You need to work out how much you can afford to borrow. Once you've done this, it is a good idea to apply for a mortgage early, so you can act quickly when you find a property you like.

If you feel you've been treated unfairly by a mortgage broker or lender, you could consider making a complaint.

How much will I need for a deposit?

It's best to be cautious about borrowing a very high percentage of the property's value, even if your lender says you can. You will normally have higher charges to pay if you do, and, if property prices fall in the future, you run a greater risk of getting into negative equity (where the property is worth less than what you still owe). Interest rates may also increase in the future, and this could leave you unable to afford the repayments.

In the current economic climate, many mortgage lenders are asking for deposits of between 20 to 30 per cent, particularly for first-time buyers. In some cases they may ask for even more.

When working out how much you can afford to put down as a deposit, don't overlook the other upfront costs of buying such as:

• solicitor's fees and legal expenses (using a solicitor approved by your lender may reduce these costs slightly as they can act for both you and the lender)
• an arrangement fee paid to the mortgage broker or lender (typically £200 to £1000)
• a mortgage indemnity guarantee (or premium), if you are borrowing 90 per cent or more of the purchase price - this covers the lender if you default on the loan and may cost several hundred pounds
• buildings insurance from the time you exchange contracts
• stamp duty
  
• moving costs.
  

How much can I borrow?

Anyone aged 18 or over can apply for a mortgage, though a lender will take your income and personal circumstances into account when deciding how much you can borrow:

• they will usually offer no more than two and a half or three times your annual income if you are buying on your own, and it may be less than this if you'll have high regular payments to make, such as maintenance payments or credit card debts
• a couple who are both earning will usually be able to borrow up to two and a half or three times the higher income plus one times the lower income
• be cautious and allow for the fact that interest rates may increase in the future when deciding if you'll be able to afford the payments
• take into account the fact that your income may decrease at some point in future - if you want to work part-time or start a family, for example.
  

If you're self-employed or have an irregular income, you will usually need to provide the lender with accounts for the last three years. You may need to find a specialist lender through a mortgage broker, and they will probably want a larger deposit than normal.

How long will I have to pay the mortgage back?

Most mortgages are for 25 years - this is called the 'term' of the mortgage. A shorter mortgage term will mean you pay less interest overall, but you will have higher monthly repayments.

Some lenders may insist on a shorter term than 25 years in some situations, for example, if the property is leasehold with less than 60 years left on the lease, or if you would reach retirement age before the end of the mortgage term. On the other hand, a lender may agree to a loan for longer than 25 years, providing this would not take you past retirement age.

What will happen when I apply?

You will need to complete an application form from your chosen lender, and provide details of your income, savings and outgoings, as well as your employer, bank and any previous mortgage or landlord.

The lender will usually also run checks with credit reference agencies for any history of bad debts or repossessions of previously owned property. You can check yourself what information the main credit reference agencies, Experian, Equifax and Callcredit hold on you - their websites give details of how to get a credit report for £2, either online or by post. Some of these agencies can provide credit reports instantly online. If you request a report by post, the agency must send it to you within seven days of receiving your request.

Based on your application, the lender may give you a mortgage certificate or other document stating in principle how much you can borrow. This can be useful if you need to show the seller that you are a serious buyer.

What happens when I find a property I want to buy?

When you have found the property you want, you must apply formally for a loan. Lenders will normally allow you to borrow up to 95 per cent of a property's value (this is sometimes called the loan to value ratio or LVR), although in most cases the amount you can borrow will be less than that. You will have to find the rest of the purchase price as a deposit.

Remember the 'value' is what the lender's valuer thinks the property is worth and this may be less than the asking price.

The lender will carry out a separate valuation of the property, and the amount you can borrow will be based on this. You will have to pay for the lender's valuation, though with some deals you may get this fee refunded once the mortgage has been arranged.

If the lender agrees to a loan, there may be conditions attached, like carrying out certain repairs or improvements within a specified period. The lender may withhold some of the loan until you have done this.

Some lenders imply that you must use one of their selected insurers for buildings insurance, but you should be able to insist on a different one if the premiums are cheaper. For leasehold properties, the freeholder usually arranges buildings insurance, but you will still have to pay a share of the premium (usually via service charges).

What if I'm selling one home to buy another?

When you sell one home and buy another, you don't necessarily have to start all over again with a new 25-year mortgage term. You can simply arrange for the mortgage on the new property to have the same mortgage term end date as on your previous home. This will be particularly useful if you have an endowment or ISA mortgage. Of course, if you borrow more, your monthly payments will also be larger.

If property prices have fallen since you bought your last home, there is a risk that selling it might not make enough to pay off the amount you owe the lender. This is called negative equity.

Will I have to pay arrangement fees?

Most mortgage lenders will charge arrangement fees (or 'mortgage application fees') for organising your mortgage. They are often between £200 and £1000. If you get a financial adviser to arrange your mortgage, most will operate on a commission basis which is paid by the mortgage lender. In certain circumstances you may also have to pay her/him a separate fee.