Step 1: Check and improve your credit score
Before you do anything else, check your credit reports with all three UK credit reference agencies — Experian, Equifax, and TransUnion. Each holds slightly different data, and lenders may use any one of them. You can check for free using services like ClearScore, Credit Karma, or the agencies' own free tools.
Common issues that can derail a mortgage application include:
- Errors on your file: Incorrect addresses, accounts that are not yours, or debts already repaid. Dispute these immediately with the relevant agency.
- Not being on the electoral roll: This is one of the easiest ways to boost your score. Register at your current address even if you are renting.
- High credit utilisation: If you are using more than 30% of your available credit card limits, pay them down before applying.
- Missed or late payments: Even one missed payment stays on your file for six years. Ensure all bills are paid on time from now on.
- Too many credit applications: Each application leaves a hard search on your file. Avoid applying for credit in the six months before your mortgage application.
Step 2: Get your finances in order
Lenders examine your bank statements (typically three to six months) in detail. They are looking for evidence of responsible financial management and checking your declared income and outgoings match reality.
In the months before applying:
- Avoid gambling transactions on your bank statements — many lenders view these negatively
- Reduce unnecessary subscriptions and discretionary spending
- Stop using buy now pay later services
- Clear any overdraft usage and avoid going into your overdraft
- Build a pattern of regular saving to demonstrate financial discipline
Step 3: Save your deposit
The minimum deposit is 5% of the purchase price, but 10% or more gives you access to significantly better rates. Keep your deposit in a savings account in your name (or a Lifetime ISA for the government bonus). Lenders need to see a clear paper trail of where your deposit came from.
If any part of your deposit is gifted, the person gifting the money will need to provide a letter confirming it is a gift with no expectation of repayment and that they have no interest in the property. They may also need to provide ID and proof of the source of their funds.
Step 4: Get a mortgage agreement in principle
An agreement in principle (AIP), also called a decision in principle (DIP), is a conditional confirmation from a lender that they would lend you a specific amount based on a preliminary assessment of your circumstances. It typically involves a soft credit check that does not affect your credit score.
An AIP serves two purposes: it tells you your budget so you know what price range to search in, and it shows estate agents and sellers that you are a serious buyer. Most AIPs are valid for 60–90 days.
A first time buyer mortgage broker can obtain an AIP from the most suitable lender for your circumstances, ensuring the right lender sees your application from the start.
Step 5: Find a property and make an offer
Once you have your AIP, you know your budget. When you find a property and your offer is accepted, the formal mortgage application process begins. You will need to provide the full address and purchase price to your broker or lender.
Step 6: Submit your full mortgage application
The full application requires comprehensive documentation. Gather these before you need them:
- Proof of identity: Passport or driving licence
- Proof of address: Utility bills or bank statements from the last three months
- Proof of income: Three months of payslips and your latest P60 (or two to three years of SA302 tax calculations and tax year overviews if self-employed)
- Bank statements: Three to six months for all accounts
- Proof of deposit: Savings statements showing the source and accumulation of your deposit
- Credit commitments: Details of any loans, credit cards, or other debts
- Gift letter: If any part of the deposit is gifted
Step 7: Property valuation and survey
The lender will arrange a valuation of the property to confirm it is worth the purchase price and is suitable security for the mortgage. This is for the lender's benefit, not yours. You should also arrange your own survey — a HomeBuyer Report for most standard properties, or a full Building Survey for older or unusual properties.
If the valuation comes in below the purchase price (a down-valuation), you may need to renegotiate the price, increase your deposit to cover the shortfall, or find a different property. Your broker can advise on the best course of action if this happens.
Step 8: Mortgage offer
If the lender is satisfied with the valuation, your documentation, and the underwriting assessment, they issue a formal mortgage offer. This is a legally binding commitment to lend, typically valid for three to six months. Your solicitor will receive a copy and can proceed with the legal work.
Step 9: Legal completion and exchange
Your solicitor handles the conveyancing — searches, title checks, and contract preparation. Once everything is in order, you exchange contracts (at which point the purchase becomes legally binding) and then complete, at which point the mortgage funds are released, the seller receives payment, and you get the keys.
Common reasons first time buyer mortgages are declined
- Affordability: The lender's stress test shows you cannot afford repayments if rates rise
- Credit issues: Missed payments, CCJs, defaults, or excessive debt
- Deposit source: Unable to demonstrate where the deposit came from
- Employment: Insufficient employment history, probation period, or unstable income
- Property issues: The property is not acceptable to the lender (non-standard construction, short lease, etc.)
If you are declined, do not simply apply to another lender — this can create multiple hard searches that further damage your credit score. Instead, work with a first time buyer mortgage broker who can identify the reason for the decline and direct your application to a lender more likely to approve it. Get Matched Free with a specialist broker today.