A step-by-step guide to the UK mortgage process

What is a mortgage and how does it work?

A mortgage is a loan secured against your property. It allows you to purchase a home without paying the full price upfront. You'll repay the borrowed amount plus interest over an agreed term, typically 25 to 35 years.

When should I apply for a mortgage?

It’s a good idea to apply for a mortgage before you start house hunting. Getting a Mortgage in Principle (MIP) means you know how much you can afford before you start looking, preventing you from viewing properties outside your budget. It can also help to speed up the buying process when you find the right property. Applying for a mortgage in advance reduces the risk that you will lose the house you've put an offer on or reserved due to delays in your application.

What do I need to apply for a mortgage?

You should collect some essential house purchase documents as part of your application. A mortgage provider will typically want to see:

• Passport or driving licence

• Payslips from the last 3 months

• Bank statements for the last 3-6 months

• Statements from your savings accounts

• P60 from your employer

• Proof of any benefits

• Utility bills

 

Collecting these in advance can prevent delays later.

How long does applying for a mortgage take?

Mortgage application times can vary from a few days to several weeks, but it typically takes around 2 weeks.

 

Several factors influence the mortgage process timeline, including how quickly you provide required documents, your lender and whether any issues arise during valuation or underwriting.

How mortgage repayments work

Your monthly mortgage repayments typically include two components:

• Capital borrowed

• Interest charged by the lender

 

With a repayment mortgage, each payment gradually reduces your outstanding balance whilst covering interest costs. In the early years, most of your payments go towards interest, but over time, more go towards reducing the capital.

The mortgage process explained

The mortgage process involves several key stages.

1. Assess your finances and collect necessary documents

Before applying for a mortgage, review your financial situation to understand how much you can realistically afford to borrow and repay. Calculate your monthly income and expenses and consider how mortgage payments will fit into your budget. Check your savings to determine your deposit amount, as larger deposits typically secure better interest rates. Collect the necessary documents, including payslips, bank statements, proof of funds, utility bills and proof of ID, ready for your application.

2. Check your credit score

Lenders will assess your credit history to make sure you’re a reliable borrower and to check any outstanding credit you currently have. To avoid unnecessary delays, it’s a good idea to review your credit reports. You can contact one of the three main credit reference agencies: Experian, CallCredit and Equifax – and order your reports. It's important to remember that you can still get a mortgage with bad credit.

 

If there are any errors in your reports, then you can correct them before applying for a mortgage. Find out more about common credit score misconceptions in our guide.

3. Get a Mortgage in Principle (MIP)

A Mortgage in Principle (MIP) is a statement provided by a mortgage lender or broker. It gives you an idea of how much money you could potentially borrow for your home purchase. They are typically valid for 30 to 90 days and can be helpful in the mortgage process. Having an MIP also shows a seller you're serious. They may even accept a lower offer from a buyer with a mortgage already lined up rather than risk accepting a higher offer from someone who hasn't yet applied.

4. Choose the right mortgage

There are many types of mortgages to choose from:

• Fixed-rate mortgages lock in your interest rate for a set period, typically 2 to 5 years, providing certainty about your monthly payments regardless of market changes

• Variable-rate mortgages fluctuate with the lender's standard variable rate, meaning payments can increase or decrease over time

• Discount mortgages offer a reduction on the lender's standard variable rate for an introductory period

• Tracker-rate mortgages follow the Bank of England base rate plus a set percentage

5. Submit your mortgage application

Once you've found your ideal property and had your offer accepted, it's time to submit your mortgage application. Applying for a mortgage requires accuracy, and any inconsistencies or missing information can delay or jeopardise your application. Your lender or broker will guide you through completing the application form.

6. Mortgage valuation and underwriting

Your lender will arrange a property valuation to confirm your new home is worth the price you're paying. A mortgage underwriter will also evaluate whether you can afford the monthly repayments. They assess your property’s value relative to the purchase price. They will access your income, expenses, credit report, property details and conduct fraud checks.

7. Receive your mortgage offer

After successful underwriting, you'll receive a formal mortgage offer outlining the exact terms and conditions of your loan. This legally binding document confirms the amount the lender will provide, the interest rate, the repayment term, and any special conditions you must meet before completion. Review this carefully.

8. Completion and mortgage repayments begin

Completion day is when the mortgage process concludes, and you officially become a homeowner. Your lender transfers the mortgage funds to your solicitor, who combines this with your deposit and pays the seller. You can then collect your keys and move into your new home. Your first mortgage repayment is typically due one month after completion, though some lenders allow you to delay the first payment slightly.

How much can you borrow?

When borrowing for a mortgage, lenders consider the following to determine affordability:

• Your credit score reflects your reliability as a borrower and significantly influences how much you can borrow and the interest rate offered

• Income is assessed to ensure you can comfortably afford monthly repayments, typically at a ratio of 4 to 4.5 times your annual salary, though this varies between lenders

• Outgoings such as existing debts, credit card balances, and regular expenses are examined

• The size of your deposit matters considerably, as larger deposits reduce the lender's risk and often secure better rates

• Employment status affects lending decisions, with permanent employees typically finding the mortgage process smoother than contractors or the self-employed

• Other debts, such as personal loans, car finance, or student loans, reduce your borrowing capacity, as lenders factor them into affordability calculations

Mortgage fees and costs to consider

You should be aware of the fees involved in the mortgage process and the other costs to consider when buying a new home.

Arrangement fees and booking fees

Lenders charge arrangement fees for setting up your mortgage. Some lenders allow you to add this fee to your mortgage balance, though you'll pay interest on it. Booking fees, also called reservation fees, secure a particular mortgage rate whilst your application is being processed.

Valuation and survey costs

Your lender will arrange a basic valuation to confirm the property's worth. This protects the lender but doesn't provide detailed information about the property's condition. Consider arranging your own house survey for a thorough inspection.

Early repayment charges (ERCs)

Many mortgages include early repayment charges (ERCs) if you pay off significant portions of your loan or switch lenders during the initial fixed or discounted period. These charges typically range from 1% to 5% of the outstanding mortgage balance. ERCs protect lenders from losing expected interest income when offering competitive rates during introductory periods.

Ongoing mortgage costs

Beyond your monthly repayment, you can consider life insurance to protect your family from mortgage debt if you die. Some lenders require life insurance as a lending condition.

Mortgages for first time buyers

Understanding mortgages as a first time buyer helps you navigate the mortgage process. A first time buyer mortgage is designed for those new to the housing market. They may include offers such as lower deposits to incentivise first time buyers, with some lenders offering 95% mortgages with a 5% deposit. First time buyers also benefit from government schemes, like First Homes, which can offer a discount of at least 30% off a property’s market value.

What can affect your mortgage application?

Several factors influence whether you succeed in applying for a mortgage and what interest rates you're offered.

Credit history and financial behaviour

Lenders will assess your credit history during the mortgage process. Late payments, County Court Judgements (CCJs) or bankruptcy significantly impact your application, potentially leading to rejection or higher interest rates. Lenders examine your credit report to evaluate how reliably you've managed previous debts and financial commitments.

 

They also review your recent financial behaviour through bank statements. They look for responsible money management, regular income and sustainable spending patterns.

Employment type and income stability

Lenders prefer borrowers with stable, permanent employment as this indicates reliable income for repayments. Self-employed applicants face additional scrutiny and must provide at least two to three years of accounts demonstrating consistent or growing income. When applying for a mortgage, provide comprehensive evidence of income stability, including contracts, tax returns and accountant-certified accounts if self-employed.

Property type and valuation issues

The type of property you're purchasing – a new build or an older home – significantly affects your mortgage application. Lenders assess whether it provides adequate security for their loan. If the lender's valuation comes in below the agreed purchase price, they may reduce the mortgage offer, requiring you to find additional funds or renegotiate. New build mortgages typically avoid these issues as modern properties meet current building regulations and provide straightforward security for lenders.

What happens if your mortgage application is declined?

Having your mortgage application declined can be disappointing, but it's not the end of your home buying journey.

Common reasons applications are rejected

Applications are commonly rejected during the mortgage process due to:

• Poor credit history, including missed payments, defaults or CCJs that suggest financial unreliability
• Income that doesn't support the requested borrowing amount, or if the debt-to-income ratio is too high
• Inconsistencies between your application and supporting documents can raise fraud concerns and lead to automatic rejection
• Recent job changes, especially during probationary periods, can result in declined applications as lenders question income stability
• Property-related issues such as unfavourable valuations, non-standard construction or short leases on flats can cause lenders to decline

What steps to take next

After a declined application, request detailed feedback from the lender explaining exactly why they rejected your mortgage request. This information guides your improvement efforts and helps you understand what to address before reapplying.

When to reapply or seek advice

Wait at least 3 to 6 months before reapplying for a mortgage, using the time to improve your financial situation and credit score. Immediate reapplication rarely succeeds unless the initial decline was due to easily corrected errors. Multiple declined applications can damage your credit score and make future applications harder, so ensure you've addressed the reasons for the rejections before trying again.

Why should you consider a new build?

There are many benefits of buying a new-build home. Our new build homes across the UK are energy efficient, stylish and suitable for all lifestyles. These include 2 bedroom and 5 bedroom homes with modern layouts in excellent locations. You may even be able to add your own personal flair and choose the finishing touches, so your new house really feels like a home.

 

Financial incentives from developers can make purchasing a new build a great decision, while new build mortgages can offer both first time and existing buyers lower deposit options. Barratt Homes’ unique homebuying offers are designed to help you move. We offer a range of schemes to suit your circumstances, like Deposit Unlock, Kickstart and Part Exchange.

 

Our Sales Advisers are experts in the moving process and can assist with any aspect of your home buying journey. Contact them today to find out more.