How to Apply for a Mortgage as a First-Time Buyer

A complete guide to the mortgage application process for first-time buyers.

Before You Apply

Preparation Timeline

When	Action
6+ months before	Check credit, save more deposit
3 months before	Gather documents, get AIP
Property found	Full application
Ongoing	Respond quickly to requests

Affordability Check

What Lenders Assess	Details
Income	Base, bonuses, overtime
Outgoings	Debts, commitments
Credit history	Past behaviour
Deposit size	Affects LTV
Stress test	Can you pay at higher rates?

Step 1: Check Your Credit

What to Do

Action	Why
Check all 3 reports	Experian, Equifax, TransUnion
Fix any errors	Dispute incorrect info
Register to vote	Helps verification
Reduce existing debt	Lowers commitments

Red Flags for Lenders

Issue	Impact
Missed payments	Major concern
CCJs/defaults	Serious problem
Too many applications	Looks desperate
Gambling transactions	Some lenders check
Payday loans	History matters

Step 2: Calculate What You Can Borrow

Typical Multiples

Income Multiple	Example
4-4.5× salary	Standard
Up to 5×	Some lenders
Up to 5.5×	Professionals

Example

Your Salary	Can Borrow (4.5×)
£30,000	£135,000
£40,000	£180,000
£50,000	£225,000
£60,000	£270,000

Joint Mortgages

Combined Salary	Can Borrow (4.5×)
£50,000	£225,000
£60,000	£270,000
£80,000	£360,000

Step 3: Save Your Deposit

Deposit vs LTV

Deposit	LTV	Rate Impact
5%	95%	Highest rates
10%	90%	Better rates
15%	85%	Good rates
20%+	80% or less	Best rates

Sources of Deposit

Source	Accepted?
Personal savings	Yes
Gift from family	Yes (with letter)
Inheritance	Yes (with proof)
Lifetime ISA bonus	Yes
Personal loan	Generally no

Gift Deposits

Required	From Gifter
Gift letter	Confirming no repayment
ID	Proof of identity
Source of funds	How they got money
Bank statements	Sometimes

Step 4: Get an Agreement in Principle

What AIP Is

Feature	Details
Also called	Decision in Principle, Mortgage Promise
Shows	What you could borrow
Not	A guarantee
Duration	Usually 30-90 days

How to Get AIP

Step	Action
1	Choose lender/broker
2	Provide basic details
3	Soft credit check
4	Receive AIP certificate

Benefits of AIP

Benefit	Why
Know your budget	Realistic house hunting
Estate agents	Take you seriously
Sellers	Confident you can proceed
Speed	Faster when you find property

Step 5: Choose a Mortgage

Mortgage Types

Type	Features
Fixed rate	Set rate for 2-5+ years
Tracker	Follows base rate
Variable	Lender can change

What to Compare

Factor	Consider
Interest rate	Lower is better
Fees	Product fee, booking fee
Term	25-40 years
Early repayment charges	If you might move
Overpayment options	Flexibility

Using a Broker

Pros	Cons
Whole market access	May charge fee
Expert guidance	Not always independent
Handle paperwork	Still need documents
Often free	Some charge

Step 6: Full Application

Documents Needed

Document	Purpose
Passport/driving licence	ID verification
Utility bills	Address proof
Last 3 months’ payslips	Income evidence
Last 3 months’ bank statements	Spending patterns
P60	Annual income
Proof of deposit	Savings statements
Gift letter	If applicable

Self-Employed Extra

Document	Purpose
2-3 years’ accounts	Income evidence
SA302	Tax calculations
Tax year overviews	HMRC verification
Accountant reference	Sometimes

The Process

Stage	Timeframe
Submit application	Day 1
Initial assessment	1-3 days
Valuation arranged	1-2 weeks
Underwriting	1-2 weeks
Mortgage offer	2-4 weeks total

Step 7: Property Valuation

Types of Valuation

Type	Purpose
Basic valuation	Lender’s check
Homebuyer report	Medium survey
Full survey	Comprehensive

What Lender Checks

Assessment	Looking For
Property value	Worth the loan
Condition	Structurally sound
Legal issues	Lease length, etc

Valuation Issues

Problem	Impact
Down-valued	May need more deposit
Unmortgageable	Can’t proceed
Queries	Delay for answers

Step 8: Mortgage Offer

What It Contains

Section	Details
Loan amount	What you’re borrowing
Interest rate	Your rate
Monthly payment	What you’ll pay
Term	How long
Conditions	What must happen

Offer Duration

Typical	3-6 months
Can extend	Sometimes
May expire	If completion delayed

Step 9: Exchange and Complete

The Final Steps

Stage	What Happens
Solicitor completes searches	Legal checks
Exchange contracts	Legally committed
Deposit paid	Usually 10%
Completion	Keys handed over
Mortgage starts	Repayments begin

Timeline

Stage	Typical Time
Offer to exchange	4-8 weeks
Exchange to completion	1-4 weeks
Total process	8-16 weeks
First payment	Month after completion

Common Problems

Application Issues

Problem	Solution
Not enough income	Joint application, smaller property
Credit issues	Improve score, specialist lender
Complex income	Use broker
Low deposit	Save more, family help

During Process

Problem	Solution
Down-valuation	Renegotiate, find more deposit
Survey issues	Renegotiate price
Chain delays	Stay in contact
Document requests	Respond quickly

First-Time Buyer Benefits

Stamp Duty Relief

Property Price	Stamp Duty
Up to £425,000	£0
£425,001 - £625,000	5% on portion over £425k
Over £625,000	Normal rates (no FTB relief)

Example

£500,000 Property	Calculation
First £425,000	£0
Remaining £75,000	£75,000 × 5% = £3,750
Total stamp duty	£3,750

Lifetime ISA

Benefit	Details
25% bonus	On up to £4,000/year
Max bonus	£1,000/year
Property limit	Under £450,000
Use for	Deposit

Summary Checklist

Stage	Complete
☐ Check credit reports
☐ Calculate budget
☐ Save deposit
☐ Get AIP
☐ Find property
☐ Full application
☐ Valuation
☐ Mortgage offer
☐ Exchange
☐ Complete

Documents Ready	✓
ID
Address proof
Payslips (3 months)
Bank statements (3 months)
P60
Deposit proof
Gift letter (if needed)