How Long Does A Mortgage Application Take?

Key Takeaways

• The mortgage application process can take between 2 and 6 weeks.
• Various stages involve document submission, property valuation, and legal work.
• Using a mortgage broker or advisor can streamline the mortgage application process.
• A poor credit history can potentially delay the mortgage approval process.
• Preparation and proactive communication are key to a smooth mortgage application process.

How Long Does It Take?

There is no ‘one size fits all’ time frame when getting a mortgage as it can vary depending on personal and financial circumstances.

Typically, in the UK, it takes 2 – 6 weeks to get a mortgage application approved. However, it can take longer if there are hiccups along the way, such as legal issues, the borrower’s credit record, or complexities along the property chain.

The good news is that compiling the required documentation – like the Agreement In Principle letter and bank statements – and submitting your mortgage application can take less than a day!

Here’s our 8-step guide to navigating the homeowners’ mortgage maze!

 

Mortgage Application Process Timeline

1. Finding a mortgage

• Time frame: ± 1 day

Finding the right mortgage deal that’s best suited to you and your pocket is very important. It can have an impact on the entire mortgage application timeline.

Knowing the intended property purchase price, seeking advice from estate agents and understanding which mortgage lender to go with streamlines the process.

For first-time buyers, we recommend using a mortgage broker as they will do the groundwork for you. They are often independent advisors and are not tied down to one mortgage firm (such as Llyod’s Bank, for example). They also have access to various mortgage deals on the UK property market to source the best deal for you.

Alternatively, you can opt for mortgage advice from mortgage advisors. Similarly to mortgage brokers, they source mortgage deals on your behalf. However, advisors are contracted to one mortgage lender. This means that they give mortgage advice from their affiliated company (i.e a single lender).

Here’s a quick look at the types of mortgages available:

• Fixed-rate
• Adjustable rate (or variable rate)
• Interest-only
• Shared ownership (government-backed scheme)
• Reverse or Equity Release (also known as Lifetime Mortgages)

Mortgage rates are based on the Bank of England (BoE)’s market, which currently stands at 5.25%. Fluctuations in the market can impact your mortgage repayments, especially if you opt for a variable-rate mortgage.

Understanding the complexities of mortgage loan agreements, loan terms, interest rates, and monthly payments is crucial when navigating the mortgage application process.

2. Getting a Mortgage In Principle

• Time frame: ±1 day

Next up, you’ll need to get a Mortgage In Principe or an Agreement In Principle document. This is a written letter that states how much a mortgage lender is willing to give you, based on factors like your credit rating. It’s relatively quick to get, as mortgage lenders just need confirmation of your income, which is followed by a credit check.

Note: This is not a mortgage agreement, it is just one piece of the mortgage puzzle that is needed if you want to get a mortgage.

Having an Agreement In Principle document ready, before approaching an estate agent, shows you are a serious buyer. It gives insight into how much cash you can borrow, which determines the property purchase price bracket you will fall into.

A good starting point would be to use a mortgage calculator for an estimate of the amount of money you are eligible for. However, this does not replace the Agreement In Principle document.

3. Putting your mortgage application together

• Time frame: 1 – 2 days

Once you have found a property you wish to purchase, and have your credit score and written Mortgage In Principle document on hand, you are on your way to filing your first mortgage application. You can do this from the same lender that gave your Mortgage In Principal paperwork, or you can use a new one.

Gathering your documentation can take time; being organised is the key to success here.

Here’s a list of what you will need:

• Bank statements (not older than three months)
• A list of all your current debts and debit orders (credit cards, car repayments, etc.)
• Proof of income (e.g. payslips), including bonuses and overtime
• Proof of tax returns (e.g. P60)
• Proof of funds available for the down payment (equivalent to a percentage of the property’s purchase value)
• Proof of identification (e.g. passport)
• Proof of current address (e.g. utility bill)
• Credit check report
• An appointed solicitor

If the down payment (deposit) is a gift, you will need a formal letter from that person, with copies of their ID and bank statements, confirming they are gifting the deposit to you. It must also state that they do not intend for you to repay the deposit gift.

What if I’m self-employed?

If you are self-employed, you will need to provide all the documentation from the above list, with the addition of:

• Three years of tax returns (e.g. SA302 tax calculations)
• Three years of tax year overviews
• Proof of business registration (i.e. Companies House)

Once you have gathered all your paperwork, you can proceed with the application and mortgage offer process.

4. Mortgage valuation survey

• Time frame: 2 – 7 days

Before having your mortgage approved, a property valuation and survey must be done. A property valuation can take anywhere between 2 and 7 days, or longer in some cases. On the other hand, a property survey could potentially take longer (sometimes weeks). A survey involves a thorough inspection of the house.

Most lenders will appoint a property evaluation expert to conduct the review and give their findings. This is to ensure that the property purchase price and the condition of the seller’s house are aligned.

For example: If you borrow £300,000 and the property is worth £280,000, there would be negative equity. This means, that should you default on your monthly instalments, the lender cannot sell the property for the value they borrowed you.

Once the lender is happy with the property survey and all accompanying documentation, they should approve the loan amount.

5. Applying for a mortgage agreement

• Time frame: 1 hour

You can now submit your official application. The time frame stated is a guideline to how long the submission will take; however, it doesn’t indicate the time frame for receiving the mortgage offer.

The submission is relatively quick if you have everything on hand. This is also where a mortgage broker can be beneficial to use as they can ensure the application is filled out correctly from the get-go.

Your lender will review your credit history through an ‘affordability assessment’ to evaluate your financial stability. In tandem with reviewing the mortgage valuation survey and your compiled documents, the lender will make a decision. You will also need to provide the lender with your solicitor’s details to ensure a smooth transition upon approval.

At this point, your role is to wait.

The lender will reach out to either you or your mortgage broker to communicate their decision.

6. Getting a formal mortgage offer

• Time frame: 2 – 4 weeks

How long does it take to get a mortgage offer accepted?

After submitting your application form, it can take 2 to 4 weeks to get a mortgage offer. Some lenders may request that a property evaluation be done during this stage instead, which could potentially ‘delay’ the application process.

Once the mortgage offer has been approved, the mortgage lender’s underwriter will provide a comprehensive insurance document, covering the loan amount details, etc.

During this stage of the mortgage application, your solicitor will need to review and draft the mortgage contracts. They will also discuss any concerns with the seller’s estate agent and/or the seller’s solicitor.

How long does a mortgage offer last?

If there are no hiccups in your mortgage application, a mortgage offer lasts six months. The expiry date will be on the mortgage approval letter. However, this can vary between different lenders.

But why is my mortgage application taking so long?

Mortgage applications can be delayed for various reasons, such as:

• A backlog in the system
• A complicated financial situation
• Having incorrect or not enough supporting documents
• A poor credit rating

If you are concerned about your mortgage application timeline, do not hesitate to contact your mortgage broker or lender. They will be able to give you insight into the application process and give you peace of mind.

7. Exchange contracts

• Time frame: A few weeks

Before exchanging contracts, the conveyancing process must take place. This is oftentimes a lengthy process and can take up to a few weeks to complete. It involves a number of conveyancing searches, such as:

• Local authority
• Land registry
• Environmental
• Water
• Location

If issues are found, it could impact whether or not your mortgage will be approved or if contracts will be exchanged. For example, issues relating to a risk of flooding can identify that the property may be harder to sell at a later stage.

Once the searches are complete and your solicitor is happy with the outcome, an agreed-upon completion date will be set with the seller. This will either be via the estate agents or through the seller directly.

8. Mortgage completion and release of mortgage funds

• Time frame: 3 – 7 days

Once your mortgage completion date is set, the end is near!

At this stage, your solicitor will receive the funds and then transfer the money to the seller’s solicitor. The seller’s solicitor will then forward the money directly to the seller by the agreed-upon completion date.

 

How Can I Speed Up The Mortgage Application Process?

1. Use a mortgage broker to do the groundwork for you and assist with your mortgage application submission.
2. Do your research beforehand (e.g. view potential properties prior to submission, etc).
3. Gather your documentation in advance (e.g. payslips, bank statements, credit score, etc).
4. Review various mortgage deals from several mortgage lenders to ensure you have chosen the best deal suited to you.
5. Address any financial concerns in a timely manner (e.g. pay off credit cards, etc).
6. Keep communication lines open with your mortgage broker and solicitor.

 

FAQs

Is an Agreement In Principle a guarantee for a mortgage?

No. Having an Agreement In Principle, or a Mortgage In Principle, document does not mean the mortgage is approved. It is just one of the many documents needed before you can apply for a mortgage. It states how much a mortgage lender is willing to lend to the borrower.

How long does it take to receive a mortgage offer in the UK?

A mortgage offer can take 2 to 4 weeks to be approved. Thereafter, the borrower and seller’s solicitors will draw up a mortgage contract and come to an agreement on when to exchange contracts. At this stage, with your mortgage approved – the lender is happy with your submission and has agreed to lend you the money.

How long does it take for a mortgage valuation to be done?

A mortgage valuation usually takes 2 to 7 days to complete. A property survey typically takes longer, as it is a more thorough inspection of the home. Most lenders will appoint an evaluation or survey expert to conduct the review; however, you can request an independent surveyor should you wish.

Can I get a UK mortgage with a bad credit history?

Having a bad credit history is trickier, as most lenders are reluctant to lend money that cannot be repaid. However, there are some lenders that may still give you a loan, after reviewing the severity of your credit issues. You will most likely need to pay a higher down deposit for the property if you want to get a mortgage.