How Long Does a Mortgage Application Take?
Applying for a mortgage is a long, complicated process. It requires a lot of moving parts to come together, with a lot of approval processes needed. How long does a mortgage application take, and what can you do to speed up the process? The experts at Vision Property and Finance weigh in below;
What’s Needed For a Mortgage Application?
A mortgage application is essential for documenting your financial capability to pay back a loan to a financial institution. Included in this application, you need to submit necessary documents that support your claim, such as proof of income, expenses, and liabilities. These could include:
- Pay slips for the last 6 months
- Evidence of other income sources, such as investment returns
- Credit card, HECS, car loans or any other documents that show your current debt position
- Evidence of savings and expenses
- ID Documents, such as birth certificates, drivers license and others
Alongside these forms, you may need to collect parental guarantor documents, forms for other co-signatories on the lease and more.
Ensuring that these forms are appropriately gathered and given to the right people is up to the borrower. So if you need your mortgage application sorted ASAP, you’ll need to get on top of this step.
After these forms have been submitted, a financial institution should take roughly 3-5 days to assess that these forms correctly depict your financial situation.
How Long Does the Lender Take?
Firstly, an approval process will take place. The length of this depends on multiple factors. If your loan application is more risky, it will require a deeper analysis and approval process by multiple persons within the financial institution. This could be the case if you are borrowing more than 80% of the property value, borrowing more than $2 million or if there are any other risky variables with your loan application. This could take up to 24 days, however it does also depend on how busy banks are during your application period.
Vision Property and Finance Newcastle Director, Hamish Ferguson states that
“Whilst banks are all processing documents at a different speed, the general trend is that applications are getting processed quicker than they were at the beginning of the year. They’re roughly coming in about five days earlier.”
After this period, if successful, you will be granted a pre-approved loan amount. With this amount you can select a property that you would like to purchase with the loaned amount. Following this the lender will need to do a property valuation. Depending on the lender, this may just be a process of cross referencing the chosen property with its address. This process should not take more than a 1-2 days. However if the lender needs to do a formal property valuation, this can take from 5-7 days.
Following this, you will be given a formal approval. Once signed, the bank should take roughly 2-7 days to get these loan documents together. This should be arranged in conjunction with the contract of sale to speed up the process.
How Can I Speed Up the Mortgage Application Process
- Ensure that you provide the right documents at soon as possible
- Use a mortgage broker to best navigate timelines and the approval process
- Apply for a safer loan amount to reduce approval processes and application time
- Sign and return documents as quick as possible
Do you need a mortgage application sorted as quick as possible? Don’t need any additional expense? Our experts at Vision Property and Finance have had over 20 years of navigating lenders and the application process to make it as quick and easy as possible for the borrower. The best part is that the banks cover all of our service fees, so you don’t pay a cent!
Get in touch with one of our award winning brokers here!