Arranging a Mortgage

A mortgage is a loan taken out to buy a property or land, this is usually over a longer term than a normal loan e.g. 35 years, making the payments affordable. The mortgage is secured against your home until it is paid off, or the term ends, whichever comes first.

How much can I afford?

If you haven't already made a budget in the MoveReady mobile app, you can use our Move Budget tool to work out how much you can afford however take into consideration the running costs of a home, your luxuries like holidays & eating out. It’s a long-term investment so don’t stretch yourself if you think you’ll struggle to keep up with the payments. Lenders will also take credit card balances, loan payments, hire purchase and lease payments into account so make sure you include these in your outgoings.

What do I need?

You will need to provide identification in order to comply with Money Laundering Regulations, proof of earnings (payslips or Tax Calculations if self-employed) bank statements and any other debt or savings you have (including your deposit). Lenders will ask for an income and expenditure form to be completed which is a handy tool for understanding your own budget.

Broker vs Lender

You can apply for a mortgage directly from a bank or you can also use a mortgage broker. A bank can inform you of all their own products however a mortgage broker will advise you on the best lender and rates based on your circumstances. They will look at all mortgages offered across the market (unless they state otherwise - some only deal with specific lenders). It's important to check that your mortgage broker offers 'whole of market’ or comprehensive advice, as this means they will be able to look across more lenders to get you the best deal.

Most mortgage brokers are reimbursed for their services by the lender with no additional cost impact on your mortgage however they can request a fee from you for the advice. This can be upfront or in most cases paid on receipt of a mortgage offer, a kind of success fee.  If they do request a fee up front, then they must state this before arranging your mortgage. You will receive a terms and conditions document which covers fees and what kind of advice you can expect.

Applying for a mortgage

There are two parts to the process, the first is effectively a fact-finding mission - how much you can afford and what type of mortgage would be best, resulting in a 'Mortgage Agreed in Principle'. If successful you will get a certificate indicating how much you can borrow based on the information you have provided. 

Having a mortgage agreed in principle when making offers, shows a seller that you can afford the offer you are making and that you're serious about moving. This increases the chance of your offer being accepted and is why a mortgage agreement in principle is needed to be MoveReady.

The second part is the full application, which is submitted when you’ve found a property and agreed a price.  Most lenders will manually underwrite the application, checking all the information provided is correct and will subsequently instruct a valuation on the property you are looking to purchase. Depending on the mortgage product chosen and the lender, the valuation may be a free valuation so one less cost to worry about. The lenders are required to carry out a mortgage valuation (sometimes referred to as a survey) to determine whether the property is suitable security for a loan and fits all their specific criteria and to ensure that the money they will be lending you is justified and responsible lending.  

You can find more info in our guide to surveys.

What is a mortgage offer?

Once you have gone through the mortgage application process, if the lender is happy with all the information received, they will issue a mortgage offer. This is an agreement to lend and will confirm the amount borrowed, the term of the mortgage, the rate offered and the monthly payments. You will receive a copy of the offer and your solicitor or conveyancer will also receive a copy detailing the legal aspects and timescales for drawing funds down between exchange and completion.