How long does it take to get a mortgage?
Buying a home is a tricky business, and aligning all the different factors can pose a logistical nightmare. You’ll want to get your mortgage advice, deal, lender and agreement decided as soon as possible so you can act fast. We look at how long it takes to get a mortgage, the impact of coronavirus, and what you need to consider.
How long will a mortgage take?
It’s normally possible to apply for a mortgage Agreement in Principle, which states what a lender is likely to lend you based on some information online or over the phone in a couple of hours. It involves you providing some basic information about your finances and a credit check, but it’s not a 100% guarantee you’ll get the full mortgage until all the paperwork has been done at a later stage.
In terms of securing a mortgage offer, there’s no hard and fast rule over the time it takes, but most of us can expect to wait around a month (between 18-40 days) from application to mortgage offer – provided the process goes smoothly and your application is relatively straight forward.
What’s the impact of COVID on the mortgage process?
Research by Butterfield Mortgages in June 2020 found half of 1,300 homebuyers they surveyed had been denied a mortgage this year, despite having an agreement in principle.
Many lenders are asking for more evidence now to ensure borrowers are financially stable, while others are no longer taking into account bonuses and overtime when they calculate how much you can afford.
Lenders have been inundated with mortgage applications over the past month and are struggling to cope with demand. At the same time, lenders continue to be kept busy with mortgage holiday applications, which have now been extended beyond June to end October 2020.
So if you are looking to see how much you can afford, start sooner rather than later.
Why does it take so long?
In normal conditions, mortgages can take a while because they involve a huge number of checks and information processing. There is a range of information the lender will have to check, which includes:
- Verifying your income by wading through wage slips, bank statements or self-assessment returns (if self-employed)
- Assessing your financial commitments and outgoings, including childcare costs
- Getting proof of your current address
- Finding details of your solicitor who’ll carry out the transaction
- Receiving your estate agent’s details
The lender will then want to conduct a mortgage valuation survey (not to be confused with a building survey) of the property you want to buy. Depending on how busy their surveyors are this can take a few days or more than a week.
If the lender is happy with your personal financial situation, and the outcome of the valuation survey, they will offer you a mortgage.
How can I speed things up?
A mortgage broker can help speed up the process, because they are already familiar with the mortgage products on the market, including the specific criteria each lender looks for. This can considerably cut back on the time you’ll spend doing your own research and having to make appointments with or speak to individual lenders directly.
You can help speed up your mortgage application by having all the documents you’ll need handy and sending them through as soon as possible. It’s also a good idea – but not a stipulation – to make a list of all your financial outgoings as well as your income because your broker/lender will want to know that you’ll find the mortgage affordable.
How long does a mortgage offer last?
You’ll find a standard mortgage offer is typically valid for up to six months, whereas a re-mortgage is usually valid for three months (although it can also be six months). The difference is down to the fact that a purchase will typically take longer from application to completion.
Some lenders have a completion deadline instead of a time limit. If you go past this you can still use that lender for a mortgage but your criteria will be re-assessed so you’ll be starting from scratch again. If your circumstances have altered you may be offered a new deal.
- How much can I afford?
- How and when should I get a mortgage?
- How long does conveyancing take?
- Do I need a mortgage broker?
- How long does it take to buy and sell a home?
- How to make a successful mortgage application
- Self employed mortgages
- Mortgages for the over 55s
- The HOA Step-by-Step Guide to Buying a Home