Buying a home means that you will have to clearly plan out the expenses you will incur. One major expense is the cost of your new home. If you want to take a mortgage to cover the cost of your new home, you should know how long it takes to get a mortgage. Further, we will take a look at the impact of coronavirus.
Getting a mortgage in principle
Generally, you could get a mortgage Agreement in Principle in just a few hours after you provide basic information about your finances and a credit check to a lender. However, a mortgage Agreement in Principle is not a guarantee that you will also get the full mortgage. Click here to find out more about mortgage in principle.
How long will a mortgage application take?
If the process goes smoothly, it could take around a month after you submit the mortgage application.
Is there anything you could do to speed up the process?
Gather the necessary information
The mortgages application process takes a while because the process involved numerous checks and processing of information.
Your mortgage lender will require you to provide a range of information. It would be best if you gather the following documents before you approach a mortgage lender:
- Verification of your earnings – You should gather last 3 month's pay slips, bank statements, previous P60. If you are self-employed, then you should get your previous self-assessment return handy.
- Financial Commitment – Do you have any financial commitments such as childcare cost? If so, then you get details of your outgoings.
- Proof of identification and current address
- Detail of your solicitor or licensed conveyancer
- Details of the estate agent
- Proof of deposit
The mortgage lender will then conduct a mortgage valuation survey. This should not be confused with a property survey. If the mortgage lender is pleased with the valuation survey and your financial situation, you will probably get the mortgage offer.
It will take you a while to find the right product for yourself. You will have to meet with different lenders and speak to them regarding their eligibility criteria.
If you hire a mortgage broker, it can speed the process up as mortgage brokers are familiar with the available mortgage products and each of the products' specific eligibility criteria.
How long is a mortgage offer valid?
Generally, standard mortgage offers are valid for up to 6 months. However, you should be aware that some mortgage lender will have a completion deadline instead of a time limit.
You may wish to learn more regarding what happens on completion day.
What impact has coronavirus had on getting a mortgage?
The global pandemic has severe affected the mortgage industry. While the housing market is currently going through a mini-boom, mortgage brokers and lenders have had to change lending criterion and how they process mortgage applications at the same time when facing internal staffing problems.
If you are on furlough, there may be further delays in the mortgage application process. While some lenders will require a letter from your employer with a return to work date, others are not taking furloughed applications at all.
Many mortgage lenders ask for further documents to ensure that you are financially stable even if you aren't furloughed. Some mortgage lenders are not even considering bonuses and overtime when determining how much you can afford.
It will take longer than usual to process mortgage applications.