A brief guide to the mortgage application process

 Couple meeting financial adviser for real estate project

Applying for a mortgage is inherently complicated. This guide outlines the steps involved in the mortgage application process; it is meant for readers who have an idea of what they can afford and are looking for the best mortgage deal available.

What does the mortgage application process look like?

  • With a rough property value in mind and an idea of what percentage deposit you’ll be able to pay, your first step is to look at mortgage products available on the market.

This involves speaking directly with lenders (i.e, banks, building societies, etc.) or with a mortgage broker, and shortlisting a few deals that fit your criteria.


  • The next step is to receive ‘key messages about the mortgage service’ from your lender or broker.

This includes the name of the lender(s) whose deals you will look at, the cost of their service (including fees or commission if you're using a broker) and whether details provided are information-only or count as advice. Mortgage brokers are legally required to give advice.


  •  Then you should decide whether or not to accept advice. If you do not accept advice, the mortgage is execution-only.

This may reduce your chances of acceptance if you don’t fully understand what you’re applying for. It may also prevent you from being able to claim compensation if it turns out the mortgage was mis-sold.


  • You can now identify mortgage products suitable for your circumstances and request detailed information on each one.

This information will usually come in the form of a Key Facts Illustration (KFI), and will outline repayments, fees, the overall cost, interest and term, any changes in interest, whether or not you can underpay, penalties, and various other aspects of each mortgage deal.


  • Once you find a deal you like the look of, you can choose to state your agreement in principle (AIP).

This is a non-binding agreement between lender and borrower that the specified mortgage deal could be made.


  • Your eligibility to borrow will then be assessed.

The potential lender will look at your financial circumstances including credit rating, proof of income, outstanding debt and more. Our guide to common reasons for mortgage rejection can help you understand which factors impact your chances.


  • The value of the property will also be assessed.

The lender needs to be sure that the property provides suitable collateral for them to recoup their losses if you are unable to pay. A valuation is carried out. This is also the time when you can request a survey (see our guide to homebuyer surveys here).


  •  When the lender has decided you are suitable, you will receive a mortgage offer.

This is a document officially offering you the mortgage deal outlined in the KFI. At this stage, you should check the offer against the KFI and raise any inaccuracies or discrepancies with the lenderIf all goes well, the offer is a legally binding statement that you will receive the mortgage.

On completion, your solicitor will request the money from the lender and transfer it to the seller’s solicitor.

At this point the title deed is transferred, revoking the seller’s bank’s claim to the property. You now own the property and can begin paying back the mortgage on the agreed terms. 

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