What you need to know when applying for a mortgage

If you are applying for a mortgage for the first time, it can seem like a daunting process. Once you start though, a mortgage agreement can usually be sealed relatively quickly. Just make sure you have all the required forms and information to hand.

When you have found your property and chosen a lender such as the Halifax (www.halifax.co.uk) or Santander (www.santander.co.uk) you will need to start your application by filling in the lender's form. This can often be done online or over the phone, depending on your lender.

Lenders will require evidence of your income, your identity, your current address and sometimes a previous lender or landlord's reference. If you are self-employed and don't have an acceptable proof of income (recent tax returns for example) you may be able to get a self-certification mortgage, although interest rates may be higher.

Your lender will have the property valued to ensure it matches the price you are paying, which will affect the sum they are willing to lend. The property will be collateral for the mortgage so they need to ensure its value matches or exceeds the full amount of the loan.

One a mortgage is agreed, the lender will send you a formal mortgage offer. Often there is a proviso that you must take out buildings insurance, and/or life insurance as a condition of the lender finalizing the loan.

Note that, in Scotland where a different property law applies, it is possible to negotiate a mortgage in principle before you have made an offer on a property.

For general advice on applying for a mortgage, the Citizens' Advice Bureau have published some tips and guides at www.adviceguide.org.uk.

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