1. What is my real budget, not just my maximum loan?
Your real budget is the price you can comfortably afford once every cost is included, not the largest loan a lender will offer. Start with your deposit and savings, then subtract stamp duty, legal fees, a survey, moving costs and a cash buffer for emergencies.
Most lenders lend around 4 to 4.5 times income, and some go higher for certain borrowers. But the maximum is not always sensible. Work out a monthly payment you are happy with, and check it still works if rates are higher when your first deal ends. Our borrowing calculator gives a quick starting point.
Remember that lenders look at your regular commitments, such as loans, car finance, credit cards and childcare. Reducing these before you apply may increase what you can borrow. Agree the budget with anyone buying with you, so you both know your limit before you start bidding.
2. Why get a mortgage in principle first?
A mortgage in principle (MIP), also called an agreement in principle, is a lender's indication of how much it may lend you. Many estate agents ask for one before they take your offer seriously. It shows you have checked your borrowing and are ready to proceed.
An MIP is not a guarantee of a mortgage. The lender will still check your documents, credit file and the property before making a formal offer. Some MIPs involve a hard credit search. It is worth getting one through a broker who knows which lender is likely to suit you. Read more in our mortgage in principle guide.
3. Can I prove where my deposit comes from?
Lenders and solicitors must check the source of your deposit under anti-money laundering rules. Expect to show bank statements covering several months, and an explanation for any large deposits into your account.
- Savings: statements showing the money building up over time.
- Gifts: a signed gifted deposit letter, and often ID and bank statements from the person giving it.
- Sale of a property or shares: completion statements or broker contract notes.
- Money from abroad: clear evidence of the original source and the transfer trail.
Gathering this early avoids delays later. Our mortgage documents checklist lists what most lenders ask for.
4. How much stamp duty will I pay?
In England and Northern Ireland, home movers pay no stamp duty on the first £125,000, then 2%, 5%, 10% and 12% on higher bands. First-time buyers may pay less. Buying an additional property usually adds a 5% surcharge, and non-UK residents pay an extra 2%.
Scotland and Wales have their own taxes and bands. Stamp duty must be paid within 14 days of completion, usually through your solicitor. It cannot normally be added to the mortgage, so it needs to come from your savings. Use our stamp duty calculator to check your figure.
5. Have I chosen a solicitor and a survey?
Instruct a conveyancing solicitor as soon as your offer is accepted, so it helps to choose one beforehand. Check they are on your likely lender's panel, as lenders only work with approved firms. Ask for a fixed fee quote that lists searches and disbursements.
The lender's valuation is for the lender, not you. A separate survey tells you about the property's condition. A RICS Level 2 survey suits most conventional homes. A Level 3 building survey is better for older, larger or altered properties. Findings may help you renegotiate the price.
6. Is my credit file in good shape?
Check your credit reports with all three main agencies before you apply. Make sure you are on the electoral roll, your addresses are correct and old accounts are closed if you no longer use them. Correct any errors well before a lender looks.
Avoid applying for new credit, such as car finance or a new credit card, in the months before your mortgage application. New borrowing can reduce how much a lender will offer, and several recent searches may concern some lenders.
7. What happens after my offer is accepted?
Once your offer is accepted, your broker submits the full mortgage application and the lender arranges a valuation. If everything checks out, the lender issues a formal mortgage offer. Your solicitor then completes searches, raises enquiries and prepares for exchange of contracts.
At exchange you usually pay a deposit and the purchase becomes legally binding. It is wise to have buildings insurance in place from exchange, and to think about life insurance to protect the new mortgage. Completion follows, when the money moves and you get the keys. OMB compares lenders across the market and keeps the application moving, from first conversation to completion. See our residential mortgage page for how we help.
Residential purchase mortgagesMortgages for buying your next home, from first flats to family houses and prime London property.
Explore residential purchaseFrequently asked questions
Should I get a mortgage in principle before viewing houses?
It helps to get one before you start making offers, rather than before every viewing. A mortgage in principle tells you roughly what a lender may lend and shows agents you are a serious buyer. It typically lasts 30 to 90 days, depending on the lender, so time it with your search.
How much deposit do I need to buy a home?
Some lenders accept a 5% deposit, but larger deposits usually unlock a wider choice of lenders and better terms. Common loan-to-value bands are 60%, 75%, 85%, 90% and 95%. Larger loans often need a bigger deposit. Remember to keep extra savings for stamp duty, fees and moving costs.
Does making an offer affect my credit score?
No. Making an offer on a property does not involve a credit check. Your credit file is checked when you get a mortgage in principle with a hard search, and again at full application. Ask your broker whether a lender uses a soft or hard search before you proceed.
Can I change lenders after my offer is accepted?
Yes, you can usually apply to a different lender than the one that gave your mortgage in principle. The new lender will carry out its own checks and valuation, which can take time. A broker can help you choose the most suitable lender from the start to avoid switching later.
Is a mortgage offer guaranteed once I have a mortgage in principle?
No. A mortgage in principle is an indication, not a commitment. The lender still checks your documents, credit history and the property valuation. Changes in your income, new debts or a low valuation can affect the final offer. Telling your broker about any changes early helps avoid surprises.
What fees should I budget for when buying a home?
Typical costs include stamp duty, conveyancing and search fees, a survey, any lender product fee, a broker fee if charged, and removal costs. You may also need buildings insurance from exchange. Leaseholds can bring extra costs such as service charges and ground rent. Keep a buffer for the unexpected.
Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.