Credit Score Basics > How many checks do you need for a mortgage application?

How many checks do you need for a mortgage application?

Wollit Team3 minute read · Updated 1st July 2024

To apply for a mortgage in the UK, you usually need to show several documents and go through a series of checks. These checks are run by lenders to figure out your creditworthiness and financial stability.

Here is the full list of what you need to go through.

Which documents do I need for a mortgage application?

The documents you’ll need for a mortgage application are:

Proof of identity: a passport, driving licence, or other government-issued ID is usually required.
Proof of address: recent utility bills, council tax bills, or bank statements dated within the last three months are usually sufficient.
Evidence of deposit: If the deposit is from savings, you will need to provide bank statements. If it is a gift, you will need to provide a signed letter from the donor and possibly bank statements from the donor's account.
Proof of income: Recent payslips and bank statements are required to verify your income. For self-employed people, additional documents such as certified accounts, SA302 forms, and business bank statements are also needed.
Proof of expenses: Lenders will also want to see your current financial commitments to make sure that you can actually afford the mortgage repayments.

What kind of credit checks do I need to go through for a mortgage application?

During a mortgage application you will go through two credit checks:

A “soft credit check”: This is a preliminary check that does not affect your credit score.Soft checks are not visible on your credit report and do not impact your credit score at all. Lenders will perform a soft or hard credit check to determine how much they are willing to lend you. If approved, you’ll receive a Mortgage in Principle. This document is not a guarantee but provides an indication of the loan amount, which you can then take to the sellers to show that you are a serious buyer.
And a “hard credit check”: This is a more detailed check that leaves a footprint on your credit report. It is usually run when you apply for a mortgage and is used to assess your credit history, how you’ve dealt with debt in the past, and whether you have recently made other loan applications. Hard checks can affect your credit score and are visible on your credit report for 24 months.

You should also keep in mind that, if you’re applying for a joint mortgage with someone, everyone involved will have to go through these credit checks.

Finally, you don’t need to download a credit report, print it out, or anything like that. Once you give your permission during the application process, the lender will contact one of the credit reference agencies (Experian, Equifax, or TransUnion) either directly or through a specialised company.

What other checks do I need to go through?

Besides verifying your identity, income, and credit history, lenders will also want to know that you are actually eligible to live in your new home.

This means that they will ask for proof of your right to live and work in the UK:

If you’re from Ireland or the UK, then you don’t need to do anything beyond showing your passport or ID.
If you’re not from the UK or Ireland, then you will need to have at least 12 months of continuous employment in the UK, have indefinite leave to remain, or have 12 months left on your visa. You must also have your salary paid in sterling into a UK bank account and have been legally resident in the UK for at least 3 years.
If you do not have indefinite leave to remain, your mortgage application must meet specific criteria, including a maximum Loan to Value (LTV) of 75%, a minimum 25% deposit from own resources, and not being for an equity share property.

Is there a minimum credit score needed for a mortgage in the UK?

No, there is no minimum credit score needed to secure a mortgage in the UK. Different lenders have different criteria, and work with different credit reference agencies.

However, your credit score does have a big impact on your mortgage application:

If your credit score is under the “Fair” band, expect to be refused by most banks. Even if you get approved, it might be on very restrictive terms, with low loan-to-value ratios, high deposit requirements, and very high interest rates.
Even a small increase in interest rates can have a huge impact when considering the length of a mortgage agreement and the amounts involved. For example, if you take a typical 30-year mortgage for a £500,000 property with a £100,000 deposit, a 1% increase in your mortgage rate will result in overpaying more than £90,000 over the life of the loan.

This is why it’s so important to work on your credit score before applying for a mortgage.

The good news is that now there are many apps that can help you build and improve credit.

One such app is Wollit. Wollit is an app available both on Android and iOS, and it works by reporting a fixed-fee monthly subscription as a loan repayment to all three credit reference agencies. This helps you build your credit history and directly influences your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report that shows lenders that you’re reliable and pay your bills on time, helping you make the most of your rent while you prepare to become a homeowner.