How long does a mortgage application take?

How do mortgage applications work?

Buying a home can be a lengthy process, from finding the right property to moving in.

However, before you even consider moving, you need to apply for a mortgage, which is a multi-stage process that can vary based on numerous factors. 

In this article, we break down each stage of the mortgage application process, providing typical time frames for each stage and explaining why an application may be delayed or denied. 

How long does a mortgage application take?

According to Lloyds Bank, a mortgage application can take two to six weeks from start to finish. Of course, this isn’t cast in stone and depends on the complexity of the application.

Factors that could affect how long the application process takes include the lender's requirements, the buyer's financial situation and credit score, and if the buyer uses a broker.

We will break down each stage of the mortgage application steps and give some tips on speeding up the process.

What are the different stages of the mortgage application process?

Most people require a mortgage to buy property, so let’s walk you through the stages.

1. Initial preparation and application

The first stage of a mortgage application can take one to two days if you’re organised and involves choosing a lender and a broker if you decide to work with one.

Being diligent in gathering the relevant documentation will streamline the process.

A broker will guide you on the information you must provide for your application and advise you on the right deal.

2. Agreement in principle (AIP)

Once your preparation is done, you can apply for an agreement in principle (AIP), a statement from your bank or lender confirming that, in principle, they are prepared to offer you a mortgage up to a specific amount. 

An AIP does not guarantee you’ll get a mortgage from the lender.

They will investigate your finances and credit history and assess the value of the property you want to purchase.

The lender will likely do a soft credit check, but it’s worth double-checking first to avoid your credit score being impacted.

3. Full application submission

When the lender grants your AIP, you can submit a full mortgage application, which can take one to two days.

A mortgage broker will usually explain what a lender looks for before you submit your application so you can prepare beforehand.

Lenders usually require a fair amount of documentation, including:

• Proof of income and expenditure, including your three most recent payslips.
• Your latest P60.
• Bank statements for the last three to six months.
• Documents relating to other income, such as investments or benefits.
• If self-employed, the lender will request a tax return and accounts for previous years.
• Proof of identity and proof of address.

4. Underwriting and assessment

The underwriting and assessment process usually takes one to two weeks. During this process, the lender conducts a property valuation to ensure it is a sound investment and worth the purchase price.

The lender also conducts an in-depth investigation into your finances and a full credit check.

Other factors lenders consider when assessing your affordability include your current debt, job stability, number of dependents, and your age.

5. Mortgage offer

When the lender determines that you and your new home are an acceptable risk, the institution will present a formal mortgage offer, usually valid for six months.

6. Completion

Once the formal mortgage offer is in place, the lender releases the funds to the seller’s solicitor, which can take another one to two weeks.

How long does a mortgage application take through a broker?

A broker can expedite the mortgage application process. Your broker will know the relevant information the lender requires and will help prepare the necessary documents.

They will also talk to the lender and assist with finding you the right deal.

Working with a broker could shorten the mortgage application timeline, but it may add an extra step in the beginning for consultation and research.

It is worth it as brokers often have an excellent relationship with lenders, which can speed up the underwriting process and approvals.

What are some common reasons for delays in the mortgage application process?

Delays in the mortgage application process can happen for numerous reasons, including:

• Having a bad credit score or no credit history.
• Too many applications for credit.
• Too much debt.
• Your earnings are too low.
• Your debt-to-income ratio is too high.
• Being self-employed as the lender may need more time to review your application.
• Japanese knotweed on the property as it can cause structural damage.
• Changing your name.
• Incomplete paperwork.
• The lender is busier than usual.

A broker or solicitor can help reduce these delays by ensuring the documentation is complete and getting in touch if anything is needed.

What to do if your mortgage application is denied

Mortgage application rejections are not uncommon and may occur for many of the same reasons that cause delays, including a poor credit history, affordability issues, or property valuation concerns.

If your application is rejected, find out why and try to resolve this so your application is approved next time.

If it’s a creditworthiness issue, pay your outstanding debts and account instalments on time and in full. If you have no credit history, consider using a credit card and manage repayments well.

For affordability issues, work according to a budget to spread your money further and find a way to supplement your income. Increasing your deposit will also help, as well as consulting a mortgage broker for assistance.

Some buyers will reapply with a different lender, but remember that more rejections could lower your credit score, further impacting your ability to get a mortgage.

Handy tips to speed up your mortgage application process

For a smooth and speedy mortgage application process, follow these tips:

• Work with a broker, as they can streamline the process and find you the best deals.
• Prepare all your documentation early.
• Make sure your credit history and score are good.
• Deal with outstanding debts before applying.
• Choose an efficient lender with quick processes, which a broker can advise on.

Get expert financial advice

The mortgage application process can take between two and six weeks or even longer if there are any delays.

The best way to ensure a smooth process with no delays or rejections is to ensure you have the information and documentation you need, as well as a good credit score and history. Finally, remember that working with a mortgage broker will streamline the process. 

Get matched with a professional financial adviser or mortgage broker via Unbiased to navigate every step of your property journey successfully.