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The Mortgage Application Process: Everything You Need To Know

Professional Mortgage Advice

Mortgage application with house keys on top

Applying for a mortgage is an exciting time in your life, but it can also be a daunting experience.

The mortgage application process can often be stressful and drawn out, especially if you are a first-time buyer, but by doing sufficient research beforehand you can ensure you are as organised as possible. Have a read of this step-by-step guide to find out all you’ll need to know!

Are You Mortgage Ready?

We’d recommended that you first organise your mortgage before seriously looking for properties.

You need to get your finances in order, do some research, and get advice from an independent mortgage broker as they can help you get the best mortgage deal available to you, and can try and help avoid any potential issues.

Most lenders will look at your financial history and check:

  • Credit Scores Mortgage lenders will undertake a credit check as they will want to make sure you have a steady credit history and are a reliable borrower. Use sites such as Check My File or Experian to download a credit report and see what your credit record is like, and you can find out how to improve your credit score here if need be.
  • Income Lenders will want to see evidence that you have a reliable income. Usually, you will be asked to provide your last 3 months’ payslips and/or bank statements on the application.
  • Employment History Any risk or uncertainty is off-putting for some lenders, so most won’t want to lend if you’re in a probationary period at a new job. It may be better to wait a while so you can prove your new role is secure and you have a steady income. If you are recently self-employed, you will need to provide lenders with detailed evidence of your income, which is often 2-3 years of self-assessment tax returns.

The Mortgage Application Process Step By Step

Once you’ve done your prep, it’s onto the mortgage application. Here are the key steps in the mortgage process.

What’s your budget?

Your budget should have two figures; the amount you need for a deposit, and the remaining amount you need to borrow (your mortgage amount). When added together, this will be the property price you can afford. 

  • Your deposit. This is the amount you have available in savings as an initial payment. Lenders will often look for a minimum of 10% of the property value as a deposit, although some lenders have mortgage products available with just a 5% deposit.
  • How much you can borrow? This is based on income. More often than not, a mortgage lender will lend up to 4.5 times your annual household income.

This can vary from lender to lender, so you will need to speak with a mortgage broker who will be able to advise you based on your individual situation.

Gather important documents

Applications can differ from one lender to the next, but you’ll definitely be asked for:

  • ID and proof of address. This could be a passport, driving licence and council tax bill or bank statement to prove your current address
  • Proof of income such as payslips and P60s. If you’re self-employed, you’ll need 2-3 years of tax assessments and business accounts
  • Bank statements. Lenders will want to run the numbers to work out what you can afford to repay. They may also ask for proof of deposit, so you can show that you have the funds available to make the initial down payment.

Should you apply yourself or hire a mortgage broker?

Often first-time buyers use a mortgage broker to help guide them through the application process, although it is possible to apply for a mortgage alone and deal directly with the lender yourself.

Mortgage brokers can help:

  • Choose the right mortgage deal. There are thousands of products available, from lots of different lenders. A broker can help you navigate all of your options.
  • Understand the mortgage conditions and fees. Some mortgage deals will include lender fees and extra charges for early repayment. A mortgage broker will explain all of these in detail, and walk you through the application process.
  • Make sure your application is perfect. Different lenders have different requirements, but a broker’s job is to help you find the perfect mortgage product for your circumstances.

Mark Thurman from Millennium Mortgages says: “All lenders are different and use different metrics to calculate the amount you can borrow. You can end up spending hours researching everything yourself, but end up being more confused than anything. At Millennium Mortgages we’ve got a wealth of experience dealing with the different requirements of lenders, and we can certainly make your life a lot easier when it comes to applying for a mortgage!”

Mark Thurman, Managing Director, Millennium Mortgages

What fees and charges will there be?

Millennium Mortgages’ standard broker fees are £399 (September 2023), but the costs involved can vary based on the complexity of the case. Other fees to consider are stamp duty, solicitors’ fees and survey costs. For a more detailed breakdown, please see here.

Get A Mortgage Agreement In Principle (AIP)

A mortgage in principle, also known as an AIP or Decision in Principle (DIP) is an official document from a lender confirming that they think you’d get accepted for a mortgage. It also shows how much you’ll likely be able to borrow.

Although you don’t have to get an AIP to look at properties, it helps to have one as:

  • You’ll be safe in the knowledge that a lender is more likely to approve you for a loan.
  • You can make sure you’re only viewing houses at a purchase price you can afford.
  • Many estate agents and sellers won’t accept an offer, or even let you view a property in some cases unless you have a mortgage in principle to show them.

It’s also at this point that you will receive a mortgage illustration. It will outline all the details of the mortgage offer at a high level so that you understand the mortgage terms.

Find a property

Now it’s time to start house hunting. Once you’ve found a house you want, you’ll be in a position to make an offer. Having an AIP is good as the estate agent will know you’re a serious buyer. If the property has a lot of interest, it will give you an advantage over other people who may not have an AIP in place.

It is important to note that many lenders’ agreements in principle are only valid for 30 days, so although you don’t want to rush the mortgage application process, you need to be clear about wanting to progress.

Make a formal mortgage application

Once you’ve had an offer accepted on a property, it’s time to apply for a mortgage!

Using a broker makes this process quick and easy as all you’ll have to do is let them know you’re ready to turn your mortgage in principle into an actual application. They’ll already have all your details to hand, so there will be nothing for you to worry about.

Mike Plaster, a Mortgage Advisor for Millennium Mortgages says: “We’ll not only be able to find the best lender and deal available to you, but we’ll also fill in the application and handle the whole process from start to finish. This will not only mean that you have the best possible chance of being approved for a mortgage, but hopefully, we’ll be able to take a whole lot of stress away for you too.”

Mike Plaster, Mortgage Advisor, Millennium Mortgages

Credit checks

Before your mortgage is approved, your chosen lender will complete some final credit checks. It’s important to remember that these will not be a soft credit checks, meaning they will leave a mark on your credit file.

This is so that the lender can check your credit reports to ensure that there haven’t been any unusual transactions or increased credit commitments.

Legal/conveyancer fees

You will need to instruct a legal representative who will oversee the conveyancing process for you. They will legally transfer ownership of the property to you, as well as conduct a property search. Conveyancing fees are typically between £1000-£2000.

Mortgage valuation

Lenders will want to check that the house is worth the price you’re going to pay, so will often request a mortgage valuation before issuing an official mortgage offer. This could either be done in person or be a ‘drive-by’ valuation.

Receive a formal mortgage offer

If a lender approves your application, it will make you a formal offer. Mortgage offers are usually valid for up to six months, whereas remortgage offers may only be valid for 3 months, although this can vary between lenders.

You should expect to receive your mortgage offer within 4 weeks of applying, although this could be longer depending on your personal circumstances.

Once you have a formal mortgage offer, your conveyancer will begin to arrange to transfer the mortgage funds from your mortgage lender to the person you are buying the property from when you complete it.

Exchange contracts

From your lender’s point of view, you could exchange contracts anytime after your mortgage is officially offered. That said, most people will still need to wait around 1-2 months before they exchange.

While your lender has been arranging everything for your mortgage, your conveyancing solicitor will have been gathering the legal documents for the house purchase to complete. This involves a lot of liaising with the seller’s solicitors, so it can take a while.


Completion is the final milestone in the process. This is where your mortgage money will be transferred to the solicitor and the transaction can be finalised. You will be able to pick up your keys once you have completed!

Your first mortgage payment

Your first payment will usually be higher than your standard monthly payment. This is because you pay your mortgage one month in arrears, so the first payment will often include one full mortgage payment, plus any interest accrued from completion up until your first payment date. Your mortgage provider will tell you how much your first payment will be shortly after completion.


Although the application sounds complex (and it often also has some hiccups along the way), it is worth the short-term stress in the long run. Our job at Millennium Mortgages is to guide you through your mortgage application, find the best deal available to you, and make the process as stress-free as possible.

Don’t hesitate to reach out to one of the team to find out how we can help.

The information contained within was correct at the time of publication but is subject to change.

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