Can I get a mortgage?
For people wondering if they’re eligible for a mortgage. Learn how lenders decide who to offer a mortgage to and what you need to apply.
What do lenders look at?
When you apply for a mortgage, a lender will want to know that you can repay the money you borrow. They’ll look at lots of factors to decide whether you are eligible for a mortgage.
These include your finances, any debts, your credit history, how much you earn and how much you spend.
Making checks is a way of making sure that the person is comfortable with the repayments and can afford them.
Mortgage eligibility factors
A lender will look at lots of things including:
Check your eligibility with an agreement in principle
One of the key methods of checking your mortgage eligibility is to apply for an agreement in principle.
By applying for an agreement in principle, a lender will ask for financial information. They’ll use this to perform a soft credit check to let you know if you're likely to get a mortgage.
It will also show you how much you might be able to borrow before you make a full mortgage application.
Let’s look at the details
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You might need to show your provider some documents to prove your eligibility, such as:
- P60 tax form from your employer to show your salary details and how much tax you pay.
- Payslips – usually the last three months.
- ID, such as your passport or driving licence.
- Utility bills to show your regular outgoings. Electric, gas, water, council tax.
- Proof of address – a bank statement or bill.
- Proof of any benefits or income support you’re receiving.
- Bank statements from the past three to six months.
- Other debts – if you already have a mortgage or loan, you’ll need to disclose the details.
If you’re self-employed, your lender may also ask to see:
- Tax return forms.
- Your accounts from the last two to three years.
- Expenses receipts.
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There’s no way to guarantee being accepted for a mortgage. But there are things you can do to help increase your chances.
- Have a high deposit or low loan to value (LTV). The higher your deposit and lower your LTV ratio, the less you’ll need to borrow.
- Build up your credit score. This could make companies more willing to lend to you.
- Having a strong financial history. If you have little or no outstanding debts on your record, lenders may see you as a safe option.
- Get an agreement in principle. You can get this before applying for a mortgage in full. It’s not a guarantee, but it is a good indicator of what you might be eligible to borrow.
- Buy with a partner. If you’re buying with a friend or partner, how much you can borrow is based on your combined income.
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Buy to let mortgages are when you buy a property to rent out, instead of to live in. You’ll need to meet stricter criteria to be eligible and lenders will look at:
- A deposit of at least 25%. Some lenders ask that you pay a deposit of around 40%.
- Your age.
- Monthly income.
- Planned rental income from the property.
- Credit history.
- Current mortgage.
- Other Buy to let homes that you own.
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