The Mortgage Application Process: Offer to Completion

The Mortgage Application Process: From Offer to Keys

The estate agent rings. "The seller has accepted your offer." Great call to get. Then, usually within a day or two, the agent sends round the memorandum of sale and asks for your solicitor's details and who's arranging your mortgage.

Now two things run side by side: your full mortgage application with the lender, and the legal work with your conveyancer. People are often surprised how long it takes. Many purchases take somewhere around two to four months from offer accepted to completion, and longer if you're in a chain, buying a leasehold flat, or the searches are slow. Nobody can promise you a date at the start.

This guide follows the process in England and Wales. Scotland works differently. For one thing, the seller provides a Home Report there, which includes a valuation.

The Timeline: What Happens When

This is the usual order. Timings vary a lot, so treat it as a rough guide, not a schedule.

Stage 1: The Formal Mortgage Application

If you got an agreement in principle, the lender has already had a quick look at you. Now they want proof. You don't have to stay with the same lender, by the way. Plenty of people get an AIP with one and apply with another.

What You Need to Provide

Every lender asks for something slightly different. Expect most of these:

• Recent payslips. Some lenders want just the latest one, others three months, and more if you get overtime, bonus or commission
• Bank statements, anything from one month up to six depending on the lender and your circumstances
• Proof of where your deposit is coming from, such as a savings statement
• A gifted deposit letter or form if family are helping (see our guide to gifted deposit letters)
• Photo ID and proof of address, if the lender can't check you electronically

Self-employed? The lender will usually want your latest two years of HMRC tax calculations and tax year overviews, or a certificate from your accountant. Our self-employed guide goes into this.

The Credit Check

At full application the lender runs a hard credit search, which other lenders can see. One is normal. What causes trouble is new credit between now and completion. A car on finance or a new credit card changes the lender's sums, and some lenders check your file again before releasing the money. Keep things boring until you have the keys.

Stage 2: The Valuation

The lender needs to know the property is worth what you're paying, because it's their security for the loan. This valuation isn't a survey, it won't tell you whether the roof needs work, and you may never see the report. For the condition of the house you need your own survey. Our house survey guide explains which one to pick.

What the Valuer Does

It depends on the lender and the property. Plenty of valuations are now done from a desk using local sales data, with nobody visiting. Sometimes a valuer just drives past. Where they do go in, it's usually a short visit, often 15 to 30 minutes, arranged through the estate agent.

What Can Go Wrong

Sometimes the valuation comes back lower than the price you agreed. Say you're paying £300,000 and the valuer says £290,000. The lender works out what it will lend on the lower figure, so you're short. Your options:

• Go back to the seller and try to renegotiate
• Ask the lender to look again, with evidence of similar homes that sold for more. It's their call
• Find the extra money yourself
• Try a different lender, who will use a different valuer
• Pull out, which you can do any time before exchange

Stage 3: Underwriting

An underwriter at the lender now goes through the case. They check:

• That your income matches the application. Lenders aren't allowed to just take your word for it
• Your credit file, and any debts that weren't mentioned
• Your spending, from your bank statements
• Whether you could still afford the payments if rates went up. FCA rules make lenders allow for a rise of at least 1%
• That the valuation supports what you want to borrow

What Can Happen

Either the offer goes out, or they come back with questions (a letter explaining a large payment into your account, say, or another payslip), or they decline. A query sitting in your inbox for a week adds a week to the whole purchase, so answer the same day if you can. If you are declined, don't rush off and apply somewhere else. Find out why first. Our guide on what to do if your mortgage application is declined walks you through it.

Stage 4: Mortgage Offer

Once underwriting is done, the lender sends a formal mortgage offer, and your conveyancer usually gets a copy. It sets out how much you're borrowing and over how long, the rate and type of deal, your monthly payment, any fees and early repayment charges, any conditions, and the date it runs out. That's usually three to six months from when it's issued.

Two things people get wrong. You don't have to take it. And it isn't set in stone for the lender either. They'll stand by it unless your circumstances change or something you told them turns out to be wrong, and they can withdraw it right up to completion if that happens.

Stage 5: Conveyancing

The legal side has been going on since your offer was accepted, and it's usually what takes longest. Our solicitor and conveyancing guide covers costs and how to choose a firm.

What Your Conveyancer Does

• Gets the draft contract and the seller's property information forms
• Orders searches: local authority, water and drainage, environmental, and others depending on where you're buying, such as coal mining
• Checks the title, so they know the seller owns it and what rights and restrictions come with it
• Asks the seller's side about anything that doesn't look right, such as missing planning permission or building regulations sign off
• Reports to you and to the lender. Often your conveyancer acts for the lender as well as you, though some lenders use their own firm

What Can Go Wrong

Searches and questions throw things up. An extension with no paperwork. A right of way nobody mentioned. Most can be sorted, sometimes with an indemnity policy or a price change, but it takes time. Leasehold flats tend to take longer anyway, because information has to come from the freeholder or managing agent too.

Stage 6: Exchange of Contracts

Before exchange, either side can walk away. After it, they can't without serious consequences.

Your conveyancer won't exchange until your mortgage offer is in place and the searches and questions are sorted. You also need buildings insurance from the exchange date, because from then on the property is your responsibility even though you haven't moved in. With a leasehold flat the freeholder often insures the building, so ask your conveyancer. Our guide to buildings and contents insurance explains the difference.

What Happens at Exchange

• The conveyancers formally swap signed contracts, often over the phone
• Your deposit goes from your conveyancer to the seller's. Traditionally that's 10% of the price, but it's often less by agreement
• The completion date is written into the contract
• If you pull out now, you can lose your deposit and face legal action. A seller who pulls out can be sued too

Stage 7: Completion

Completion day. The lender sends the mortgage money to your conveyancer, who pays the seller's conveyancer. Once they confirm it's arrived, the estate agent releases the keys. Nothing happens until the money lands, so ask your conveyancer what time to expect before you book the removal van for first thing.

After Completion

• Your conveyancer sends the stamp duty return and pays any tax due. In England and Northern Ireland that's Stamp Duty Land Tax, and it has to be done within 14 days of completion. Wales (Land Transaction Tax) and Scotland (Land and Buildings Transaction Tax) have their own rates. Our stamp duty guide has the current bands
• Your conveyancer applies to HM Land Registry to register you as owner, along with the lender's mortgage. The register can take a while to update, but you're protected from the moment the application is received
• Your first mortgage payment is usually the following month, and it's often bigger than normal because it includes interest from completion day to the end of that month

Common Timeline Delays and How to Avoid Them

• Missing documents. Send everything with the application.
• Slow replies. When the lender, broker or conveyancer asks you something, answer that day.
• Valuation access. If the valuer needs to visit and nobody can let them in, it waits. Ask the agent to chase.
• Searches. Some councils are much slower than others. Pay your conveyancer for the searches early so they can order them.
• The chain. You can't speed up someone else's buyer, but you can ask the agent regularly where everyone is.
• Your offer running out. If things drag and your mortgage offer is near its expiry date, tell your broker or lender early. Some lenders will extend it, but it isn't guaranteed and you may need to reapply.

You'll hear "we're just waiting on the other side" a lot. Sometimes that's true. Sometimes nobody has picked up the file this week. A polite call to your conveyancer every week or so is fair.

The Short Version

• Many purchases take around two to four months from offer accepted to completion. Chains and leaseholds often take longer.
• Get your documents together before your offer is accepted.
• The lender's valuation isn't a survey. Get your own.
• Avoid new credit or a job change until you've completed.
• Nothing is binding until exchange. After that, it is.