The average time it takes for a mortgage application to be processed in the UK is between 18 to 40 days. The exact timeline depends on the lender, mortgage product and circumstances of each home buyer.
Compare My Move can connect you with up to 6 verified conveyancers to assist with the legal side of the home-buying process.
This guide covers the mortgage application process step-by-step so that you’re prepared to begin the house-buying process.
How Does the Mortgage Application Process Work?
Before looking for a property to buy and applying for a mortgage, it's important to consider how the process works. This includes understanding your own budget, choosing the right lender for you and knowing what you need to prepare.
Below we’ve listed how the process works and what documents or checks are typically needed when applying for a mortgage. Keep in mind that your mortgage application can be rejected at any stage of the process.
Work Out Your Budget
Before looking at houses and starting the mortgage application you can work out your budget. This will depend on how much you can afford to pay in mortgage payments each month, and how much you’ll be able to borrow as a mortgage. This will also depend on how much deposit you are able to pay upfront.
Find a Mortgage Broker
Although this is not an essential step, there are a number of advantages to finding a mortgage broker. With thousands of mortgage products on the market at any point in time, an independent mortgage broker or adviser can help you explore a wide range of mortgage options suited to your circumstances.
Decide on a Mortgage Lender
If you decide not to use a mortgage broker, you could research various lenders yourself. You are in no way obliged to take out a mortgage with the establishment you currently bank with, although this can be a popular option for some budding buyers.
Get a Mortgage Agreement in Principle
A mortgage agreement in principle is a way to find out how much a particular lender might lend you to buy a property. You can apply for a mortgage in principle with a bank, building society or through a mortgage broker. An agreement in principle will indicate to sellers and estate agents that you are serious about buying a property.
Prepare for the Formal Mortgage Application
An Agreement in Principle is not a formal mortgage offer and does not guarantee you a mortgage. You can submit a formal mortgage application after being granted an AIP by a lender.
Just as with the AIP, you'll need to provide details of your income and outgoings for your mortgage application. You may have to provide details of the property you are looking to buy. The lender will use the information you provide to carry out an affordability assessment.
Property Valuation
The property valuation is a key part of the application process and many mortgage lenders will require a valuation to be conducted on the house. This can reassure the lender that the house is worth the purchase price and ultimately, the amount they are lending.
The Underwriting Process
After receiving your official mortgage application, your lender‘s underwriting team will review all documents supplied. They will take into account your income, all outgoings and financial commitments and how much deposit you’re putting down. Once a decision has been made, you will be supplied with a formal mortgage offer.
Compare Mortgage Brokers
Accredited mortgage brokers
Used by over 1.5 million movers in the UK
Reviewing Your Finances and Credit Score
Your credit score can be affected by a number of factors, some of which may come as a surprise to you, especially if you’re a first-time buyer. The amount you have moved in recent years can lower your credit score, as being registered on the electoral roll is often used by lenders to verify your address and identity.
Having a credit card which is used responsibly and paid off in full can also contribute to a positive credit score. This shows that you can and will pay back what you owe and that you handle money responsibly. This may help demonstrate responsible borrowing, which lenders often take into account. However, a credit card which is left unused can count against you.
Furthermore, large amounts of debt or a payday loan taken out in the last few years will also count against you.
How Long Does It Take to Get An Agreement in Principle?
An Agreement in Principle (AIP) can be obtained on the same day you apply for it, providing it is successful. During the first meeting with your chosen mortgage lender, they may be able to provide you with an AIP, giving you an idea of how much you can borrow.
At this time, the lender will want details of your finances (including your credit score) and your employment, such as how long you've been in your current role and evidence of payslips. They may require further information on your employment if you are not working 'regular' hours and terms, such as those looking to get a mortgage on a zero-hour contract. This will also be the case if you are self-employed.
Banks will be able to provide an AIP with no charge and no obligation to apply for a mortgage with them. Some may allow you to apply for an AIP online, without affecting your credit score and again, without obligation to choose them as your mortgage lender.
It’s important to note that a mortgage agreement in principle is not a formal mortgage offer and does not guarantee a mortgage. The lender has no obligation to honour an agreement in principle and can refuse you a mortgage if your circumstances change.
Agreements in principle are usually valid for up to six months, depending on the lender. After that, you can reapply for an AIP.
Compare Mortgage Brokers
Accredited mortgage brokers
Used by over 1.5 million movers in the UK
How Long Does the Underwriting Process Take?
The underwriting process can take anywhere from a few days to a few weeks to complete. Upon receiving your application, your chosen mortgage lender‘s underwriting team will review your income, financial commitments, outgoings and how much deposit you’re putting down.
Financial commitments and outgoings will be considered as a marker for how much you spend on average. This gives the lender an indication, alongside your income, of your relationship with money and whether you will be comfortable to make your mortgage repayments.
How To Speed Up Your Mortgage Application
As mentioned above, being as prepared as possible and providing as much information as possible, such as bank statements and wage slips, will help speed up the mortgage application process.
To prepare for a mortgage interview with your lender, it would be worth checking your credit score online.
Reviewing your credit score beforehand allows you to see where you stand and how you can improve your score prior to your official application. As we’ve mentioned, it could be something as simple as being on the electoral register.
Some homebuyers will opt to use a mortgage broker for their mortgage application, which can sometimes speed up the process. However, your own bank will already have an idea of your financial history, which may speed up the process, depending on your situation.
How Long Is a Mortgage Offer Valid For?
Most mortgage offers are normally valid for 6 months, to account for how long it takes to buy a house, from offer to completion. The property purchase can be completed during the time the mortgage offer is valid.
In the event your offer expires, most bank and building societies will let you renew your offer, understanding that a property purchase can often be lengthy and complex. You may be able to reapply, but lenders are not obliged to extend the offer.
