Last reviewed on 20th August 2023 by Martin Alexander (Mortgage Advisor)

If you’re applying for a mortgage, this guide will explain everything you need to know. As the saying goes, fail to prepare, then prepare to fail. The saying couldn’t be more true, especially when applying for a mortgage.

A mortgage checklist can certainly help you in more than one way. Trying to find the best mortgage possible is never easy. Having an understanding of how the mortgage process works can give you an edge in getting approved.

This checklist will help you to spot any potential errors in your application. Furthermore, we’ll help you rectify any issues to ensure your application is the strongest it can be.

Preparing for your mortgage application

Mortgage lenders have a legal duty to inspect your application with a magnifying glass. This will include probing into details surrounding your employment, income, spending habits, and overall financial profile.

It’s best to start preparing your checklist around three months before applying for a mortgage. This allows you to organise your finances just that little bit better.

Preparing for your mortgage includes:

• Saving as much as you possibly can for a deposit
• Reducing your outgoings and credit card debt
• Avoid gambling and questionable purchases
• Showing that you have an income to repay a mortgage
• Checking your credit file and making sure it’s correct

What does your credit history say?

Your mortgage lender will carry out a credit check on you. This can either work in your favour or against you.

Before applying for a mortgage, keep your credit file healthy by doing the following:

• Ensure you’re on the electoral roll at your current address
• Make sure your mail and bills are delivered to your existing address
• Repay your credit cards in full, preferably with a monthly direct debit
• Close unused bank accounts and credit cards

If you’ve not yet downloaded your credit reports, there’s no better time than now. Checking your credit file should be at the forefront of your mortgage checklist.

Even though you may think you have a great credit score, your credit file could suggest otherwise. Errors on your credit file can result in you being declined, so it’s a good idea to check everything is correct before applying.

If you have bad credit, you’ll certainly need to prepare that bit more for a mortgage. Take steps to improve your credit immediately. Lenders may also recognise that you’ve taken action to repair your financial profile, which can help with your application.

Learn more: How can I improve my credit score for a mortgage?

What do I need to apply for a mortgage?

To apply for a mortgage, you’ll need to submit a mortgage application. This involves providing your lender with certain documents. Having these ready can certainly help.

To apply for a mortgage, you may need to provide the following:

• Proof of address (utility bill, bank statement)
• P60 from your employer
• Proof of identity (passport or driving license)
• Three months’ payslips
• Three months’ bank and credit card statements
• If you’re self-employed, a minimum of one year’s accounts and SA302
• Any proof of benefits (if received)

It’s also important that the information you provide matches the documents you’ve provided. For instance, if you’ve changed your address, make sure your passport and driving license reflect this change.

Some lenders may require further documents, especially if your case involves bad credit or there are discrepancies. It’s also important to know that you may need to submit hard copies of documents, as some lenders won’t accept digital copies.

Which mortgage type should I choose?

Each of us has different financial circumstances. While one mortgage may suit one person, there may be a better mortgage for somebody else. There’s no doubt that your mortgage advisor will go through each option with you, but it helps to be prepared. Having a mortgage type in mind can save you a lot of time during your application process.

Conversations to have with your mortgage advisor include:

• Outline the overall cost of a mortgage, not just the interest rate
• Does your mortgage have early repayment charges if you choose to switch early? If so, how much?
• Will your mortgage allow you to switch once your initial term expires?
• Is it worth paying higher fees to secure a better interest rate?
• Are there any incentives to taking a particular mortgage deal?

How long do you want your mortgage for?

The length of your mortgage, also known as your mortgage term, should be something to think about. Most mortgages are taken on 25-year terms but they can be longer or shorter, depending on what suits you.

Shorter mortgages will allow you to pay less overall interest, but they will be more expensive each month. This is because you’re repaying your mortgage in a shorter space of time.

Lengthier mortgage terms are likely to be more expensive overall. That being said, your payments are spread out over a longer period of time, so your monthly payments will be lower.

Mortgages also have introductory periods, where interest rates are discounted for the first 2, 3 or 5 years of a mortgage. 2-year rates are typically lower, but 5-year rates can offer more security, as your deal is simply fixed for a longer period.

How do you want to repay your mortgage?

There are many ways of repaying your mortgage. Each mortgage product has its own set of fees, rates and methods of repayment.

The mortgage types available, include:

• Fixed-rate mortgages
• Tracker or variable-rate mortgages
• Offset mortgages
• Mortgages with an overdraft
• Flexible mortgages

Some mortgages have fixed interest rates, whereas others will follow the Bank of England base rate. Others allow you to overpay, whereas some will penalise you for doing so.

It’s important to understand each mortgage type, as the right mortgage can really help your finances bloom. In comparison, selecting a product that’s not suitable can have negative consequences.

Learn more about the mortgage deals on offer here.

Understanding the cost of a mortgage

Preparing for the expense of a mortgage should be part of your checklist. Although your advisor and lender will carry out affordability checks, it’s important to think about the new cost and responsibility of a mortgage.

There are also other costs involved when buying a property with a mortgage. Unexpected costs can result in having to borrow more than first anticipated.

Home buying costs include:

• Mortgage fees (lender fees, broker fees)
• Conveyancing costs
• Stamp duty land tax
• Property survey
• Insurances (buildings, contents, life insurance)

Some of these costs may not apply. For instance, you may be exempt from stamp duty tax, or choose not to have a building survey.

Should I get a property survey?

Your mortgage lender will organise a survey of the property you hope to buy. This is classed as a mortgage survey and is purely for the lender to ensure that the property meets their requirements for the loan.

Mortgage surveys can pick up obvious issues but can miss deep underlying problems. You can arrange to have an independent survey carried out before you make any commitments.

There are also different surveys you can choose from:

• A condition report (entry-level option, covering the basics)
• Homebuyer report (more detailed and more expensive)
• Building survey (most expensive and most comprehensive)

When deciding on the survey you require, there’s an element of common sense involved. For instance, if you’re buying a property that’s over 100 years old, a building survey might make sense.

On the other hand, if you’re buying a new build, a mortgage survey probably won’t be worth it.

How to conclude your mortgage checklist

Now you have a greater understanding of what your mortgage checklist should include, you may be wondering what the next step is.

Speak to a mortgage advisor who can assess your situation to then recommend what steps to take. Furthermore, you’ll have an idea of your property budget and how much you’re able to borrow.

Having a budget that’s confirmed by a mortgage advisor can give you the confidence to begin your property search. If you’ve already found a property, speak to an advisor who can inform you of suitable mortgages.