In this brief guide, we are going to answer the question “what do I need to get a mortgage”

Getting a mortgage usually requires some level of planning if not you risk getting rejected for a mortgage. Some people will prefer to use a mortgage broker and hence relieve themselves of any stress or misstep that may come along the way.

If you intend to make a mortgage application on your own then knowing exactly what you need will be very beneficial but even if you intend to use a mortgage broker, knowing what you need and preparing for this in advance will make the process even faster.

What do I need to get a mortgage?

To get a mortgage you will need:

Your credit report

A mortgage deposit and proof of mortgage deposit funds

A stable and reliable income

Your identification, income and tax documents

Your stamp duty funds

Your conveyancer

Home insurance

Your credit report

To get a mortgage you will usually need to know what your credit score is and what your credit report looks like. 

You don’t necessarily need to have this ready as most mortgage lenders will pull this information automatically once you have submitted a mortgage application to them.

Checking your credit score and report will let you know what sort of mortgages you may be looking at and if you need a specialist mortgage broker such as a bad credit mortgage broker to assist you in getting a mortgage.

If you are unsure of what your credit score is then you should check your credit score from the four credit bureaus in the UK: Experian, Crediva, Equifax and Transunion.

Some of these credit bureaus may charge you a fee to view your credit report so what you can alternatively do is request a statutory credit report which is a free credit report which each credit bureau must provide to you upon you requesting it.

Alternatively, you can also use credit score services such as Checkmyfile and clearscore to check your credit report.

Once you have obtained your credit score and history you can then decide if you need a bad credit mortgage broker in getting a mortgage or if you need to take several steps to build your credit score before getting a mortgage.

You do not necessarily need a good credit score and history to get a mortgage but a better credit score and history could save you a substantial amount in mortgage interest repayments.

If your credit score is low you can take the below steps to build your credit score before applying for a mortgage:

Do not make too many credit applications within 3 months

Get on the electoral roll

Keep your credit accounts open for as long as possible

Keep your credit utilization below 30%

Avoid missing any credit repayments

Avoid being late for any credit repayments

Get a credit builder card or loan to show good credit repayment behaviour

A mortgage deposit and proof of mortgage deposit funds

The next thing you will need to get a mortgage is a mortgage deposit and proof of mortgage funds.

Most mortgage lenders will now accept a mortgage deposit of around 5% of the property value.

You can fund your mortgage deposit through:

Borrowing from your family: in this case, you may need a gifted deposit letter

Your savings

Or a government scheme such as:

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy– allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Regardless of which way you fund your mortgage deposit, you will need to have proof of the mortgage funds and proof of where they have come from.

If you are funding the mortgage deposit from your savings, you will simply need to show proof of income from your employment or proof of return from investments.

If your mortgage deposit is being funded from your parents or family then you will need a gifted deposit letter (most mortgage lenders have their own standard template for a gifted deposit letter).

Your family members may also need to produce their banking statements showing where they have obtained the funds from.

If you are funding your mortgage deposit from a government scheme you will usually receive an authority to proceed letter from the government scheme provider.

A stable and reliable income

To get a mortgage you will need to have a stable and reliable income in order to prove to the mortgage lender that you will be able to make the monthly mortgage repayments for the duration of the mortgage term.

Most mortgage lenders will simply require your bank statements for the past 3 months to see regular income payments from your employer.

If you are self-employed then you may need to have your self-employed accounts for the past 3 years but some mortgage lenders may require a minimum of 12 months.

To get a mortgage as a self-employed borrower may also appear much harder and hence a self-employed mortgage broker may help you in this regard.

Your identification, income and tax documents

To get a mortgage you will need your identification, income and tax documents.

For your identification you will need:

Your passport or driving license 

A utility bill no older than 3 months old

For your income you will need:

Your bank statement for the past 3 months and any proof of mortgage deposit

You may need your payslips for the past 3 months

Your p60

You SA302 if you are self employed

Your stamp duty funds

To get a mortgage you will need stamp duty funds.

Stamp duty is a land tax we pay in England when we purchase the property. If you are a first-time buyer you get stamp duty relief if the property you are buying is less than £500k. You will pay no stamp duty on the first £300,000 but pay 5% on anything between £300,00 and £500,000.

The regular stamp duty table looks like this:

If you are buying a second home you will need to pay stamp duty at the additional rate when you get a mortgage.  

The stamp duty table for second homes looks like this:

Your conveyancer

To get a mortgage you will need a conveyancer who will handle the legal searches in relation to the property you want to buy.

The mortgage lender will insist on a conveyancer being present to carry out the legal searches on the property and handle the transfer of the mortgage funds.

Most government scheme providers will, also insist on a conveyancer being present who will handle the funds from the scheme.

The conveyancer or solicitor you choose will usually need to be on the mortgage lenders panel or approved by the mortgage lender before they can work on your mortgage.

This means you will need an approved conveyancer to get a mortgage.

Home insurance

To get a mortgage you will also need home insurance. Most mortgage lenders will insist you get home insurance before you complete on the mortgage and in some cases immediately before you exchange contracts as the property will essentially become yours from that point.

FAQs What do I need to get a mortgage

Use a mortgage calculator to see if you can get a mortgage

A mortgage calculator will allow you to see what your monthly mortgage repayments may look like but they should be used simply as guidance as they are not an accurate reflection of your mortgage affordability.

You may need a mortgage broker to get a mortgage

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we are going to answer the question “what do I need to get a mortgage”. If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.