How long does a mortgage application take?

Posted on: 25th July 2022 | Filled under: How to Sell a House
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A question often asked by first-time buyers is ‘How long does a mortgage application take in the UK?‘ 

The length of time it takes to get a mortgage varies from lender to lender, but the average is 4-6 weeks. Some lenders can process your application in as little as 24 hours, but that is very unusual.

Getting a mortgage can be a long and cumbersome process, but that isn’t always the case. It all depends on what type of mortgage you’re looking for and the specific lender you choose. In this article, you’ll learn about this process and what you can expect from it.

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How long does it take to get a mortgage approved?

The answer to the question ‘how long does a mortgage offer take Wales?’ depends on the bank you’re applying with, plus several other factors. In some cases, you can get through the process in as little as 24 hours, while others find they need six weeks or longer.

Mortgage application process

The process of applying for a mortgage is authorised and regulated by the Financial Conduct Authority (FCA), which ensures that lenders and brokers keep to a strict set of rules.

The first step is to arrange an initial meeting with your broker or lender to discuss your requirements. This will include an agreement in principle (AIP), also known as a mortgage in principle. An agreement in principle (AIP) is essentially a document that tells you how much money you can borrow from the bank. A good lender will give you your AIP within 24 hours.

You will then need to complete an official mortgage application form and submit the relevant documents.

Your lender will then perform their own checks and send out a valuation surveyor to value the property you want to buy.

Once your application has been submitted, it can take up to six weeks for your mortgage to be approved or denied.

If your mortgage application is approved, the lender will help you schedule your completion date. They will also take care of any other duties related to the transaction until your new home is yours.

Factors that affect the speed of your home loan application

There are several factors that affect how quickly you can get your mortgage approved. It’s a good idea to check in with your mortgage advisor about where you stand before you even start looking for the home of your dreams.

Your down payment amount

The bigger your down payment, the faster your loan application will be processed. A large down payment lowers your loan-to-value ratio (LTV), which gives lenders more confidence that you’ll be able to make your payments on time.

Your credit score

Your credit score may also affect how long it takes to process your home loan application. If your credit score is low or average, it may take longer for lenders to decide whether or not you’re a good candidate for a mortgage.

If you have an excellent credit score, you may qualify for a better interest rate and terms, which could speed up the processing of your application.

You can get a free copy of your credit report through the three major credit bureaus (Experian, Equifax, and TransUnion).

Your debt-to-income ratio

This is the amount of money you make each month compared with how much debt you carry. Banks want to see a ratio lower than 36%. The lower your debt-to-income ratio, the faster you’re likely to get approved. To improve this ratio, pay off debts as soon as possible.

How much cash do you have on hand

The amount of money you need upfront is one factor that affects the speed of your home loan application. You can expect a quicker approval if you don’t have to finance the entire purchase price.

The type of home you want to buy

You’re more likely to get a loan quickly if you choose an existing home or townhome. Flats can be trickier because every flat development has its own set of rules and regulations. Mortgage lenders need more time to complete due diligence on the property and ensure it meets their requirements.

How to speed up the mortgage application process

Get pre-approved before you start looking at homes

This is the most important step in speeding up your mortgage application. If you show up to the bank without getting pre-approved, they won’t take you seriously and will make you jump through many hoops just to be considered for a mortgage.

Find the right real estate agent

Finding a trustworthy estate agent can give you guidance throughout your entire home-buying experience, including speeding up your mortgage application process. The right agent will be able to give you advice on what to expect throughout the mortgage journey.

Have your paperwork in order

A major part of speeding up your mortgage process is having all of your documentation ready. This includes bank statements and tax returns. Some lenders may ask for additional documents. So it’s important to know what might be required for your specific situation.

Do browse for options as not all lenders are the same.

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