Getting a mortgage. The how-to’s and what-ifs

Getting a mortgage means you’re one step closer to buying your dream home. When applying, it’s important to be patient, organised, and prepared, but what exactly happens when you apply for a mortgage?

What’s involved in getting a mortgage?

Applying for a mortgage means borrowing money from a lender to buy a house, and it’s something most people have to do. A lender will review your finances, check your affordability, and assess your credit score. They will also consider your deposit, as well as where it’s come from. 

It’s vital to understand the interest rates and conditions of different mortgages and how they compare.

1. Paperwork and documentation

When applying, you’ll be asked to provide documents that verify your income, assets, and creditworthiness. These are some of the most common: 

• Proof of income

• Employment verification

• Bank statements

• Credit report (though lenders may get this themselves)

• Debt information

• Identification 

Any specific requirements will depend on the lender and the type of mortgage you’re applying for. 

2. Affordability

Lenders use mortgage affordability assessments to determine how much money they are willing to lend to you. This is based on your financial situation and considers your income, expenses, and credit report. Key factors they will look at include:

• Income

• Expenses

• Credit history

• Employment history

• Debt-to-income ratio

Using these and other details, lenders will work out how much you can afford and what your monthly repayments would look like. They will also take your deposit into account. Assessments can vary from lender to lender, so make sure you know what’s required when applying.

3. Deposits

Deposits are a crucial part of home buying, and the amount needed varies based on the type of mortgage and the lender’s requirements. For first time buyers with a small deposit, lenders may offer a mortgage with a higher loan-to-value (LTV) ratio. 

Alternatively, some buyers may turn to a mortgage guarantor, who is someone who agrees to pay your mortgage if you cannot. You may even have family who are willing to help you with a gifted deposit, and it’s no myth that the bank of mum and dad are the UK’s 9th biggest lender.

4. Who can get a mortgage?

Anyone who meets the lender’s eligibility criteria and can afford the monthly repayments can get a mortgage. Different types of mortgages may suit different people, depending on their specific needs. Adding someone to a mortgage (such as a spouse or partner) is also an option, but it’s important to consider the implications that come with joint ownership.

Consulting a mortgage adviser is always recommended when starting the home buying process.

Protection and insurance for mortgages

While there aren’t many obligatory insurances you need to get a mortgage, there are several that we highly recommend. Protecting yourself, your family, and your assets is vital when you own a home. When applying, your lender will ask that you have buildings insurance, as this covers the cost of your home should anything happen. 

We also recommend getting mortgage payment protection insurance, as well as life insurance. 

Download the Mortgage Advice Bureau app

Our app is a digital mortgage coach designed to help you save up, plan, and track your home buying journey – whether you’re buying your first home, or just fancy a move.

We’ll guide you through step by step to ensure you always know what’s coming up next.