The UK has one of the most developed financial sectors in the world, with the mortgage sector particularly liquid. Most lenders will offer a mortgage of up to 4.5 times the salary of an individual or a combined joint application, subject to status. In certain circumstances, some mortgage lenders will offer more than 4.5 times their income, which may involve an additional degree of security. In light of the 2008 financial crisis, the UK government introduced an affordability test for all mortgage applications. This was recently lifted, giving mortgage lenders greater flexibility.

The mortgage application process is relatively straightforward in principle but a little more complicated in practice. The basic stages are:-

• Gather income and employment details together with details of outgoings
• Approach a mortgage provider for a decision in principle
• If you receive a favourable principle decision, apply for a mortgage
• Purchase your property

It is now commonplace for those looking to acquire a property to appoint a financial advisor with experience and expertise in the mortgage sector. Mortgage brokers can cast their net over the entire market to find the best deal for your situation. In addition, experienced mortgage brokers will have an array of contacts in the market, allowing them to potentially negotiate favourable terms and conditions not readily available to the general public.

Traditionally, it takes between two and six weeks to arrange a mortgage, but with remortgages, it is usually completed a little quicker. If the mortgage provider has additional questions or requires proof of income, this timescale can be extended. Rather than visiting potential future homes and then arranging mortgages, many people start the mortgage application process before looking for a property. This ensures potential buyers know the reach of their finances. As much of the groundwork has already been done, the mortgage confirmation process can be shortened.

As soon as you decide to look for a property, this is the time that you need to research the latest mortgage deals and your eligibility. This allows you to go through all options before committing to a house purchase.

There is no minimum deposit requirement set in stone. However, to access some of the more competitive mortgage rates, the average deposit is around 20%. A more significant deposit creates broader headroom between the outstanding mortgage debt and property value. This reduces the lenders’ risk, opening the door to more competitive mortgage rates.

Historically, the UK government has offered various degrees of financial assistance to first-time buyers. This has included numerous help-to-buy schemes where the minimum deposit can be as low as 5%. These schemes allow homeowners to acquire 75%+ of a property through mortgage finance, 5% via a deposit, with government funding of up to 20%. After the initial purchase, homeowners can buy equity from the government, increasing their share of the property. The cost is based on the market value at the time.