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How long does a mortgage application take?

by | Mar 16, 2023

Home $ How to buy a property $ A Guide On House Mortgages $ How long does a mortgage application take?

Obtaining a mortgage is an important step in the home-buying process. It’s important to understand how long it will take to get your mortgage approved so you can plan your move accordingly. 

The process can take two to six weeks, depending on a variety of factors such as your credit score, the results of a mortgage valuation assessment, your income, an affordability review, and the size of your deposit.

So, it is vital you read on for the details on how this works so you don’t end up taking a large amount of time to complete your mortgage application or doing things wrong so that you break the law.

It is best to be prepared and know what to expect and potentially use a mortgage broker if you’re not sure. You can read our article on if you should use a mortgage broker if you want to find out more.

a mortgage application taking too long

What exactly is a mortgage approval?

You’ll need to go through the mortgage approval process with a lender if you want to buy a house. This means that the lender will look over your financial situation to see if you can afford to make mortgage payments.

The lender will estimate how much you can afford to borrow, what interest rate is appropriate for you, and how much your mortgage payments will be during the mortgage approval process. 

All of this is done to ensure that you can afford the mortgage payments and will not face financial difficulties in the future. It’s an important step in the home-buying process, so you should know what’s involved and what to expect.

How long does a mortgage approval take?

Obtaining a mortgage may appear to be a lengthy and complicated process, but it does not have to be that hard and in general most people are able to obtain one relatively quickly

The first step is to obtain an agreement in principle from your lender, which usually takes only a few minutes to 24 hours. This decision is based on your personal and financial information, as well as what you want in a mortgage.

Once you’ve made a preliminary decision, the next step is to obtain a full mortgage offer, which can take anywhere from 5 to 30 days but it is important to keep in mind that this timeframe is subject to change based on your specific circumstances.

Simple mortgages are usually processed faster, whereas more complex situations may take longer and this timeline only refers to the time it takes to process your mortgage application, not the time it takes to complete your property. 

So, in reality, by the time the home is actually sold, it could be weeks or months after the mortgage application process is over.

If you want to speed up the process and expedite it, consider working with a mortgage broker. They have access to a broader range of mortgage products and can assist you in finding the best solution for you.

Why does a mortgage application take a long time? 

Have you ever wondered why it takes so long to get a mortgage? It can be aggravating, but there’s a good reason for it. Partly due to the fact that the mortgage approval process is divided into two stages.

First, you must obtain an in-principle decision from your lender. This step typically takes between a few minutes and 24 hours and is based on basic personal, income, and credit information. The lender will also consider what you are looking for in a mortgage.

This means they have to check out your credit history and make sure they are making the right decision to give you an agreement in principle.

Once they’ve made a preliminary decision to offer you a mortgage in principle (which is done with a soft credit check), the next step is to obtain a full mortgage offer and this can take anywhere from 5 to 30 days.

During this process the lender has to verify a lot of information, collect all of the relevant paperwork from you and then make the decision to lend money. Depending on your specific situation, remember that simpler mortgages are typically processed faster than more complex ones.

a mortgage application that is process fast

However, either way, the decision to lend a mortgage which is usually in the region of hundred of thousands of pounds if not more is very big so the lender wants to be sure they can trust you to pay back the loan.

Factors like using the lender before perhaps for the purchase of a second investment buy to let property rather than a 95% mortgage which requires you to submit an application for the first time could speed up the process too.

What is a mortgage in principle?

If you’ve heard of phrases like “mortgage in principle,” “agreement in principle,” “mortgage capacity report,” or “mortgage promise” before, it is useful to know that they all refer to the exact same thing. 

It can be confusing because they all refer to the same thing but all it really means is an official projection of the amount of money that a mortgage lender is willing to lend you. 

Simply put, if you are granted a mortgage in principle, it means that the lender believes you are eligible for a mortgage if you apply for one so you can have the peace of mind to make offers on property knowing you may be be eligible for the finance.

This is usually the very first step that someone takes and is also critical because many sellers and estate agents will not take you seriously as a buyer if you’re not presenting a mortgage in principle alongside your offer.

It’s best to figure this out before you start looking for a house and while you have the principle also act with a fair bit of speed when making offers as the document is only official for around 60 to 90 days. 

If you don’t find a home within that time frame, you’ll have to reapply, which can be inconvenient and you may be left with a different amount of loan if the interest rates change or your personal circumstances differ.

Why bother with a mortgage in principle?

You may be wondering why bother with a mortgage in principle when you can apply for one right away but there are two main reasons for doing so. 

First of all, for those who have a mortgage they want to take out, in order to do so they will have to go through an extensive credit check and an intrusive background search that can take a while.

A mortgage in principle is a quicker check that doesn’t take that long and will be over in a maximum of one day. So, the first reason is to save time.

Secondly, whenever a full mortgage application takes place, there will undoubtedly have to be a hard credit check which is where there is a report on your credit history that shows you have taken out a loan.

If you have a lot of these checks in a short period of time as you apply to a lot of mortgages to see what you’re eligible for, your credit score may become damaged. An agreement in principle is not a hard check so doesn’t do this.

a bad mortgage application because of a bad credit score

How long does a mortgage in principle take?

A mortgage in principle takes anywhere from being an instant check you can do only to take a day or two to process so is an extremely quick procedure. Click here for an example of a sign up form.

What is a mortgage offer?

The following steps guide you through converting your mortgage in principle into a formal mortgage offer.

Don’t worry, while it may appear intimidating, your lender is already pleased with what they’ve seen so far, you just have to prove all of what you’ve submitted to be true. A

The bank or lender is basically saying that you have all the right information and the income you have is sufficient but they need to do some background checks to make sure what you’re saying is right and that your income is correct so they can give you the money.

There’s always the chance that they’ll find new information that they don’t like, which will result in your application being rejected, so keep your fingers crossed and save the celebrations for later if you’re in the process of approval.

However, this doesn’t happen very often as the vast majority of agreements in principle produce full mortgage approvals.

What is the timeline for a mortgage?

If you’re thinking about buying a home and need a mortgage, you may be wondering how long the mortgage application process will take so to make things easier, we’ve divided the process into a few simple steps.

Beginning with obtaining a mortgage in principle, this is a process that is extremely quick and simple, taking only a few days if you have all of the necessary documents on hand. 

Sometimes, this could take even quicker if you can apply online or use a mortgage broker to assist you in the process of applying for a mortgage, whether it be for remortgaging or for a residential mortgage.

Before granting you a mortgage in principle, the lender will need to see proof of income, your expenses and outgoings, information about any other loans you have, and your previous addresses. Once you have your mortgage in principle, it usually lasts between 60 and 90 days, so find a house to buy during this time so you don’t have to reapply.

Once you’ve found a home you like and had your offer accepted, you can submit an application to convert your mortgage in principle into a formal mortgage offer. This may appear to be the most frightening part, but don’t be too concerned.

Your lender already knows a little bit about you and was impressed by what they saw; after all, they already approved you for a mortgage in principle.

However, keep in mind that your lender will conduct additional checks when you submit your application, so there is always the possibility that they will discover new information that they do not like.

How long does it take to do a mortgage valuation?

Specifically looking at the length of time it takes to do a mortgage valuation, there are a few things you should know if you’re wondering how long it takes.

The length of time it takes can vary depending on how the valuation is performed. Previously, a surveyor would need to visit the property and conduct a thorough inspection in order to determine its value.

There are other options available nowadays, such as a “drive by” valuation or an automated valuation model (AVM) performed online.

Typically, the results of a mortgage valuation are delivered within two weeks but this can vary depending on the extent of the investigation. 

So, depending on the valuation method and the valuer’s workload, you may have to wait a little longer or get the news sooner.

working out how long it takes to get a mortgage application

How long does a mortgage offer take?

When it comes to getting a mortgage offer, there is no set time frame. However, most people should expect to wait 2 to 4 weeks from the time they submit their mortgage application until they receive a mortgage offer. 

Of course, this assumes that the process goes smoothly and that your application is straightforward as it could be the case a lender finds a property isn’t unencumbered and they cannot offer a loan.

How long does it take to exchange contracts?

The exchange of contracts on your new home should be a historic occasion and a significant milestone in your home-buying journey but not many people actually know what a contract exchange is.

Simply put, it is the signing of identical contracts by the buyer and seller agreeing to the sale of the property. This procedure legally binds the sale and allows you to begin planning your new life in your new home. 

Here, things like if there is a guarantor for the mortgage or there is the option to pay off a mortgage early should all be considered before you go ahead with anything.

How long does the completion of a mortgage take?

If you’re in the market for a home, you might be wondering how long it takes to exchange contracts after making an offer or what time of day the exchange occurs. 

Contracts are typically exchanged seven to 28 days before the completion date, depending on the size of the chain. On a weekday, the exchange usually takes place around midday but In rare cases, you may be able to exchange and complete on the same day. 

You may have to wait longer between exchanging and completing if someone in the chain hasn’t found a buyer yet as you should keep in mind that most mortgage offers are only valid for up to six months, so the wait for a buyer can’t be longer than that.

How long does a mortgage application take to be approved by a lender?

Mortgage lenders are not all the same, and some may take longer to process your application than others. To help you with this decision, here is some data to give you an idea of how long it might take for your mortgage application to be approved.

Halifax usually takes anywhere from 4 to 6 weeks, compared to 2 weeks prior to the pandemic and Santander, on average, processes an application for approval within 21 working days.

Another bigger bank, Natwest, has a current wait time that is approximately 22 working days, or approximately 4 and a half weeks.

All in all, it seems as though most banks process an application in a  minimum of four weeks as HSBC also has an average around this figure.

How can you speed up a mortgage application?

There are a few ways to speed things up if you think that the length of time it takes for a mortgage application to be approved is too long. First of all, we recommend working with an independent mortgage broker. 

These experts are lifesavers because they know which lenders are most likely to approve your application and can secure the best deals for you so you won’t have to waste time shopping around.

In addition, ensuring you have all the correct documents is a good idea as if you have to apply for them this could add a delay to the application process.

someone trying to speed up a mortgage application

In conclusion

To conclude, there is a lot that a lender can do in the process of a mortgage application to speed things up and it is also important to distinguish between a mortgage in principle and a normal mortgage application.

As a result, how long a mortgage application takes can vary quite a bit so it is important to understand the topic before trying to come up with a figure. However, all in all a mortgage application will usually take around four weeks.

FAQ

How can you predict if your mortgage will be approved?

You can predict if your mortgage will be approved by assessing factors such as your credit score, income stability, debt-to-income ratio, down payment, and employment history, while also considering the specific lending criteria of the mortgage provider. However, a mortgage lender will make the decision that matters so it is best you wait for this and only submit an application if you think you have a good chance of approval

How long does a mortgage offer take after valuation?

A mortgage valuation usually takes around a week from submitting the application to receiving the outcome

Can a mortgage be declined after offer?

A mortgage can be declined after offer if the lender finds that you were lying about personal details. However, this is very rare as background checks are very thorough

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donnell-bailey

Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.

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