How to get a Mortgage in the UK

04 Aug 2022 - Category: Blog /
mortgage uk

Owning your own home is a lifelong dream for many of us. However, it can be difficult without the right guidance and paying close attention to property market trends. Buying a home in the UK is an exciting prospect, and here we're looking at some of the main steps involved to ensure it is a success. Below we're going to look more closely at:

Assessing your Situation

Mortgages are approved every day in the UK. In 2021, one study found there were 944,487 mortgage approvals. The number is increasing year on year as more people want the opportunity to own their own homes. If you're at the stage of making an application, you have probably already assessed your situation. However, this is the first step toward getting a mortgage.

Before applying, you need a good understanding of your financial position and credit score. All mortgage lenders will look into your financial and credit history, so you should ensure you know where you stand. If you find anything negative on your credit report, then make the necessary arrangements to fix them. If you need to repair your credit in any way, it is not the right time to apply for a mortgage.

Preparing for your mortgage application

Mortgage lenders' prime concern is whether you can repay the debt. They will use all the tools at their disposal to assess your ability to repay the mortgage you wish to apply for. Most lenders have an online eligibility calculator, which can help you get a better understanding of the rates they may be able to offer. These calculations are never 100% accurate, so it is important to research the lenders suitable for your circumstances and offering favourable rates.

Once you make your application, the mortgage lender will explore your financial documentation and request your credit report. They will look in-depth at your income and expenditure, including existing loans, mainstream income, and income from side hustles that could be included to pay the mortgage debt. All this information should be ready, so you can simply hand it over and be ready for the results.

Essential documentation

As we've mentioned, your prospective lender will need to check your financial responsibility and will want to assess many of your financial records. They will usually require your utility bills, payslip from the last three months before the application, your P60 and proof of any benefits you receive. You also need to provide any proof of income from secondary sources. Self-employed individuals will not have a P60 or payslips but instead can provide an SA302 tax form. Self-employed people also need to submit several years of accounts or tax returns. Individual lenders will also have specific terms and document requirements to keep in mind. All lenders will need to check your identity and will require your passport and driving licence.

Getting expert advice

There are many different mortgage types out there and hundreds of lenders. Crunching the numbers and finding the best deal is difficult when you don't have experience in the sector. A mortgage advisor or broker is the perfect person to turn to for advice about the right options for your needs. Finding a reliable and experienced broker or advisor gives you even more insight into the industry and will help ensure you get the best possible deal. They can help you find the most affordable rates and even help you with your repayment strategy. This information leaves you better prepared for when you make your mortgage application.

Online mortgage advice can be handy but remember, it is not specific to your situation. Online resources can only give you a general picture of the road ahead, while an expert working on your behalf can be specific and tailor their service to you. There are many solutions, but without the right advice, you may miss out on your best option.

Mortgages for Non-UK citizens

Non-UK citizens can and regularly do get approved for mortgages. Both first-time buyers in the UK and experienced property owners can purchase a home in the UK, but some requirements have to be satisfied. Lenders will only offer mortgages to people with a good credit history in the UK. Unfortunately, it does not matter if you have a perfect record in another country. It is only the UK that counts. People arriving in the UK should quickly work to build their credit score and be aware it may be some time until they can apply for a mortgage. The conditions for mortgage applications also depend on some other factors, including:

For EU Citizens

EU citizens can apply for any mortgage like a UK citizen if they have:

  • Three or more years of living in the UK
  • A UK bank account
  • A permanent job in the UK

For Non-EU Citizens with Permanent Residence

People in this category will need to prove to lenders that they:

  • Have lived in the UK for at least two years
  • Have a permanent job in the UK
  • Have a UK bank account
  • Can raise a sizeable deposit, maybe as high as 25% of the property's value

There are other circumstances where immigrants can apply for a mortgage in the UK. It is vital to get the correct advice, but you may be able to apply for a mortgage if you have a Tier 2 work visa, a UK Ancestry visa, a Residence Card or a Family visa.

It is more vital than ever you access specialised financial support if you want to apply for a mortgage as an immigrant in the UK. There are plenty of options, but you must ensure you apply for the right types of mortgage and are suitably ready in line with the lender's expectations to avoid disappointment.

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