Buying a home can seem chaotic and challenging at times. There are a lot of viewings, checks to go through and that dreaded paperwork that we all hate doing and this is all before the move-in date. To keep you informed and in the know of the processes that have to happen in order for you to move into your dream home, we have written this blog.
If you need to borrow money in order to buy a home, you will need to get your mortgage approved by a lender which can take some time. How long it takes for this application to go through can depend on an array of factors such as checking your credit rating, the results of a mortgage valuation survey and your income and affordability assessment.
If you’re looking for mortgage advice in the UK, get in touch with Weystone today.
Without further ado, let’s discuss the mortgage application process
How does the mortgage application process take?- In short
You should expect to wait around 2-6 weeks for your mortgage application process approval time. It can take as little as 24 hours, however, this is rare as it involves multiple processors and people. The time can vary a lot, so if in doubt, talk to your mortgage advisor.
The mortgage application process
Mortgage in Principle
A mortgage in principle is the process in which the lender will make a statement in writing, saying that they are able to lend you a certain amount to purchase your house ‘in principle’.
This stage is fairly straightforward and quick, as long as you show all the required documents such as a passport, 3-6 months of bank statements and proof of income. You will also need to have picked out a particular mortgage deal.
On your lender’s part, they will ask you for information such as your income, current financial status and will check your credit history, where they will let you know if you have an okay credit score for a mortgage.
After this point, there is still no guarantee that in the future a lender will choose you, but it is useful to show estate agents to prove that you are a good candidate for the mortgage. As well as this, you will be shown homes that are available for the agreed, but not set in stone, loan. If you do get a mortgage in principle, the pace of the application process may quicken once you have found a property you want to purchase, if you are going with the same lender.
Once you have found your home
Once you have found your home, you will then be ready to fill out a mortgage application. This shouldn’t take too long, typically less than one hour. Make sure that you have your finances in order and you have all the documents you need ready for this application.
To see if you’re a fit candidate to borrow money, in regards to your reliability to pay the mortgage back, lenders will need to see some evidence.
This evidence includes:
- Property Details of your possible new home along with information on the seller’s estate agent and proof of your deposit.
- Valid ID such as a passport to prove your identity and your current address, such as a utility bill.
- Three months of bank statements, showing what your current outgoings are, including credit commitments, childcare, utility bills, leisure time, money to savings, pension contributions etc.
- 3 months of payslips to provide proof of income, including bonus’ and overtime. If you are self-employed, you will need to provide accounts and tax returns to determine what you are eligible for.
After your lender reviews the information you have provided, they will carry out a credit check. At this point, they will ask you if they require any further information. If they don’t require anything else, a valuation of the property you are hoping to buy will take place to determine whether it is correctly priced and okay to move forward with the mortgage.
A ‘standard valuation’ for the property you would like to buy is taken (which is required by law). The inspection of the property will include looking for any major issues or defects that could affect the value of the property. This standard valuation will then be reviewed by your lender.
Assuming that your lender is happy with the valuation and all other checks, your mortgage application will be approved and your offer will be set in stone.
If your lender finds that you have purchased the property at a higher price than it is worth, they will inform you. In this case, you can contact the seller and provide the results of the valuation to discuss whether the price of the property could be reduced. If you don’t care about the price of the property and potentially going into negative equity, you can increase the price of your deposit to make up for the potential loss in value.
Thank you for reading our blog about the mortgage application process. If you’re looking for mortgage and insurance advice, take a look at Weystone today.