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How to apply for a mortgage

It can feel overwhelming to apply for a mortgage, but we’re here to guide you through every step of the way – from applying for a Mortgage in Principle, all the way through to the money landing in the seller’s account.

Hampstead houses

Want to apply for a mortgage, but not sure where to start? Though the process can seem daunting or intimidating (particularly if you’re a first-time-buyer), here at Strike we firmly believe that it doesn’t need to be that confusing if you can get to grips with the basics. So here’s a rundown of how to apply for a mortgage.

An outline at a glance

  • Prepare your supporting information: To apply for a mortgage you’ll need some information. If you have it all organised and ready to go, the process should be quicker and easier.

  • Get a Mortgage in Principle: A Mortgage in Principle (MIP) , also known as an Agreement in Principle (AIP) or Decision in Principle (DIP), lets you know how much you can borrow based on your income, desired property value, deposit amount and mortgage terms. 

  • Find your house: Your MIP is your golden ticket onto the property ladder. Now you’re armed with your MIP certificate, you can start your search for the property of your dreams, most people start their search online.

  • Choose a mortgage deal: You may have a deal you’re happy with from when you applied for your MIP,  and your lender or broker should be able to help you turn this into an actual mortgage. OR you might want to do more research and find a new deal. This could be when you choose to employ the help of a broker.

  • Apply for your mortgage: Contact your broker or chosen lender  and complete their mortgage application form.

Now that you know the outline, let’s go into a little more detail on how to apply for a mortgage, so you can exit this page with all your questions answered and that weight on your shoulders a little lighter!

How do I apply for a mortgage?

There are a few different places you can apply for a mortgage, but no matter where you go you’ll have to provide the same things — mainly proof of deposit and income. You’ll normally have to show bank statements, payslips, and proof that you have a deposit. (Things can be a little trickier if you’re self-employed or don’t have great credit, you can read more about it in our complete mortgage guide.)

So making sure you have enough savings, good credit, and proof of your income is a good place to start. If you want all of the details, we’ve broken down the paperwork involved here

First thing’s first, you’ll want to make sure you’re prepared to apply.

Preparing your application

When making an application, you’ll be asked to provide information about the following things:

  • Income

  • Employment

  • Outgoings

  • Address

Though an application to get a Mortgage in Principle is a very quick and easy process, you’ll still need the above information. Then when it comes to actually applying, there will be a more thorough search. It’s worth getting all your ducks in a row now, so that you’re not slowed down once you’ve found your dream house.

Getting a Mortgage in Principle

Getting a Mortgage in Principle

A Mortgage in Principle (MIP) - also known as Agreement in Principle (AIP) or Decision in Principle (DIP) - is a personalised assessment of how much money you can borrow towards a house. It tells agents that you’re serious about buying, and it gives you an indication of what your budget will be. It is a hypothetical agreement and an early indication of what you may be able to borrow, but doesn’t guarantee you a loan when it comes down to applying for real. It doesn’t take long to apply for a MIP (you can apply online with some basic information), it doesn’t affect your credit score, and usually lasts around 90 days, at which point you’ll have to apply again. If you then decide to apply for a mortgage, the lender will ask you to provide more information about your finances, employment and credit history.

Time to find your dream home.

You can’t get a mortgage without the house itself. You’ll have a rough idea of your budget, having applied for your MIP – but remember that you’re not guaranteed to get this amount of money, it’s just an indication. Found a property with your name on it? From a plot of land, to a palace to a potting shed, if you can’t afford it in full, you’ll need a mortgage!

Who gives me my mortgage?

Good question. You may know that mortgages are essentially a loan — a big loan but where do you go to get one? You can get a mortgage in a few different ways. You may go right to a lender — like a bank or a building society — or you may apply through a mortgage broker, who can argue your case and try to get you the best possible rate and maximise your borrowing potential. It’s worth noting  that you can use the terms “broker”, “adviser” and “financial services” interchangeably - here at Strike we refer to them as our financial services team.

Do I need a mortgage broker?

You don’t need a mortgage broker, many people apply directly to a lender. But a mortgage broker has the potential to save you a lot of time and energy. They can be particularly  helpful if you’re looking to borrow a very large amount of money, if your property is unique in some way, if you’ve had any credit issues in the past, or if your employment situation isn’t straightforward (like if you’re self-employed).  Even if your application is relatively straightforward, a broker or advisor can be a real asset, often saving you lots of money and time. Our financial services team at Strike offers a thorough brokerage service, having helped over 7,000 people find their perfect mortgage match. We always gives simple, straightforward mortgage advice — we pride ourselves in giving jargon-free advice when you need it most and we're always happy to answer any questions you might have about the process. We recognise that every application and every borrower is different, so we offer a totally personalised service. Many brokers charge a fee, so it’s important to look out for that — and other mortgage fees — when you’re making a decision.  But remember: the hope is that the broker will save you money by negotiating you the best deal possible, so they should pay for themselves.

When do I apply for my mortgage?

So you’ve found the property for you and you know you need to apply for a mortgage. You should already have your Mortgage in Principle, so you’ll know roughly what to expect when it comes to which mortgage deals are  open to you. But when do you actually apply for your mortgage? 

This should happen after your offer has been accepted on a property. Prior to this, you can have all your paperwork ready to go, so that the application runs as smoothly as possible.

Once you’ve had your offer accepted, you will apply for your mortgage. The process usually takes between 2-4 weeks from start to finish. 

The majority of borrowers are now using brokers to find their mortgage deal. In fact research from 2021 shows that 90% of people were using a brokerage service at that point, an increase from 77.5% the year before. Why? As mentioned earlier, brokers really do just make your life easier, and they should save you some cash too! So if we’re applying for a mortgage with a broker, as the majority of the UK now do,  what does the actual application process look like? 

  • Initial consultation: You will have an initial meeting or conversation with a mortgage broker to discuss your financial situation, goals, and preferences. The broker will gather information about your income, expenses, credit history, and any specific requirements you have regarding the mortgage.

  • Mortgage recommendation: Based on the information you provide, the broker will search the market to find suitable mortgage options for you. They will assess different lenders, interest rates, terms, and features to recommend the most appropriate mortgage products that align with your needs. Here at Strike we make sure that it’s a personalised service, so you can be sure that our mortgage recommendations are just right for you, but might not work for Bill and Bob down the street. 

  • Application preparation: Once you've selected a mortgage product, the broker will assist you in completing the necessary application paperwork. They will review the application with you to ensure accuracy and completeness.

  • Documentation submission: The broker will collect the required documents from you, such as proof of income, bank statements, identification documents, and any other paperwork requested by the lender. They will submit these documents on your behalf  to the chosen mortgage lender. It’s sort of the mortgage equivalent to your mum carrying your passport at the airport as a kid - you can sit back, have a milkshake and pick out your comic book. Let an expert take the reins!

  • Lender communication: The broker will act as an intermediary between you and the lender. They will handle all communications with the lender, ensuring that the application is progressing smoothly. The broker may provide additional information or clarification requested by the lender during the underwriting process.

  • Application processing: The lender you have selected (remember, your broker will probably  be looking at lots of different lenders before deciding on the best one for you) will review your application and assess your creditworthiness. They will conduct a valuation of the property you intend to purchase or remortgage in order to check it is worth the amount they are lending you. The lender may also perform additional checks, such as employment verification or credit checks.

  • Mortgage offer: If the lender is satisfied with the application, they will issue a mortgage offer detailing the terms and conditions of the loan. The broker will review the offer with you, explaining its terms, interest rate, repayment schedule, and any special conditions.

  • Mortgage acceptance: Once you are satisfied with the mortgage offer, you will sign the acceptance and return it to the lender. 

  • Conveyancing solicitor takes over: Your conveyancer takes over at this point, organising the legal side of the house purchase. The broker and conveyancer should work together, to ensure that the purchase runs smoothly. Your conveyancer will organise the exchange (of contracts between buyer and seller) and completion (when the funds are transferred from buyer to seller, and you officially own the property).

Once you’ve had your offer accepted, you will apply for your mortgage. The process usually takes between 2-4 weeks from start to finish. "

Could my loan be approved for a MIP and rejected for the mortgage?

Mortgages can be agreed in principle (AIP) and then declined for several reasons. Here are a few possible scenarios:

  • Inaccurate or Insufficient Information: During the MIP stage, the lender assesses your eligibility based on the information provided. If the information is inaccurate, incomplete, or inconsistent with the documents provided during the full application, the lender may decline the mortgage.

  • Affordability Assessment: A mortgage AIP is typically based on an initial assessment of your income, expenses, and financial commitments. However, during the full application, the lender conducts a more detailed affordability assessment. If the lender determines that you can't afford the mortgage repayments based on your financial situation, they may decline the application.

  • Credit Issues: Although a mortgage AIP involves a credit check, the full application may reveal additional credit issues or financial history that could impact the lender's decision. This could include recent missed payments, defaults, bankruptcy, or a high level of existing debt. Poor credit history can lead to a mortgage decline.

  • Changes in Circumstances: Between the AIP and the full application, there may be changes in your circumstances that affect the lender's decision. For example, if you've recently become unemployed, your income has decreased, or you've taken on additional financial commitments, the lender may reassess your ability to afford the mortgage and decline the application.

  • Property-related Issues: The mortgage application may be declined if issues arise during the property valuation or survey. If the valuation comes in significantly lower than the purchase price or if the survey identifies significant property defects or structural issues, the lender may decide not to proceed with the mortgage.

It's important to remember that an AIP is not a guaranteed mortgage offer. The full mortgage application involves a more comprehensive assessment, taking into account additional factors and documentation. It's crucial to provide accurate information, ensure your finances are in order, and maintain open communication with the lender throughout the application process to minimise the chances of a decline. If your application is declined, you can seek advice from the lender to understand the reasons behind the decision and explore alternative options. Remember, Strike is here for you every step of the way, no question is too small!

What about all this jargon?

We know — there’s a lot of jargon when it comes to mortgages. We don’t know why — and we always try to break it down to our customers in terms we actually use. But there's some good news. You’ll find that some of the jargon is surprisingly straightforward: 

  • Repayment mortgages: This is just a mortgage where you’re repaying the entire loan, both the interest and the capital. It’s the most common mortgage option. 

  • Interest-only mortgages: This is when you only pay the interest (see what they did there?). But at the end of the term, you haven’t actually paid off your property — so this is usually used more for investment than personal homes. 

  • Fixed rate mortgages: When the interest rate is fixed for a certain amount of time, so it won’t vary with the Bank of England base rate.  

  • Variable rate mortgages: Here, the rates will vary (usually with what’s called an SVR — or the standard variable rate of the bank). 

This certainly isn’t the only jargon you’ll find when it comes to mortgages — but, as you can see, it’s not as scary as it seems. And if you have any questions, we’re always here to help.  If you want to delve even deeper into mortgages, check out our complete mortgage guide. Or if you’re looking to learn more about getting on the property market for the first time, we’ve broken down everything you need to know in our first time buyer guide

It’s an exciting process, but it’s completely natural to need a little guidance — that’s what we’re here for.