How long does the mortgage process take?

Feb 12, 2018
How long does the mortgage process take?
When you’re excited about becoming a homeowner, you’ll want the process to be as smooth as possible. If you’re going to be applying for a mortgage, you’ll also want to know how long it will take to be approved.

What is a mortgage?

A mortgage is a loan used to purchase a home. You’ll have to put down a deposit and then make monthly payments. Depending on the mortgage you choose, the repayments cover the capital and interest for the term of the loan, typically 25 years. If you fail to make your payments, your home may be repossessed.

Applying for a mortgage

You can shop around and apply directly to a mortgage provider, or use a mortgage broker to find the best deal. You’ll be required to have a mortgage interview, either face-to-face or over the telephone. You also will need to fill in an application form and provide valid photo ID (although ID verification may be done electronically) and supporting documents such as bank statements, utility bills and payslips.

How long does it take?

It’s very hard to predict how long the mortgage application process can take, because each step can vary in time. It might take a few minutes or days, while it could take weeks if there are complications. There are two stages to the mortgage application process:

Stage 1

Getting a decision in principle, also known as a mortgage in principle. This is an initial agreement by the mortgage provider to lend you the amount stated, after they’ve reviewed your circumstances, income, outgoings and credit history. You can complete this stage before or after you’ve found the property you want to buy and it’s usually relatively straightforward and can take as little as 15 minutes to get a decision in principle.

Stage 2

The full underwritten application and getting a mortgage offer. This is more thorough, as the mortgage provider checks every detail, going through your finances with a fine-tooth comb and making sure that the property you want to buy is suitable. This is the more complex part of the process and can be affected by external factors you have no control over, so there can be delays.
If you spend time prior to the application looking at your credit history and seeing if there are ways you can improve your credit score, you’ll stand a much better chance of being accepted. The mortgage provider wants to check that you’re good at managing your money and that you don’t rely on credit. They must perform stress tests and ask detailed questions about your lifestyle and spending to make sure that you could still afford your mortgage if interest rates rise.
If you’ve recently moved jobs, you may want to hold off applying for a mortgage for a few months, as mortgage providers want to see that you’ve got a reliable income. Being on a probation period can result in your application being turned down, even if you’ve had a decision in principle. Mortgage providers are legally obliged to lend responsibly, so won’t bend their strict rules.
The mortgage provider will get the property valued, to check that it’s worth as much as you say it is, and whether it’s suitable. They’ll usually steer clear of properties with single brick extensions, homes built from non-standard construction materials such as steel and concrete, and homes with knotweed. If the surveyor undervalues the property, you might be approved for less money than you expected, so would need to find a bigger deposit to put down in order to proceed with the property purchase.
The biggest stumbling block when it comes to getting into your new home, is often waiting until the person who currently owns the property is ready. If they are still looking for somewhere to move to, or if you’re in a long chain, this can stall the process. If you’re not in a chain or are moving into a new-build, there shouldn’t be a delay. Remember, the legal process can also delay things, so this needs to be considered too.
This guide to the mortgage process was produced in collaboration with L&C Mortgages, the UK’s largest fee free mortgage broker and adviser.

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