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It can seem chicken and egg: you can’t buy a house without a mortgage, but you can’t get a mortgage until you're ready to buy a house. So when should you apply for a mortgage? We explain all
If you’re buying a house you’ll want to know when to apply for a mortgage. By starting the mortgage process as early as possible you’ll know your budget and be in a stronger position with sellers – so you’ll reduce the risk of losing your dream property. Read on for what to do and when.
When it comes to when to apply for a mortgage, it’s advisable to start the process before you even start seriously looking for somewhere to buy.
There are a number of reasons why it’s a good idea to begin the mortgage process before you start viewing properties or putting in an offer:
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
To maximise your chances of your mortgage being accepted and your house purchase being successful there is important work to do in the months before you apply for a mortgage.
In the months running up to when to apply for a mortgage, you’ll want to make sure your finances are in good order. So make sure your credit rating is as good as it can be to make a successful mortgage application. And check if you can give your credit rating a boost, read our guide 11 tips to improve your credit score for a mortgage.
Whether you’re looking to buy your first home or you’re moving house, you’ll want to know what your budget is before you start house-hunting.
You’ll usually need a deposit of at least 5% to get a mortgage, although it is possible to get a mortgage with a smaller or even no deposit. However, the bigger your deposit, the more deals you’ll typically get access to and often better rates too. So as a starting point, you need to find out how much you can afford.
Using a how much can I borrow mortgage calculator will give you an indication of how much you’re likely to be able to borrow and our mortgage cost calculator will give you an idea of the monthly cost of your mortgage.
But for expert advice tailored to your personal circumstances, it’s advisable to speak to a fee-free mortgage broker. They’ll explain your mortgage options and how much you’re likely to be able to borrow on a mortgage, based on your individual circumstances.
You should also consider what type of mortgage you’d like to take out. Would you prefer a fixed deal so you have certainty on your repayment amounts or would you prefer a tracker deal, hoping that it will be cheaper overall?
Considering your options in advance means you’ll be able to make a faster decision when it is time to apply for a mortgage. An expert mortgage broker will explain the pros and cons of each mortgage type to help you make the right decision for you.
If you’re buying a house, you may want to consider using a government scheme like shared ownership or the First Homes scheme. Or you may want to consider the privately-run Deposit Unlock scheme. This helps first time buyers and home movers buy a new build home from a participating house builder with a mortgage from a participating lender. So do your research ASAP.
When you apply for a mortgage you’ll need to provide documents including proof of your earnings. If you’re employed, you’ll usually need to show your payslips from the last three months and your P60, while if you’re self-employed, you’ll usually need your last two years’ SA302s and your tax year overviews for those years too.
Plus you’ll need to show bank statements and proof of ID and your current address. So make sure you have these to hand to avoid delays when you need to apply for a mortgage.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Your first step should be to research what mortgage deals are available to you and how much these will cost.
Getting fee-free advice from a mortgage broker is the easiest way to find the right mortgage for you. When you’re looking at deals, while the rate is important, bear in mind the mortgage fees and costs can make a significant difference to the overall cost. Another benefit of using a mortgage broker is they’ll do all the calculations to help you decide which is the right mortgage for you.
While you can’t make a full mortgage application until you’ve had an offer accepted on a property, you can get a “mortgage in principle” (sometimes called an agreement in principle) and it’s advisable to do this before you start house-hunting.
A mortgage in principle is a statement from a lender on how much they would lend you ‘in principle’ based on information you provide about your income and outgoings. These can be helpful to show to estate agents when you’re house-hunting.
Once you’ve had your offer on a house accepted, now is when to apply for a mortgage. This will involve supplying evidence including of your income, identity and current address.
Your lender will perform a full credit check on you to ensure you they’re satisfied by your credit history and they’ll perform affordability checks too.
The lender will also require a mortgage valuation of the property you are about to buy and it will instruct a surveyor to do the valuation on its behalf. The cost of the valuation depends upon the value of the house being surveyed; some lenders will insist you pay for the valuation while others will offer a free mortgage valuation. Read more in our guide Mortgage valuations explained.
Note that the mortgage valuation is for the benefit of the lender and is not a survey covering the condition of the property you are about to buy. See What sort of survey should I have?
Providing the lender is happy with your mortgage application, it will make you a formal mortgage offer. If you’re buying a house, mortgage offers are usually valid for 6 months and if you’re remortgaging, mortgage offers are usually valid for 3 months. This varies by lender though so always check. You’ll usually get your mortgage offer within 2-4 weeks.
If you accept the mortgage offer, your conveyancer will contact your lender and ask them to release the mortgage funds in time for completion. The lender will send the money to your conveyancer, who’ll then send it on to the seller’s conveyancer. Once that has happened, you can officially complete the property purchase and become the legal owner of your new home.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
There are a number of factors that may delay a mortgage application, including if there’s an issue with the mortgage valuation, if additional information is needed, or if your application is particularly complicated. Find out more information in our guide How long does it take to get a mortgage.
Yes. Some buyers may get a mortgage agreement in principle and then later find that their mortgage application has been declined.
Reasons this may happen include if a deeper credit search reveals something concerning, or if you fail to meet the eligibility criteria set by the mortgage underwriters. While this can be incredibly frustrating, it’s important to remain calm and find out why you were rejected.
If this happens then ask the lender for an explanation of why you were rejected. And it’s a good idea to get advice from a mortgage broker. Read more about what to do if your mortgage application is declined.
Yes. A lender gets a mortgage valuation carried out to make sure the property is adequate security for the loan. In some cases, the surveyor will ‘down value’ the property; this means the surveyor will value the property at a lower price than the buyer has agreed to buy.
If this happens, the lender may say it will lend you a lower amount. Alternatively, with down valuations your lender may decide the risk is too high and withdraw the mortgage. This means you’ll lose the house unless your mortgage broker can find another lender that will be happy to support your purchase. For more advice, see our guide to down valuations and what you should do.
When you apply for a mortgage there are some pitfalls to avoid including:
It’s a good idea to start shopping around for a new deal up to 6 months before your current deal is due to end.
Lenders’ offers usually last 3-6 months, so while you may not get the full choice if you start looking 6 months in advance, you can secure a rate and then keep looking in case a better deal comes up.
There may be circumstances where you want to remortgage within your current deal, such as if you want to remortgage to free up cash for a major expense, such as a home improvement project you want to fund or you want to pay for measures to improve your home’s energy efficiency.
However, if you do this, you may have fees to pay such as an early repayment charge, and these can be substantial so make sure you check the details carefully first. For more information read our guide on How to remortgage.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
You can’t make a full mortgage application until you’ve had an offer accepted on a house but you can get a ‘mortgage in principle’ before finding a house, which will indicate how much you can borrow on a mortgage.
Execution-only mortgages are when someone takes out a mortgage without any help from a financial advisor or a mortgage broker. As they’re making the decision without financial advice, they’ll usually have to agree in writing that they’re aware of this and any potential consequences if the mortgage turns out to be unsuitable. For more information, read our guide on Do I need a mortgage broker?
A ‘mortgage in principle’, also known as an ‘agreement in principle’ or ‘decision in principle’, is a statement on what it would lend you ‘in principle’ based on some basic information you provide. Find out more in our guide When do I need a mortgage agreement in principle?
If you’re buying a house, you can only make a full mortgage application after you’ve had an offer accepted on a house. However, if you’re remortgaging, you can lock in a rate up to 6 months in advance.
To get a mortgage offer you’ll need to complete a full mortgage application first. Find out more in our guide How long does it take to get a mortgage?
If your request for a mortgage in principle is refused, it could be a sign that the lender doesn’t think you can afford the loan. You should find out why you were rejected and try to resolve the issue before you apply again; it may be due to a poor credit rating. In this circumstance it’s even more important to seek expert advice because a mortgage broker will be able to advise you on what to do next. See our guide on Mortgages for Bad Credit to understand your options.
Life insurance isn’t mandatory for a mortgage but it can give financial security to your loved ones if you die while still having a mortgage to pay off. Find our more about life insurance options when taking out a mortgage.
Getting a mortgage on an auction property is possible but you’ll need to act quickly. You’ll only have 28 days to get the money to complete your purchase if you’re buying a house at a traditional auction. You’ll have more time if you’re buying via the ‘modern method of auction’. If there is a delay in getting your mortgage, you can take out a bridging loan to ‘bridge the gap’ in funding. A bridging loan can also help you buy a house at auction that isn’t quite habitable so deemed un-mortgageable.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
HomeOwners Alliance Ltd is an Introducer Appointed Representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
