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Mortgage Process Timeline

09/12/2019
(Last Updated: 14/04/2023)
1,674
9 min read
Key Takeaways
  • The mortgage process timeline involves three stages - decision in principle, valuation and offer.
  • Your application can be withdrawn at any stage if your circumstances change for any reason.
  • You will be responsible for paying for the mortgage valuation, which is done for the lender's benefit. This is meant to settle if the property is worth as much as they're willing to lend you.

What is the mortgage process timeline? If you don't have enough money to buy a home with your own cash - and most people don't - you'll need to secure a mortgage loan. Following the mortgage process steps, you need to apply to a lender for one and you should expect questions about your financial affairs, as well as to be able to produce evidence that you'll be able to pay the loan back.

If your application is successful, three stages follow before you are granted your loan. These are:


A decision in principle is a non-binding estimate of how much the lender is willing to lend you. This is based on your annual income and a preliminary credit check. Most banks will only do a 'soft' credit check at this stage.

The benefit of a decision in principle is it confirms what the bank will lend you, based on your deposit and income - most commonly your salary, but pensions, property income and share income is taken into consideration.

This article explains what happens at each of the three stages and offers tips and guides on how the mortgage application process timeline works, so that you can go through it as smoothly as possible.

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    1

    Apply for a mortgage agreement in principle

Once you have chosen a mortgage lender, you'll first need to apply for a mortgage in principle. If you are successful, your lender contacts you to tell you that you've received a mortgage agreement in principle. This stage can take anywhere from a couple of hours to 1-3 days.

You may think that the mortgage application process is over, however, this is only the first step completed in the mortgage process timeline and you are still a few weeks away from getting your mortgage offer.

A Mortgage in Principle is when a lender tells you that it is prepared to lend you, in principle, a defined sum, towards buying a property. It is 'in principle' because the lender then has to value any property which you have an offer accepted on, to decide whether the home is worth the money that is asked for it. It's dependant on your household income, as well as affordability based on the Mortgage Market Review criteria.

If you are getting a gift or a loan from a parent or friend then you need to declare this to your mortgage lender at the earliest stage possible, as it could affect whether they will lend to you or not. If you aren't sure whether the money is a gift or a loan then read our article - Is it a gift or is it a loan?

What should you do after receiving a Mortgage in Principle?

You are now able to move on to the next mortgage process steps and look for properties you like and are able to buy, all limited to the sum the lender has offered you in principle or your own resources. Once you have found a property you like, you put in an offer to the vendor. Once you've had an offer accepted - congratulations! - you then book your Mortgage Valuation.

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    2

    Book your Mortgage Valuation

You must pay for the mortgage valuation with your mortgage lender, in which your lender sends a surveyor to the property to inspect it, to see if its value is consistent with the sum the lender is prepared to offer you.

If the lender decides, after the surveyor has delivered their valuation report, that the property is not worth the money or it has defects, it may either refuse to lend you the money on that property or set conditions which you must fulfil if they are to lend. It might, for example, stipulate that you have to carry out, at your expense, a Pre-Purchase Survey to examine an issue it has found.

Issues can include subsidence, radon gas or drainage problems. Once again, if this survey indicates many problems, the lender can refuse to lend on the property.

Is a Mortgage Valuation the same as a home buyers survey?

No, the valuation is done purely for the lender's benefit and focuses mainly on establishing a property's market value. The latter involves you booking a surveyor, who works on your behalf, to establish if the property you've set your heart on has any defects. If there are, you can bargain with the vendor to contribute towards or even pay all of the costs of remedying any issues or even choose to pull out.

We always advise you to get a house survey. You are probably about to spend the largest sum of money you've ever spent in your life and ideally need an expert opinion on whether your property has any issues which might prove exorbitant to fix further down the line.

If you need a RICS Building Survey or HomeBuyer Report then call our team now on 0333 344 3234, or:

RICS Surveyors | Fixed Fees | Same week availability | Access arranged

At what stage does a mortgage get rejected?

Once your mortgage valuation survey has taken place and the surveyor has returned their report to the lender, the lender either agrees to grant you a mortgage, tells you that it will grant it under certain conditions or refuses to grant you the loan for that property, in which case you can either appeal or look for a fresh home to buy.

At this stage of the mortgage application process timeline is when you usually gets rejected. However, please note that you can get rejected at any stage and that your offer can also be withdrawn, should your circumstances change in any way.


    3

    What is the process of getting a mortgage offer?

If a lender is satisfied with the Mortgage Valuation report, it then tells you and you receive your Mortgage Offer. This is a highly important stage which you must reach before you can exchange contracts with the vendor. Unless you are a cash buyer, a seller will pull out of dealing with you if you can't prove that you will be lent enough cash to cover the agreed purchase price.

The mortgage offer is unlikely to be rescinded, unless it is found out through the conveyancing process that there is a legal issue or if any of the information provided to the mortgage lender is incorrect.

The solicitor acts for the mortgage lender and satisfies their requirements, which are shown in the mortgage offer and also the Mortgage Lender's Handbook.

Mortgage lenders will also require you to buy property searches before they agree to give you a mortgage. What searches they require are also set out in the Mortgage Lender's Handbook.

Usually, the mandatory searches are Local Authority, Environmental, Chancel and Water & Drainage Search. In some cases, you might be asked for additional conveyancing searches.
 
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Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
Reviewed by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

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