How long does it take to get a mortgage?

Getting a mortgage is one of the biggest financial commitments you’ll make in your life, and finding that perfect home can be an emotional journey. But how long does it take to get a mortgage? Usually, it takes around 4 to 6 weeks, although every mortgage application will vary depending on your circumstances. Here, we 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 or bank to buy a property or piece of land. By taking out the mortgage, you enter into an agreement with the lender or bank to repay them the money you have borrowed.  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 and sell it to recoup the money.

Almost everyone requires a mortgage to buy a property. Those who don’t need a mortgage have the full amount of cash required to buy a house, and are known as “cash buyers”.

What is the mortgage application process?

1. Calculate what you can afford

Before you even start looking at properties, examine your incomings and outgoings to work out exactly what you could afford to pay in monthly mortgage payments. This will give you an idea of the type of property you can afford.

You can use an online mortgage calculator to quickly work out how much you will be able to borrow based on your income and existing debts. Don’t be disheartened if your calculations show you can’t afford much.

Budgeting can help, as can government schemes such as Help to Buy; Equity Loan and Shared Ownership. In addition to this, you’ll need to have already saved up for a house deposit. A deposit for a mortgage should be at least 5% of the property’s value, but the more you can save up, the better. 

2. Find a suitable property

Once you know what you can afford, you can start looking for an actual property - this is the fun part! Use online portals like Zoopla and Rightmove, and register with local estate agents.

3. Check your credit reports

Your credit score is a rating that measures how reliable you are at paying back credit such as loans or credit cards. Checking your score is something you should do regularly anyway, but particularly before applying for a credit card, loan or mortgage.

You should check your score with the three main credit reference agencies (Equifax, Experian and TransUnion). It’s free and will give you a better idea of your chances of getting a mortgage. A low score will make it much harder to secure a mortgage – and if you apply for a mortgage and get rejected, it will have a further negative impact on your credit score.

So do what you can to improve your score, which could include registering to vote or closing unused bank accounts.

4. Choose a mortgage and secure an agreement in principle

You can find a mortgage by going directly to a lender such as a bank, or by using a mortgage broker who finds the best deal for you. You can even do both - after all this is a big decision and choosing the right mortgage could save your thousands of pounds.

Use our mortgage comparison tables to find the best interest rates, check with your existing bank to see what it can offer, then contact a broker to see if he or she can find a better deal.

Once you’ve chosen the type of mortgage you want, you’ll need an agreement in principle (AIP), which will give you an idea of what the mortgage lender is willing to lend based on your current financial situation. An AIP shows sellers and estate agents you are in a position to make a serious offer.

5. Make an offer to the estate agent

Making an offer on your dream home can be scary. Many 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, so it may be worth trying a lower offer.

A good tip when offering below the asking price is to choose a figure between 10-20% lower. The estate agent should be able to advise you on whether it is likely to be accepted. 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 now need 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, you may change your mind, which will mean waving goodbye to any money you’ve spent so far (but could save you a lot in the long term). In that situation, you’ll need to go back to step two (although you can skip steps three and four).

Otherwise, line up your conveyancer (a solicitor who specialises in property transactions) to speed up the process as much as possible. Choosing the right mortgage conveyancer can make a big difference to how long it takes to get a mortgage, so ask for recommendations from friends or family or from your mortgage broker if you have one.

7. Finalise the mortgage

Once you are ready to complete on your new home, contact your lender or broker to confirm you want to go ahead with the mortgage offer.

You’ll need to pay the arrangement fee to secure it. An arrangement fee is a charge made by the lenders for arranging credit. Some lenders, however, allow you to add this charge to your mortgage. There are many additional costs associated with getting on the property ladder, but as long as you make yourself aware of every step of the process, you can ensure you don’t run into any surprises on the way. 

If you’re buying a new property, conveyance usually takes between 4 and 12 weeks – and yes, it will feel like a lifetime! If you’re remortgaging and staying in your current property, conveyance is usually a lot quicker – around 4 weeks.

Most mortgage offers only last for 3 months, although how long a mortgage offer lasts depends on the type of property you are buying - some lenders allow for 6 months and others 9 months when dealing with new-build properties.

Either way, it’s worth doing 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. You can avoid unnecessary delays by ensuring there is clear communication between all parties - meaning any issues can be resolved as quickly as possible.

29th May 2020