Applying for a mortgage the first time can be a nerve-racking experience. Generally, you want your application approved as quickly as possible so you can move into your dream property.
However, as mortgages tend to be tricky business, there are plenty of pitfalls that may slow down or worse, cause your application to get rejected. For buyers, the waiting period can be a very overwhelming time.
If you’re new to this entire arena, you might have several questions about the mortgage application process. That’s entirely understandable, as this is a huge financial commitment you’re stepping into.
Using a broker for your mortgage application may be one of the things you’re considering. But how long does a mortgage application take through a broker? What are the reasons your application can take so long? How can you speed up your mortgage application approval?
Let’s answer all your questions below!
Mortgage Application Process 101
A mortgage application process has two major stages: the mortgage in principle or MIP stage (also called agreement in principle or AIP) and the application itself.
While entirely optional, you want a MIP certificate as it shows how much you can afford, which is a handy document to show to estate agents and lenders. It proves that you’re a serious buyer and can get a mortgage.
Processing an MIP takes about one day, and you can get it online or through a mortgage broker like When The Bank Says No. It requires details of your income, your daily expenses, and how much savings you have for a deposit.
After getting an MIP certificate and finding your dream property, it’s time to put together your application. Lenders won’t ask you to pull up anything too complicated, but we’d suggest setting aside a few days to prepare your documents.
Here are some of the things you need:
- A valid ID (passport, driving, etc.)
- Proof of address (water or electric bills)
- Proof of income (payslips or certificate of employment)
- A bank statement (typically three months’ worth)
- Other supplementary evidence a lender may request
Once you apply, the lender will run a credit check and affordability assessment. They do this to ensure you’re the right fit for a mortgage and product you’re applying for.
A valuation survey also happens in this stage. The lender will estimate the property’s value, taking into account its location, lot size, amenities, and more, to make sure it’s worth what the buyer is paying for.
You don’t have to do anything at this stage of the application. Everything will be carried out by your lender from here on out. They’ll contact you if you need to provide supporting documents or confirm any details on your documents.
If your application is approved, the lender will send you a formal mortgage offer. Otherwise, you may need to reapply for another mortgage with other lenders.
How Long Does Mortgage Approval Take?
In the UK, a mortgage application typically takes four to six weeks before you get approval from a lender. But the more accurate answer is it’s different from one person to another.
The lender you’re applying with, your unique financial situation, how quickly you respond to follow-up requests, and whether you’re applying through a broker can hasten or slow down your approval.
Mortgage Application Through Lenders vs Brokers
While you can certainly go directly to a lender for your application, walking through the entire steps alone, from getting a MIP to liaising with the lender, can take considerable time. It’s especially daunting if it’s your first time applying for a mortgage.
Here are some of the biggest pros and cons of applying directly to a lender:
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A mortgage broker specialises in mortgages. That means they’re highly experienced in applying on behalf of their busy clients, or even those with complicated financial records. They can find solutions to problematic issues that may hinder your mortgage.
Working with a broker takes a lot from your plate, saving you time and energy and speeding up your application. Right from the start, your broker will see that you get the best lender and deals to suit your budget and situation.
Most importantly, your mortgage broker will do a lot of the paperwork. They’ll handle the necessary day-to-day communication with the lender, keeping you updated on your application’s progress.
With the help of an expert broker, you can cut your mortgage application time to two to four weeks. When The Bank Says No have a team of mortgage experts to get you through the application seamlessly!
Why Is My Mortgage Application Taking So Long?
If you’ve been checking your mail for weeks waiting for your mortgage approval, you may wonder what’s taking your lender ages to give the thumbs up.
To give you an idea of what happens behind the scenes, here are some of the top reasons a mortgage application can get held up, or worse, rejected:
Your Credit History
One of the primary factors that may result in delayed mortgage approval is your credit history. If you have poor credit records or if your lender finds issues with your credit report, they may opt to delay or reject your application.
Before applying for a mortgage, it may be best to ensure you’re on the electoral roll with your current address, as this can be a massive plus on your credit score. If you know you have a poor credit history, it may be time to take appropriate steps to improve it.
Financial Situation
Besides your credit score, your present financial situation is another factor that may cause a delay in your mortgage. It’s one of the things lenders assess when deciding to approve or reject an application.
For instance, if you’re fully employed with a good deposit and no significant outgoings, you’re more likely to get your application approved quickly.
On the other hand, if you’re experiencing employment issues, such as being self-employed or transitioning between companies, the lender may require further verification of your income and employment status.
Documentation Problems
Missing and incomplete documents are a common culprit for mortgage application delays. That’s why you should check and check again before submitting the documents lenders require.
If you’re self-employed, talk with your accountant to learn how to prove your income before you apply. At a minimum, you’ll typically need your tax returns for the last two years to apply for a mortgage.
The Lender’s Underwriting
Mortgage underwriting is the process that happens after the bank has collected your credit and financial information.
It’s when they verify your identity and decide whether to accept or reject a mortgage application based on the applicant’s income, finances, cash reserves, and current debts.
Every lender will have a different underwriting process. It usually takes a few days to several weeks, depending on how streamlined their practices are, how many clients they’re taking on, and if they need additional information from the applicants.
Some banks also prefer manual to automated underwriting which can also impact the time between your submission and approval.
Delay In The Valuation Process
During underwriting, the lender will conduct a property appraisal or valuation to determine the house’s estimated worth. This is typically done by a certified appraiser, which can take time to arrange.
Flags in the appraiser’s valuation report can further prolong your approval.
For example, if the house’s current conditions make its value lower or higher than the offered price. Structural issues and major damages on the property may also require fixing on the part of the seller before the lender gives the go-ahead.
Why Consider A Broker For Your Mortgage Application?
Purchasing a property is the biggest financial step many of us will ever take. It’s easy to get overwhelmed with the intricacies when applying for a mortgage but it’s not something a little expert support can’t resolve.
There are many advantages to working with an expert advisor in your mortgage application process. So, if you’re on the fence about whether to use a broker or not, here are some benefits you should know about:
Get Expert Advice
Before offering advice, brokers and financial advisors must obtain professional qualifications. Under the Financial Conduct Authority, they’re ethically obligated to give you the best deals and mortgage products possible.
Many mortgage brokers have extensive knowledge of the lender market that a buyer, especially a first-timer, may not be able to find on their own.
They’re also impartial in their advice; not constantly selling specific products from certain lenders. Brokers are completely focused on helping you get the best mortgage deals suitable for your needs.
Save Your Time
Working with a mortgage expert is a great decision if you want to speed up your application and save valuable time.
Instead of racking your brain choosing between several lenders, you can rely on your mortgage broker’s wealth of industry knowledge to find the lender most likely to get your application approved.
Getting rejected because you’re working alone can waste weeks of your time and cost you your dream home. From preparing the documents to performing the necessary administrative tasks, a broker will guide and carry them out for you.
Variety Of Mortgage Options
One of the most sought-after benefits of applying alongside a broker is their connections to the mortgage sector. They’re not tied up to one lender, so you can rest assured that products from across the market are on the table.
For a buyer, this means you can compare lenders and products easily to find which deals would work best in your situation. A good broker might even offer you exclusive products that aren’t available for everyone.
Reassurance When Applying
Reassurance is a most welcome benefit when you know an expert is working on your mortgage application. You can rest assured that there’d be few issues and if anything arises, you can trust your broker to resolve it on your behalf.
Beyond mortgages, brokers can offer invaluable financial insights on several aspects of your finances. For instance, many advisors at When The Bank Says No have expertise on topics like building cover and life insurance, which may lead you to great deals on them, too!
How Can I Speed Up My Mortgage Application Approval?
A mortgage broker can significantly speed up your application process, but you can do plenty to help your broker and move your application along faster.
Try to have every document ready and get it to your broker quickly. Getting your P60s, pay slips, self-employed accounts, and tax returns beforehand can help make things smoother.
Regularly communicating with your mortgage broker is another superb way to get faster results. This way, you can respond immediately in cases when the lender demands additional requirements.
Frequently Asked Questions
How Long Does A Mortgage Offer Last?
The validity of a mortgage offer typically lasts for three to six months. This applies to standard residential and buy-to-let mortgages, within which you must complete the purchase of the property.
New-build and bad-credit mortgages usually have a longer validity of about six or more months to give time for construction. Lifetime mortgages have shorter validity periods of one to three months from the date the offer is issued.
How Long Do I Wait For A Mortgage Fund Release?
The release of mortgage funds varies between lenders. It may take a few days to a few weeks, depending on whether they prefer to release the funds before or after the exchange of contracts, including other factors.
Preparing yourself for protocol checks can shorten your waiting time. These procedures may include anti-money laundering checks and standard financial assessments.
Final Thoughts
Several factors are at play in how long a mortgage application gets approved. Generally, going directly to a lender takes four to six weeks, but with a competent advisor and sufficient preparation, you can cut your processing time down to two to four weeks.
Are you considering buying your first property ever? Get in touch with When The Bank Says No and get access to a team of mortgage experts to help make your dream home a reality!