How Long Does a Mortgage Application Take?

The process of buying a house can take a long time but the mortgage application process is a relatively quick section of it if there are no major complications. The length of time to process a mortgage application can vary depending on lots of different factors but typically, it will take between 4-6 weeks. 

In this article we look at how long each element of the mortgage application process should take and what is involved at each stage. We also explain some of the actions you can take to speed the process up and get the keys to your dream property faster.

Short for time? Here’s a quick video overview of the mortgage process.

The mortgage application timeline:

Researching lenders and mortgage types

The first step to the mortgage application process should be completing your research to find the right mortgage product for your circumstances. You should understand the difference between interest-only and a repayment mortgage, as well as the types of mortgage, such as fixed rate and variable.

To find the mortgages with the best interest rates, you may want to first talk to a broker to get some advice on the available mortgages and which is most suitable, taking into account factors such as income, deposit amount and credit history. It is really important that you do not rush into applying for a mortgage, as even a small difference in interest rate could end up costing you a considerable amount more over the term length.

Additionally, if you select a mortgage that has an early repayment charge, you should try to make sure it is not a high charge, just in case your circumstances change and you needed to sell the property for some reason. You may be able to port your existing mortgage to a new property if you do decide to move within your product period, in order to avoid early repayment charges, but you would be required to stay with your existing lender’s mortgage products.

Once you have completed research regarding the mortgage products that are available and chosen which product is the best one for your situation, you would usually request a mortgage in principle.

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Mortgage in Principle

For most people, the mortgage application process will begin with requesting a mortgage in principle, which is a written statement from a lender indicating how much they will lend you, in principle.

This will give you an idea of what value of property you will be able to get a mortgage for and you can show estate agents and sellers that you are able to get a mortgage for the amount required to buy their house, which can give you an advantage over other potential buyers. It can also speed up the application process, as you provide all the documents at the start of the process, before you even submit the actual mortgage application.

Obtaining a mortgage in principle is a quick process, as the lender will only run some basic checks at this stage. If you have all of the required documents ready such as your passport, up to six months of bank statements and proof of income, you can have a mortgage in principle as soon as you go through the details with your mortgage broker.

A mortgage in principle is not a guarantee of being able to borrow the amount stated, as an issue such as poor credit history or income not matching the information provided, could reduce the amount they would be prepared to lend.

Completing the application

Filling in the application form should not take very long, usually just a few hours, provided that you have all of the information that you need to provide. If you use a mortgage broker, they will usually speed up the application process for you, helping you to submit the required documents and completing a lot of the administrative tasks on your behalf.

What evidence you will need to provide:

The lender will often require you to provide the following information and documents:

  • Details of the property you have put an offer in for. This will include information regarding the seller’s estate agent and the proof of your deposit.
  • Valid ID and proof of your current address (usually needs to be a utility bill dated in the last three months or similar).
  • Three months of bank statements.
  • Up to six months of payslips, so that you can evidence your income, which should include payments for bonuses, overtime and any additional financial benefits you receive from your employer. If you are self-employed, instead of providing payslips, lenders will usually ask for your last 2 years of Tax Calculations & Tax Year Overview documents through HMRC.

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Other requirements:

Credit check 

As part of the application, the lender will perform a comprehensive credit check. If you already obtained a mortgage in principle, the lender would have  already completed either a soft or hard credit check against your credit file.

If there are any credit details that the lender was not aware of, such as missed payments and any other adverse credit, this could result in the decline of your mortgage application. However, there is a wide range of different mortgage products available on the market, so you could still obtain a different mortgage if you are declined with one lender, but you may need to pay more interest.

Property valuation

Before a mortgage lender will approve a mortgage, they will require a valuation of the property to be undertaken. This allows them to check that the property is valued at the amount that you are borrowing, to protect them against losing money. 

For example, if they lend you £200,000 and the property is worth £180,000, there would be negative equity, and if you defaulted on the mortgage, the lender would probably not be able to sell the property for the value they loaned to the borrower.

If the lender is happy with all of the documentation provided, the credit checks and the valuation, then they will go ahead and approve the mortgage. In some cases, they may offer less money or in some cases more, than they stated in the mortgage in principle, once all of the details are received.

How long does it take to get a valuation done?

As mentioned, a valuation will be required by the lender before they would be willing to lend any money. This is not the same as a survey, as the valuation only involves the determination of the value of the property and is not a detailed assessment of the property condition.

The valuation will be completed by someone appointed by the lender and the buyer may be required to pay for the valuation to be completed, or it could be included in the mortgage services. Generally, the valuation can be booked in very quickly (from about two days to a week) but this would depend on the schedule of the professional surveyor who works in the area that the property is located. The valuation itself can be done in less than half an hour, depending on the size of the property.

The property survey on the other hand, can take much longer and includes a thorough assessment of the property condition but this would be completed after the mortgage application has been processed and approved.

How long does it take between a mortgage valuation and offer?

Usually, once the mortgage valuation has been completed, the offer will shortly follow. How long this takes will depend on how quickly the surveyor processes and submits the details of the valuation to the lender. Again, this could take just a few hours, but it could take them a few days if they have a busy schedule.

The next dependency is how long it takes the lenders to process the valuation information and progress the last part of the application, which will usually be to provide the offer to the applicant, providing that they are happy with the valuation. If the mortgage processing team is particularly busy, this could take longer than usual.

Typically, it will take somewhere between 2 and 20 days for the offer to be received by the mortgage applicant once the valuation has been completed.

How long does it take to exchange contracts?

Once the mortgage application has been accepted, there is a lot of work that will need to be completed by the solicitors. They will be required to review the draft contract and discuss any concerns they have with the sellers’ solicitors.

Before the exchanging of the contracts, a large number of conveyancing searches will need to take place and this can take some time. 

In some cases, the searches can all be completed in just a few weeks, but it can take much longer if there are any complications. Conveyancing searches include:

  • Local authority searches
  • Land registry searches
  • Environmental searches
  • Water authority searches
  • Chancel repair searches
  • Location specific searches.

If any problems are discovered in these searches, then this can impact whether the property sale goes through, or it may cause delays if more information and further checks are required. 

The searches can identify issues that could mean the property will be difficult to sell at a later date, for example, if it is an area that is at high risk of flooding, or if the property is built in an area that was formerly used for mining.

Often, it is these conveyancing searches that tend to hold up the date for the exchange of contracts, but an efficient solicitor will work with reliable third-party companies and will keep chasing them until they receive all of the searches back.

Once all of the searches have been completed and the buyer’s solicitor is happy with the results, they will inform the buyer and agree on a completion date with the seller. 

The solicitor will need to ensure that the financial arrangements are in place, such as payment of the deposit, which will be made into the solicitor’s account, ready for them to transfer it to the seller’s solicitor, who will then transfer it to the seller on the completion day. 

The full process from mortgage offer to exchanging contracts will usually be up to two months.

How long does completion take?

If you can easily agree a completion date that suits both parties, then the actual completion should be straightforward and is usually within one week to three weeks of the exchange of contracts.

On the completion day, the solicitor will confirm when the payment transactions have been made and the estate agent will provide the buyer with their keys.

After the completion, there will still be some outstanding tasks such as paying stamp duty and sending a copy of the title deeds to the mortgage lender. Once they have completed this work, the solicitor will send their final bill.

How long does a mortgage offer last?

Any delays in the time between receiving the mortgage offer and completing the property purchase could potentially lead to the mortgage offer expiring, which is why it is so important to use a solicitor who will be efficient.

The length of time that a mortgage offer lasts will vary from one lender to the next but typically, the mortgage offer will last for six months.

How using a broker can speed up the process

Using a mortgage broker can speed up every aspect of your mortgage application and completion process. One of the key benefits of using an experienced mortgage broker is that they will be able to help you to find the type of mortgages that you are likely to be approved for. 

This will save time applying for a mortgage that you ultimately get declined for and as well as missing out on a property, a declined mortgage application can harm your credit rating.  

When you use a mortgage broker, they can also speed up a lot of the administration work that is required, as they can use their experience and knowledge to ensure that the applicant has all of the necessary documentation ready as quickly as possible.

A mortgage broker will know the requirements for each lender and will be able to explain to the applicant which documents will be required, such as how many payslips, bank account statements etc. they will request. This will help to speed the mortgage application up, rather than waiting for the lender to contact the applicant to request the evidence.

Another way that a mortgage broker is able to speed up the process is by communicating with the solicitor and helping to chase up any outstanding conveyancing. Many mortgage brokers will even be able to pre-empt some conveyancing issues such as local area searches, as they have worked with other applicants in the same area.

Boon Brokers is a whole-of-market, fee-free, brokerage that has access to every mortgage on the market and can help you to find the right mortgage for your needs. Our experienced mortgage team offers impartial advice and can help to make sure that the mortgage application process goes as smoothly and as quickly as possible.

Contact us today to discuss your mortgage needs.

 

Gerard BoonB.A. (Hons), CeMAP, CeRER

Gerard is a co-founder and partner of Boon Brokers. Having studied many areas of financial services at the University of Leeds, and following completion of his CeMAP and CeRER qualifications, Gerard has acquired a vast knowledge of the mortgage, insurance and equity release industry.