Mortgage Eligibility: Everything You Need to Know - NerdWallet UK (2024)

Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.

Applying for a mortgage is a big financial commitment and you’ll need to tick a few boxes to be eligible for one. Lenders have different mortgage eligibility criteria, which you must get your head around before applying.

Whether you’re a first-time buyer or looking to buy your next home, we explain everything you need to know about mortgage eligibility and what documents you’ll have to show lenders to improve your chances of getting a loan.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Am I eligible for a mortgage?

Each mortgage lender has its own set of rules for assessing mortgage applications. These rules are often called ‘mortgage eligibility criteria’.

Although the requirements for lenders can vary, most will look at the following things when you apply for a mortgage:

• Age: Most lenders have a minimum age requirement for a mortgage and a maximum age that they will lend to.
• Income: Any wages, pensions, investments, bonuses, commission, benefits or maintenance payments that you receive.
• Spending: Essential expenses, such as food, travel and childcare, and non-essential spending, such as holidays and leisure activities.
• Debt: Financial commitments, such as credit card, car finance, overdraft, loan, or buy now, pay later repayments.
• Deposit: How much you have saved to put down as a lump sum.
• Employment status: Whether you are employed full-time, part-time, self-employed, unemployed, or retired.
• Credit history: This includes your credit score and whether you have any county court judgments (CCJs), individual voluntary arrangements (IVAs) or have declared bankruptcy.

It’s worth noting that some lenders adapt their mortgages for teachers, offering flexibility over some of the criteria to try to make it easier for education professionals to get a mortgage. In a similar vein, you won’t find specific ‘NHS mortgages’, but there are certain lenders that offer mortgages with features that may help NHS workers who perhaps start off on low pay, or have complicated pay structures. If you’re not in permanent employment, and perhaps have a fixed-term or zero-hour contract, a fixed-term contract mortgage might still be an option.

Before applying for a mortgage you should get a mortgage in principle from a lender. This will give you an indication as to whether you may qualify for a mortgage and how much you may be able to borrow.

» MORE:What is a mortgage in principle?

What documents do I need to show to prove mortgage eligibility?

When you apply for a mortgage, a lender will ask for documents to prove and support the information that you give in your application and that you meet their eligibility criteria. The types of documents you’ll need to supply may differ depending on the mortgage provider, and your circ*mstances, but most will request a minimum of the following:

• Proof of ID: You’ll need to provide legal documents, for example, a current passport or a full UK driving licence photocard, so that a lender can verify your identity.
• Proof of income: Lenders will ask for bank statements and payslips to show evidence of any income from employment, benefits or other payments.
• Tax forms: If you’re self-employed you’ll need to provide tax forms and your self-assessment tax returns (SA302) from the last two or three years along with business bank statements to prove your earnings.
• Proof of deposit: You’ll need to show evidence of your deposit with bank statements or savings account statements. Lenders may ask you to complete a form if you use a gifted deposit.
• Household bills: Mortgage providers ask for recent bills, such as energy, water or council tax, to prove your address.

Mortgage affordability checks

In 2014, the Financial Conduct Authority (FCA) introduced new rules to protect borrowers against poor mortgage lending practices. The new rules mean lenders have to carry out more extensive mortgage affordability checks before approving a loan.

These checks were designed to ensure that borrowers can comfortably afford mortgage repayments now, and in the future. Lenders will look at your income, outgoing and existing debt repayments to build a picture of how much you can afford to commit to mortgage repayments each month. Lenders conduct a hard credit check to see your track record for paying off debt as well.

Many mortgage providers also conduct a ‘stress test’ to check whether you’ll be able to keep up with repayments in the future should circ*mstances change – for example, if interest rates increased or if you decided to start a family.

How long does it take for a mortgage application to be approved?

It can take between two to six weeks for a mortgage application to be approved. However, this can vary depending on the lender and complexity of your personal circ*mstances. Ensuring that you supply the correct documents on time for your application can help avoid any hold-ups with eligibility and affordability checks.

How to compare mortgage deals

It’s always worth using a mortgage repayment calculator to get a rough idea of how much you will be able to borrow before you start to look for the best mortgage lenders and deals. Once you have an estimated loan amount, you can start shopping around for the best offers for you.

If you are buying your first home or would like some support during the mortgage process, hiring a mortgage adviser or mortgage broker can help. They tend to have access to deals from a wider range of lenders, which can help them find the most suitable mortgage for your circ*mstances.

» MORE:Check the latest mortgage rates