Mortgage Application Process UK

An independent specialist mortgage broker such as John Charcol can review your situation, guide you through the entire mortgage process and get you ready to start your journey to homeownership. Contacting a mortgage broker early on is the simplest way to ensure a straightforward experience and avoid getting bogged down in the logistics. We’ll explain everything at each step.

We can help you in a number of ways.

We can:

• Find the right mortgage deal - we have access to the whole mortgage market, so can help you find a deal that’s tailored to your needs. We can help you navigate the various fees, rates, and terms available and provide advice on the most suitable option
• Explain all the fees and costs - we can explain all the fees associated with taking out a mortgage, such as arrangement fees and survey costs, and help you work out how much it's going to cost overall - so there won't be any unexpected surprises down the line
• Improve your chances of getting approved - at John Charcol, we work with lenders who specialise in helping people with bad credit histories and complex circumstances. We know which lenders are likely to accept your mortgage application and can help you secure a loan even if your situation isn't ideal
• Help you arrange mortgage protection, insurance and more – we have an in-house protection team who can organise bespoke protection cover to suit your circumstances. We can also find you suitable buildings and contents insurance, as well as organise removals, surveys and more

Good credit is essential for securing a mortgage loan with favourable rates, so it’s important to check your credit report beforehand. Look for any inaccuracies that may be dragging down your score and dispute them if necessary. Make sure you check all 3 major credit bureaus – Experian, Equifax, and TransUnion – as they may have different information.

If your credit score isn't where you want it to be, you may need to take some time to improve it. You can do this in various ways.

• Register on the electoral roll - this is a crucial step, as lenders use this to prove your identity and check that you live at the address stated on your application
• Pay off existing debts - high levels of personal debt can be detrimental to your credit score, so work towards paying down any outstanding balances before applying for a mortgage
• Clear any defaults - if you have any defaults or CCJs (County Court Judgments) listed on your credit report, it's important you try to settle these as soon as possible
• Limit applications - every time you apply for a new loan, credit card, or other financial product, your credit score can be negatively affected. Try to limit applications ahead of making a mortgage application
• Keep up with bill payments - paying bills and loan instalments on time is essential if you want to maintain a good credit score. Keep up with payments and set reminders or direct debits to help you stay on track and avoid potentially damaging late payments

If you have your eye on a property now but your credit score isn't where it needs to be, don't worry. Bad credit lenders can still offer mortgages, so you may be able to apply for a loan even if your score isn't perfect. Note that adverse credit mortgages tend to come with higher rates and deposit requirements.

Make sure you go through an independent, specialist mortgage broker such as John Charcol, as we have access to the whole market of mortgage products. This means we can help you find a lender that will be more likely to accept your application.

Once you’ve reviewed and improved your credit score, it’s time to get your finances in order.

• Ensure you have a steady income - lenders will want to see that you have a long term source of income, so make sure this is up-to-date and consistent. Typically, mortgage lenders will want to see at least 3 months’ worth of payslips. If you're self-employed, you will likely be asked to provide different evidence of your income, such as 1 – 2 years’ worth of accounts and tax returns
• Cut back on spending - if you’re used to a certain lifestyle, it may be beneficial to scale back for the time being. Lenders will consider your outgoings when assessing your mortgage affordability, so it's best not to have too many regular expenses that could affect your chances of getting approved. This includes regular, moderate expenses such as subscription services, as well as larger ongoing costs such as car payments.Gambling excessively, although legal, is also frowned upon by lenders and can affect your chances of getting a mortgage
• Make sure you have enough in deposit and some set aside for additional costs – You’ll need typically need at least 5% - 10% in deposit for a mortgage, so consider what you have saved when looking at properties and figuring out your budget. There will likely also be additional costs to consider when you move home, such as Stamp Duty, lender’s arrangement fees, solicitor costs, mortgage broker fees and moving costs

You can use this handy mortgage borrowing calculatorto help you work out how much you can borrow and this mortgage deposit calculator to see the amount you need to save for the kind of property you have in mind. You can also use our moving home best buys for an idea of the kinds of rates on the market and finally use this mortgage repayments calculator to see what your monthly payments could look like.

Once your credit score and finances are in order, it's time to start gathering the documents needed for your mortgage application. These often include:

• Proof of identity – passport or driver's license
• Proof of address – utility bill or bank statement
• Proof of income – payslips and P60s/tax returns/business accounts
• Bank statements – over the past 3 - 6 months

Depending on your circumstances, some lenders may require additional documents such as share certificates, proof of gift funds, or evidence of other income.

Whether you decide to proceed with a mortgage broker or go direct, it's important that you start the process early and get everything in order before applying for a loan. That way, you can be sure of getting the best mortgage deal available and have a smooth journey towards homeownership.