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How long does a mortgage application take to be approved?
A common question when people are taking the mortgage is ” how long will it take to be approved?”
It is understandable because people are always keen for their application to be approved quickly so they can be certain that the process is going ahead.
People are also enthusiastic about getting the keys to their new home.
The trouble is, answering that question accurately is difficult as there are a number of variables that can cause a mortgage offer to be delayed.
For instance, on a residential mortgage, the lender will need to get a full idea of your income and outgoings.
As a result, they will often ask for payslips and bank statements to underwrite the income.
This can lead to other questions regarding transactions on your bank statements, where there is delay in waiting for an underwriter to assess your answers.
A property valuation of some sort will also be needed.
It may be that the surveyors are able to value the property from the desktop, or by driving past. If so, this will usually speed the process up.
If, however, they need to go and inspect the property in person by going inside, the date of the appointment will be based upon the availability of the surveyor and the access to the property (for instance, if tenanted, they will need to be granted access).
With all of these things to take into consideration, this can cause the mortgage application to drag on.
Application to offer
To try to give an estimate of the average application to offer time for a residential mortgage application to be approved, it is usually around 2 to 3-weeks assuming the case is fairly straightforward.
Lender’s service levels can fluctuate month by month depending on their own resources, and the amount of business that is coming in. This means that a mortgage application with one lender may take twice as long to agree, due to their own pipeline.
Your mortgage adviser may be able to get an idea of which lenders are generally offering mortgages quicker, based on recent experience.
Each application is however different so a lender that is often quick, may not be so if your case is more complex.
Ask your mortgage adviser for their expected timescales so they can do their best to guide you.
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How long does bridging finance take to be approved?
Bridging loans are designed to be approved quickly. This is why they are used for purchases where there is urgency in the transaction, such as auction properties.
Even so, depending on what the bridging lender needs, and the application itself, there can still be delays.
For example, if the property requires a special type of report for the lender to agree the lending, this may hold things up.
Having said that, on a straightforward bridging finance application, formal offers from the lender can sometimes be issued in a matter of days.
For a bridging loan broker to know how long you should expect to wait based on your circumstances, make sure that you give them a full overview of your situation and the property itself.
Most bridging loan brokers will be a Member of the National Association of Commercial Finance Brokers.
How long does a commercial mortgage take to be approved?
Commercial mortgages are complex and there is often a lot of information required for the lender to make a decision.
If the property is to be bought and occupied by the applicant, they would need to get a clear idea of businesses financials to ensure they were able to make the mortgage payments.
If it is being bought to rent out to another company, the lender will need to know details of the prospective tenant and their business financials.
The average time for a commercial lender to agree a mortgage offer is around 6 to 8 weeks.
However, different commercial lenders have their own timescales, so this may be quicker or slower depending on the scenario.
A commercial mortgage adviser would be able to find out your preferred completion time, and to look for a lender accordingly.
They would not be able to guarantee the outcome due to underwriting processes being beyond their control.
How long does a buy to let mortgage take to be approved?
If a buy to let mortgage application is relatively straightforward, lenders often release mortgage offers quicker than that of a residential mortgage lender.
For some buy to let lenders, they are most concerned in the property itself, the amount of rental it will generate, and the applicant’s deposit.
If the surveyor can gain access to the property quickly, and the lender does not require much other information, 2-weeks is a realistic timescale to get a mortgage offer.
Again, this will depend on the lender’s service levels at the time, the complexity of the case (for example, if there are multiple sources of income or adverse credit).
If the application is for a portfolio landlord, or a specialist lender is needed, this can slow the process down.
In instances where there are lots of properties, commitments, income to be assessed, adverse credit, etc, the underwriting process can easily go on for 4 weeks or more.
Your mortgage adviser will be able to give you a better idea of expected timescales based on your individual case.
How long does an adverse credit mortgage take to be approved?
Lenders that accept adverse credit often take longer to agree mortgage applications.
They need to look at the full situation of the client and gain an understanding as to why the adverse credit took place.
Given the lenders that accept severe adverse credit, they are usually of a specialist nature and do not have the same resources for underwriting applications as quick as a high street bank.
An average time for an adverse mortgage to go through to offer stage is around 3 to 4 weeks.
Depending on the lender, and service levels at the time, you may be pleasantly surprised.
Your mortgage adviser should be able to give you an idea of how long a mortgage is expected to take with an adverse credit lender.
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Every mortgage application is unique and the time taken to get an offer out will be linked to the complexity of your case, and the lender’s current service levels.
Lenders will not guarantee how long it will take them to underwrite your mortgage, so make sure that you have plenty of time for an offer to be agreed.
Different transactions (for example, bridging loans) may be agreed in a short time if the case is straightforward.
It would be recommended to ask your mortgage or bridging loan adviser what the expected timescale is forgetting a mortgage offer out.
They may be able to give you a clearer idea depending on lender’s service levels.
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