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How to get a mortgage

Finding your dream home in the UK is exciting, but buying it can be a bit challenging, especially if you're from another country or not a UK citizen. So, let's dive into what you need to know about getting a mortgage in the UK and navigating the market.

Who can get a mortgage in the UK? To get a mortgage in the UK, you need to prove your identity and show that you can make your monthly mortgage payments. It's pretty simple:

  • You need to be at least 18 years old.

  • You should have a valid passport or driving license.

  • A steady household income is required.

  • You need to have a good credit score that convinces lenders to lend you the money.

But what about non-residents and non-citizens?

Proving your identity As an expat or non-UK national, proving your personal details is relatively straightforward. You may need a legal translation of your documents, and you'll have to provide your passport as photo ID. You might also need additional documents like your visa or proof of indefinite leave to remain.

Proving your income The challenge lies in proving your income and credit score without a UK bank account. Some lenders may accept personal bank statements from another country, but building up a credit history in the UK is essential. Keeping a UK bank account open and using it while living abroad can help establish your credit score.

Proving your address To get a mortgage, you need to show your current address. Council tax bills, utility bills, or credit card statements are typical documents used in the UK. You may also need to provide your address history for the past 2-3 years. If you've recently moved to the UK, not having these documents can be a hurdle.

Your age If you're planning to buy a property in the UK for retirement, take your time to research mortgage brokers who cater to people over 55. Lenders consider more risk as you approach retirement, so they'll want evidence that your pension can cover your mortgage payments. You may need a larger deposit or accept a shorter mortgage term.

While these may seem like barriers, it's important to remember that you don't have to go through the process alone. A mortgage advisor or broker, like Ape Finance, can assist you in finding deals that suit your situation.

Now, let's explore some FAQs about the mortgage process in the UK.

What kinds of mortgages are available in the UK? In the UK, you'll find various mortgage types for residential properties, second homes, buy-to-let properties, and commercial properties. The most common ones include:

  • Interest-only mortgages: You only pay the interest during the mortgage term and repay the loan amount at the end.

  • Repayment mortgages: You steadily pay back your mortgage loan through monthly instalments.

    • Fixed-rate mortgages: The interest rate remains the same for a set number of years.

    • Variable rate mortgages: The interest rate can change based on the lender's standard rate or the Bank of England's base rate.

    • Flexible mortgages: Allows you to overpay or underpay without hefty fees.

    • Offset mortgages: Use your savings to reduce the interest you pay each month.

What size of deposit can you expect to pay in the UK? When buying a property in the UK, you typically need to pay a minimum deposit of 5%. A deposit of 10% is more common. House prices in the UK are rising, and the average is around £265,668. So, you can expect a deposit of at least £26,600. Remember, putting down a larger deposit, ideally 30%, can give you access to better mortgage deals with lower interest rates.

What additional taxes apply in the UK? In the UK, there are additional taxes to consider:

  • Stamp Duty Land Tax: This tax is paid after buying a property and varies based on the property value and circumstances.

  • Capital Gains Tax: You may have to pay this tax on the profit made from selling a previous property.

  • Additional taxes on buy-to-let properties: If you're buying a property to rent out, you'll have to pay tax on the rental income.

The mortgage process in the UK If you're a first-time buyer in the UK, your journey will likely follow these steps:

  1. Gather your deposit and necessary documents to prove your identity, income, and credit score.

  2. Speak with mortgage lenders or brokers, such as Ape Finance, to determine what you can borrow. Getting a Mortgage in Principle (MIP) certificate shows you're serious about buying.

  3. Make an offer on a property and have it accepted.

  4. Submit a formal mortgage application and provide all required documents.

  5. Go through conveyancing, where checks are carried out on the property to ensure there are no issues.

  6. Exchange contracts with the seller and pay for the house.

  7. Wait for completion day when the house becomes yours and you receive the keys.

The mortgage process typically takes around 3 months, but it's wise to plan for 6 months to account for any delays or issues.

Using a mortgage broker, like Ape Finance, is highly recommended, especially if you live outside the UK. They can guide you through the process, provide advice, and help you find the best mortgage deal for your situation.

Now that you're armed with this information, you're ready to start your mortgage journey in the UK. Happy house hunting!


Ape head mortgage advisor
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