as your salary is paid. Doing this in advance of your purchase can help demonstrate financial discipline.
What documents do you need for a mortgage application?
Once you have an agreement in principle and your offer has been accepted on a property, you can submit your full mortgage application.
You’ll typically need several documents to support your application. These include proof of identity, such as a valid passport; proof of address dated within the last three months, such as a utility bill; your most recent P60; your last three months’ payslips; your last three months’ bank statements for the account your salary is paid into; and evidence of your deposit, including where the funds have come from.
What happens after you apply for a mortgage?
Once you’ve chosen a mortgage, your full application can be submitted to the lender. This stage can take up to three weeks to complete. The lender will carry out checks, review your supporting documents and confirm the surveyor’s valuation of the property you plan to buy.
When your mortgage has been approved and the offer has been issued, both you and your solicitor will receive copies. Your solicitor can then conclude the missives once the legal checks are complete, meaning you and the seller are legally committed to transferring ownership of the property.
What happens before your date of entry?
A few days before your date of entry, your solicitor will ask you to transfer your deposit. They’ll also receive the mortgage funds from the lender, with the full amount being paid to the selling solicitor on the agreed purchase date.
Your mortgage lender will usually write to you within 10 to 14 days of entry to confirm the amount and date of your first mortgage payment. Remember, the first month’s payment will usually be higher than your regular monthly amount, based on your date of entry.
Important things to remember when applying for a mortgage
Having buildings insurance in place from the first day of homeownership is a condition of your mortgage offer.
It’s best to avoid searching for insurance quotes online until your mortgage has been offered, as this may affect your credit rating.
It’s also not recommended to apply for new loans, finance agreements or credit cards shortly before applying for your mortgage, or before your mortgage completes. New credit commitments can affect your credit rating and may reduce your eligibility.
Get mortgage advice today
ESPC Mortgages is a team of independent mortgage advisers based in Edinburgh. With many years of experience, they are well-placed to help you purchase your first property. Get in touch with the team on 0131 253 2920 or fsenquiries@espc.com.
The initial consultation with an ESPC Mortgages adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £395 (£345 for first-time buyers). The Financial Conduct Authority does not regulate Buy to Let Mortgages. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.
The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.
ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.