Mortgages tend to take around 18 to 40 days from application to acceptance, though this varies depending on individual circumstances. If yours is a nice and simple mortgage, it could be quicker, but if it’s a complicated job, it’ll take longer. Here we’ll outline the steps to getting a mortgage and what you can do to speed things up.
What is a mortgage?
A mortgage is a loan agreed between you and a lender to buy a property or piece of land. It’s “secured” against the value of your home, which means if you can’t keep up with the repayments, your mortgage lender could repossess your house.
Almost everyone requires a mortgage because without one, you’d need the full value of the property in cash to buy it – those few who have the whole amount are known as “cash buyers”.
What is the mortgage application process?
1. Calculate what you can afford
Before you even start looking at properties, closely examine your incomings and outgoings to work out exactly what you could afford to pay. Use a reliable mortgage calculator to help you, such as the one from the Money Advice Service.
Don’t be disheartened if your calculations show you can’t afford much. Firstly, start budgeting more rigidly but if this is not be sufficient, look into government schemes such as Help to Buy Equity Loan and Shared Ownership.
2. Find a suitable property
Once you know what you can afford, you can start looking for an actual property. We call this “the fun part”. Use online portals like Zoopla and Rightmove and register with estate agents local to your chosen location (if you have one).
3. Check your credit reports
This is something you should do regularly anyway, but particularly before applying for any kind of credit product be it a card, loan or mortgage. You should check your score with all three credit reference agencies (Equifax, Experian and TransUnion) as different lenders use different agencies when reviewing your credit history.
You used to have to pay to check your report in full but since the arrival of GDPR, you can do this for free.
If your score is low, find the reason why (such as if you’re not registered to vote, have various listed addresses, have unused credit) and try to improve your credit score as soon as possible. A low score will make it much harder to secure a mortgage – and if you apply for a mortgage and get rejected, it’ll have a further negative impact.
4. Choose a mortgage and secure an agreement in principle
If you’ve followed the steps above, it’s now time to choose a mortgage!
Check with your current bank first, but do shop around to ensure you’re getting the best deal. Remember, this will likely be your biggest monthly expenditure so it’s worth putting in the research to minimise it as much as possible. If you need help, speak to a mortgage broker.
Once you’ve decided on a mortgage, you’ll need to approach the lender to secure an agreement in principle (AIP). This basically says the mortgage lender is willing to lend you X amount based on your current financial situation. Most estate agents won’t take an offer seriously unless you have an AIP.
5. Make an offer to the estate agent
This is perhaps the biggest and scariest part of the process: making an offer on your dream property.
Most people worry about haggling in case they lose the property altogether. While that is a genuine possibility (particularly if a lot of other people are making offers), know that sellers and estate agents expect you to come in below the asking price.
If all goes well, you’ll have your offer accepted.
6. Complete valuation and property surveys
If you’ve got this far, congratulations! You’re well on your way to getting your first mortgage.
You’ll now need to arrange a surveyor to check the state of the property. There are a few different types of property surveys available – which one you choose depends on the state of the property itself. The end result of a survey may impact the final price, even if your offer has already been accepted.
If the surveyor finds a problem that’ll be costly to fix, such as subsidence or rising damp, you could ask the seller to knock down the price. In fact, if the problem is very severe, it could deter you from buying the property at all and you’d lose money on any fees you’ve paid at this point. In that situation, you’ll need to go back to step two (though you can skip steps three and four).
Issues arising at this point are common cause for delay. To speed up the process as much as you can, it could be worth lining up your conveyancer (a solicitor who specialises in property transactions).
7. Finalise the offer and mortgage
Provided all has gone to plan, contact your lender or broker to confirm the mortgage.
You’ll need to pay the arrangement fee to secure it though some lenders allow you to add it to your mortgage.
It’s the latter stages of the process which are the most stressful and can cause the biggest delays. Clear communication between all parties is the best way to ensure any issues are resolved as quickly as possible.
If you haven’t already, you will now need to arrange a mortgage conveyancer – a solicitor who will help with the complicated legal processes of actually transferring the home from the seller to the buyer. You might have a conveyancer who has been personally recommended to you, or if you used a mortgage broker they will likely have a recommended conveyancy firm that they work with.
If you’re buying a new property, conveyancy usually takes between eight and 12 weeks – and yes, it will feel like a lifetime! If you’re remortgaging and staying in your current property, conveyancy is usually a lot quicker – around four weeks.
Most mortgage offers only last for three months (though some lenders allow for six months and others nine months when dealing with new-build properties) so do everything in your power to complete the process quickly. Otherwise, you’ll need to make a second application, which will cause even further delays and could see the whole sale fall through.