We often get asked how long it will take for a mortgage to go through. This is not just from clients with adverse, it can be for any type of application. But for this post I will concentrate on how long it takes to get a mortgage with adverse credit.
The honest answer is that it really does depend on your application. That means it depends on the complexity of your situation, it depends on the lender we go to and it depends on the time of the year. I will break these down and explain how they can affect your application.
Complexity of your situation
You may think your situation is complex because you have adverse. However, there are many different levels of adverse. One of the examples I will go through below was a couple who had 6 Defaults. Some of those were duplicated when sold to the debt collection agencies. The defaults were all 12-18 months old and all were registered within a 6 month period.
From that we can gather that something happened around that time and it was a one off event. Thats what the credit report suggests.
I have had other cases where the clients went into an IVA. The IVA failed and then they had to go bankrupt. That was a much more difficult situation. Most people fall somewhere in between.
We need to look at the credit report and have an understanding of what has happened. We also need to see if there are any other potential issues with your application – something with your job, affordability etc etc. This is why we get a factfind so we can get everything down on paper.
The lender and the time of year
I have grouped these together as lenders can go through good and bad spells. They all have Service level agreements (SLAs) but these SLAs can fluctuate depending on how busy they are. They can vary from 24 hours up to a week in general. And that would be each time they have to loop at your application.
For example, application goes in and you are asked to include various documents. SLA maybe 2 days. 2 days later, they assess the application and documents and require further information – that would then be another 2 days from when the information is provided and that would happen each time they have more questions.
Part of our job is to try and pre-empt the additional questions they will raise to get it from start to finish as quickly as possible. The last thing we want is to be going back and forth.
Getting back to how long it takes
The answer is there is no definitive time frame. However, we submitted an application earlier this month. The application went in at 1.26pm. It has received its initial assessment at 4.58pm where they instructed the valuation. They came back and asked for one additional piece of information, nothing major which we provided at 5.10pm and that had been accepted by 5.30pm.
Within 4 hours we had gone from application going in, to agreed subject to valuation! That is quicker than a lot of the high street.
However, I think it is important to say that that is the exception rather than the rule.
In general I think it is fair to say it takes much closer to 5-8 working days until we get to the point where they are happy to offer the mortgage subject to the valuation coming back ok.