Top tips on how to get ready to apply for a mortgage

The UK mortgage market is the largest in Europe with more than 11 million mortgages currently in place in the UK. For anyone looking to get onto the housing ladder it’s more than likely that a mortgage will be required to do it. If that’s your goal then it’s essential that you’re prepared to apply.

Top tips for getting a mortgage

Work out how much deposit you’ll have

The larger your deposit, the cheaper your mortgage will be. You’ll need 10 – 20% of the purchase price to borrow from a mortgage lender. If you’ve got at least a 5% deposit then you may be eligible for the government’s Help to Buy scheme, which tops up what you have with an additional 20% equity loan. If you’re being gifted some or all of the deposit, you’ll need to provide a signed letter to the lender from the person helping you stating that the money is a gift and will not give them a stake in the property.

Make sure you’re aware of all the costs involved in buying

These include:

  • Stamp duty. If you’re a first time buyer then you don’t have to pay stamp duty on the first £300,000 of any home that costs up to £500,000.
  • Legal costs. You’ll need either a solicitor or a conveyancer to manage the process of buying – conveyancers are cheaper but a transaction with any complexity will require a solicitor.
  • The type of survey you’ll need will depend on the property.
  • Moving costs. Don’t underestimate how much extra you’ll need to actually get yourself and your possessions into the property on moving day.

Start working on your credit score

Every lender will check your credit file to see whether you are a good credit risk in terms of borrowing. If your score is low then you might want to take some time to improve it before making any mortgage applications. There are many ways to do this, for example by repaying some existing debt, making sure all your personal details are correct, meeting all your current repayment obligations and disconnecting your file from previous partners or housemates.

Get your documents together

The process of applying for a mortgage requires a number of key documents, including proof of address for three years, SA302/Tax Calculations or payslips – three months worth – and all your current credit agreement details.

Obtaining an Agreement in Principle

This is the part of the process where a lender will decide what they can lend to you based on factors such as your income, age and credit score. Affordability will be crucial here – lenders today are under an obligation not to lend to borrowers who can’t afford to repay – so you may need to adjust outgoings or cut back for a while before you apply - to prove you can meet repayments.

The process of applying for a mortgage can be complicated but will be worth the effort on the day that you’re able to collect the keys to your brand new home.

Get in touch with the Clarke Gammon Wellers team today to see how we could make your property purchase and mortgage application smoother and hassle-free.