How Long Does A Mortgage Application Take?

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It’s no secret that getting a mortgage is a big commitment. Not only do you have to be prepared to make monthly payments for years on end, but you also have to go through the process to apply for a mortgage, which can seem daunting. So how long does a mortgage application take, anyway? This article, put together by our mortgage brokers in Essex will provide you with a breakdown of the entire process so you know what to expect every step of the way. Keep reading for more information on the stages of a mortgage application.

Mortgage Application Process 

1. Estimate Your Budget

The first step in any mortgage loan application is to figure out how much you can afford. Your mortgage broker will look at your income, debts, and expenses to come up with a loan amount that’s comfortable for you. It’s a good idea to start by estimating your budget. This way, you have a ballpark figure to work with. Government-backed schemes are available for first-time buyer mortgage applicants, so remember to discuss this with your mortgage brokers.

2. Mortgage Agreement In Principle

Once you’ve determined how much you can afford, the next step is to get a mortgage agreement in principle (AIP). This will involve submitting your financial information to your mortgage broker so that they can proceed to obtain the most suitable loan for you from the ideal lender. If everything looks good, you’ll have an AIP upfront for a mortgage!

Keep in mind that getting an AIP doesn’t mean you have to go through with the purchase. It’s just a way to make sure you’re eligible for a loan and that you’re in a suitable financial position to buy a home. The benefit of getting a mortgage agreement in principle is that you’ll have a clear idea of how much you’ll get agreed for, making the process of shopping for a home easier. 

3. Shop Around For Properties

Now that you have a mortgage in principle, it’s time to start shopping around for properties. Remember to take the time to view multiple properties and give yourself time to think about each property based on its merits. Real estate agents are often very resourceful and can assist you with finding a property that matches your criteria. Don’t be afraid to ask them for help; they want you to find the perfect home, too! Once you’ve identified the ideal home, discuss it with your mortgage broker to ensure that your affordability is suitable for the property in question.

4. Make An Offer

Once you find a property you’re interested in, it’s time to make an offer. This will involve contacting your mortgage broker with the details of your desired home. From here, you will follow their lead, and they will proceed with the necessary steps in the application process. They will also advise you on a reasonable amount to make an offer.

5. Consult Your Mortgage Broker

Now that you’ve made a successful offer on the house, it is time to meet with your mortgage broker to discuss the details of the mortgage, including the terms and conditions that you have been accepted for. They will also discuss the monthly payments, fees and various surveys you can get. Your mortgage advisor will now submit your details to the lender.

6. Home Surveys

Once your offer is accepted, the next step is to have a home inspection done by a surveyor and mortgage solicitors. The solicitor’s role is to handle any legal requirements regarding the property. Your solicitor will submit searches to the local council to determine if there are any planning or other issues that may affect your proposed property. These searches could cost you up to £300. These searches are the only upfront fees you will need to pay your solicitor. 

The surveyor’s role is to determine if any significant repairs need to be made before you close on the property. The main things that will be checked will be the structure, foundation, roofing, electrical, and plumbing. There are three different types of surveys you can request to have done. They are: 

a) Mortgage valuation report. This is the most basic and is provided by your lender. This report is simply to find out what the property’s value is and if there are significant concerns regarding the property. The majority of mortgage valuation reports are free; however, you could be charged up to £50 for this service.

b) RICS homebuyer report. This report is typically suggested for homes in a reasonable condition. It is a more detailed survey that includes an interior and exterior inspection and a valuation. 

c) Building or Structural Survey. This is the most comprehensive type of survey. It is recommended for older homes or homes with visible damage that will need repairing. 

Once the needed surveys have been completed and signed off, you will receive your legal mortgage offer.

Once your mortgage is approved and issued, it takes on average 12 – 16 weeks before you sign the legal documents. During this time, the buyer solicitor and seller solicitor negotiate and correspond back and forth until an agreement is reached. It is advised that you confirm all your details with your solicitor to ensure that all your details are correct. After this process, you and the seller have agreed to proceed. Once the contracts have been exchanged and signed, you’re officially a homeowner! You will need to take out building insurance to ensure that the financed structure of the property is covered.

8. Registration Of Property

After exchanging contracts, the remainder of the outstanding money is now transferred from your solicitors account to the seller’s solicitors account. You will also be required to settle your solicitor’s bill. In addition, your solicitor will now register the transfer of ownership with the Land Registry for properties in England and Wales; in Northern Ireland, it will need to be registered with Land and Property Services. 

Buyers of residential homes have 14 days from the completion date to file the Stamp Duty Land Tax Return and will pay any taxes due in England or Northern Ireland; your solicitor should arrange this for you. In Wales, you will need to pay Land Transaction Tax.

How Long Does A Mortgage Application Take To Be Approved?

The entire mortgage application process timeline usually takes around 13 – 16 weeks from the day of finding the ideal home. However, keep in mind that it can vary depending on your situation. The time it takes to process a mortgage application is dependent on several factors, such as the type of loan, your credit score, and the documentation you provide.

Why Does A Mortgage Application Take So Long?

One reason mortgage applications take so long is that lenders need to verify all of your information. This is done by ordering a credit report, verifying your employment history and assets, and checking for any bankruptcies or other legal issues.

Another reason mortgage applications take so long is that the lender needs to review the entire file and make a decision. In addition, the lender may ask for more documentation or clarification on specific points, delaying the process.

It is important to remember that a mortgage application is a serious financial commitment. The lender wants to make sure that you are fully aware of all the terms and conditions before approving your loan. By being patient and providing all the required documentation, you can help speed up the process!

Here are some of the main reasons why a mortgage application may be delayed:

  • Valuation report
  • Not providing enough detail of your financial portfolio
  • Not submitting all the required documents
  • Misinterpreting your approval status

These are some of the most common reasons why your mortgage application process may take longer than others or be denied altogether.

How Long Does A Mortgage Offer Last?

If you are lucky enough to receive a mortgage offer, it is suitable for between 90 – 180 days, depending on the criteria from your lender. This means you will have 6 months to complete the loan process, find a suitable property, and finalise the legal paperwork. If something comes up that delays the process, be sure to let your mortgage broker know as soon as possible so that they can contact the lender about the delays. 

Once Accepted, How Long Will It Take To Exchange Contracts?

Assuming that you have found a property, the offer has been accepted, your loan is granted, and it’s now time to finalise the deal. After finding a suitable property, this process is usually quite lengthy and could take 13 – 16 weeks to exchange and finalise the contracts between the buyer’s and seller’s solicitors. During this time, both the buyer and seller will need to complete their due diligence and arrange for the appropriate funds to be transferred, and any other legal processes will need to be completed.

Need Help With A Mortgage Application? 

At Bolt Mortgages, we are here to answer any of your questions and guide you through the entire process, from start to finish! Feel free to contact us to discuss your mortgage options and any other questions you may have before beginning the mortgage application process. Buying a home is one of the most satisfying things you will do in your lifetime. It gives you a sense of accomplishment, security, and a place to call HOME! Therefore, our team of experienced mortgage brokers will ensure that the process is as smooth and stress-free for you as possible! So give us a call today for free mortgage advice, and let’s find your home.

Frequently Asked Questions (FAQs)

How Do I Apply For A Mortgage?

When applying for a mortgage, you will be required to provide the different lenders with the following information: 

a) Proof of income

b) Financial expenditure

c) Current debt

d) Proof of physical address 

e) An entire credit history

Once you have all of the above information, you can obtain the necessary documentation from your lender. You will be required to complete the documentation and provide the lender with a complete bundle of documents. You could also consider completing an online mortgage application. You will also need to provide the lender with your estate agents information. 

If you need any assistance in applying for a mortgage, then feel free to contact us today to discuss your options.

Does Claiming Benefits Affect A Mortgage Application?

It is generally recommended that you disclose any benefits you are currently receiving when applying for a mortgage. This is due to the fact that the lender will need to consider your monthly income and your affordability. In addition, regardless of whether you’re claiming benefits or not, you’ll be offered the same interest rate as those who do not claim benefits, and your benefits may even positively impact your overall affordability, giving you more budget. 

If you have any questions about how claiming benefits might affect your mortgage application, please don’t hesitate to contact us for more free mortgage advice!

Does Pregnancy Affect A Mortgage Application?

A loan will always have an effect on your mortgage affordability. When applying for a mortgage, the lender will look at your total debt-to-income ratio. This includes all of your monthly debts, not just your future mortgage payment. If you have any large loans outstanding, such as a car loan, student loan, or any other personal loans, this could affect your ability to get approved for a mortgage if your expenses outweigh your income. The lender may decide that you can’t afford another monthly payment and deny your application. This is particularly important when you are planning on a joint mortgage application. Both parties’ financial affairs will have to make sense for the mortgage to be approved. 

How Do Loans Affect A Mortgage Application?

When applying for a mortgage, the lender will look at your total debt-to-income ratio. This includes all of your monthly debts, not just your future mortgage payment. If you have any large loans outstanding, such as a car loan, student loan, or any other personal loans, this could affect your ability to get approved for a mortgage if your expenses outweigh your income. The lender may decide that you can’t afford another monthly payment and deny your application.

If you’re planning on taking out a mortgage loan in order to buy a new home, be sure to factor it into your debt-to-income ratio. The higher the ratio, the less likely you are to be approved for a mortgage. Try to pay off any high-interest debts before applying for a mortgage so that you can improve your chances of getting approved.

If you’re planning on taking out a mortgage to buy a new home, be sure to factor it into your debt-to-income ratio. The higher the ratio, the less likely you are to be approved for a mortgage. Try to pay off any high-interest debts before applying for a mortgage so that you can improve your chances of getting approved.

Will Credit Card Debt Affect My Mortgage Application?

Credit card debt is generally considered a high-risk form of borrowing, so your mortgage lender will likely take this into account when reviewing your application. If you have a lot of credit card debt, you may be seen as a greater risk to lend money to, which could affect the interest rate or terms offered on your bad credit mortgage. Therefore, you must be honest about your credit card debt when applying for a mortgage and work on paying off any balances before submitting an application. By being proactive and transparent about your financial situation, you can show the lender that you’re responsible with money and are ready to take on a new loan.

What Happens If A Mortgage Application Gets Rejected?

If your mortgage application gets rejected, the consequence thereof depends on whether a soft or hard search was done. Many lenders conduct soft searches, which do not necessarily negatively impact your credit rating. It’s also worth noting that most lenders give you two options when it comes to product fees. You can decide to add these fees to the loan amount or pay the fees upfront. Fees paid upfront are usually refunded if an application is rejected. In cases where applicants have bad credit or apply from niche lenders, an application fee could be charged. If you have any questions or concerns about the application process, your mortgage broker will be able to help guide you through it.

If you’re having trouble getting approved for a mortgage, there are a few things you can do to improve your chances. One option is to increase your down payment amount; this will show lenders that you’re serious about buying a home and willing to invest more money into the purchase. You could also increase your credit score by paying off any outstanding debts and maintaining good credit habits.

Can You Cancel A Mortgage Application?

A mortgage application is not a binding contract, so you can always back out if needed, regardless of the mortgage application accepted initially by the applicant. So yes, you can cancel a mortgage application; however, you must do so before closing. There may be fees associated with cancelling the application. So it is crucial to speak with your lender or mortgage broker to understand the cancellation process and associated costs. Canceling a mortgage application can be stressful, but knowing your options and rights is vital. Speak with your lender or mortgage advisor to learn more about the cancellation process and how it may impact your home buying journey. Seek the counsel of an experienced professional before making any significant financial decisions.

Does Sick Pay Affect A Mortgage Application?

This is a question that is asked often by applicants. The answer, fortunately, is a simple one; no, it does not. You may not be denied a mortgage due to illness or disability; however, it depends on the circumstances of each case. If you have been out of work due to illness or injury and have been receiving sick pay from your employer, this may be considered when the lender reviews your application. They may ask for documentation proving that you are still receiving ill pay payments from your employer and how long you will continue receiving these payments. The minimum requirement is usually 3 months payslips or a single payslip and an employment letter if you work for a larger recognised employer.

If you are self-employed, proof of regular income may be more challenging to provide. You may be asked to provide copies of the last 3 months bank statements to prove that you have been earning enough money to secure a mortgage. If your business has taken a hit recently due to illness or injury, this will need to be explained. It is always best to be honest with your lender and describe any unusual circumstances that may have affected your income flow. If this is the case, they will require bank statements to determine your average earnings over a period of two years, as a business can fluctuate depending on various factors.

If you need assistance in the application process or have any questions you would like to have answered, feel free to contact us at Bolt Mortgages!

Can You Change Jobs During A Mortgage Application?

Yes, you can change jobs during a mortgage application as long as the new job is in the same monthly income range; otherwise, you may be denied your mortgage. Always consult with your mortgage broker to see if the job change will have an impact on your application status. For example, if you are changing jobs to take a job that pays less per month, then you could be denied your mortgage; however, if you are accepting a job that pays significantly more than the job you had when first applying for your mortgage, then you should definitely inform your lender of the job changes as this will increase your chances of being approved for the loan!

In addition, if you are self-employed and are now deciding to change your line of work, this will have a significant impact on your mortgage application. You will need to provide more documentation to prove your income. These circumstances are similar if you are contracted for a fixed term, we go into more detail about this in our fixed term contract mortgage guide.

Your lender will also want to see an explanation of how you calculate your yearly income. All this information helps the lender understand precisely how much money you make each year and if you can afford your mortgage payments.

Don’t worry if any of this sounds confusing or like too much work! The mortgage process can be daunting, but there are plenty of professionals, like us, who can help guide you through it every step of the way!