How Long Does It Take to Get a Loan Approved?
10Feb

How Long Does It Take to Get a Loan Approved?

Buying a property can feel like a juggling act, with so many timeframes, requirements and jobs to keep up in the air in order to buy your house. There are numerous parties involved in the process, which makes it even more difficult to coordinate. 

While the process can vary widely and is very dependable on personal circumstances, here are some guidelines on how long a loan approval might take. 

 

What are the steps to get approved?

There are many requirements you’ll need to meet before moving onto the next stage, with a final approval being the end goal. The usual process is as follows:

Pre-approval is usually obtained anywhere from instantly to four weeks, but it isn’t binding on either party. You can use pre-approval as an idea of whether you’d be approved, how much you should be able to borrow, and your future mortgage repayments but you can’t use it to make an offer on a property. 

There are a range of pre-approvals, from a quick online application to a formal document. A pre-approval is not reliable without being written and signed by the lender, and even then might come with hidden clauses. 

Conditional approval generally takes 2-3 days, and comes after you submit your application form and supporting documentation. The lender will assess whether you can pay the loan. If everything is in order, your approval will now only be conditional on the property you choose. 

A conditional approval allows you to negotiate with sellers with confidence. For a conditional approval, you’re likely to need:

  • Acceptable forms of ID
  • Payslips for the past six months
  • Evidence of your savings or deposit
  • Statements that outline your current debt

Most often, pre-approvals or conditional approvals are valid for 90 days. 

Once you find a property and make an offer, the bank will also need a valuation, which can take time. 

Full approval normally takes 5-7 days more, and comes after your application and the property have been approved. The bank has all the information they need, they formally decide to lend you the money, and they confirm it in an official letter. Other than clearing up loose ends such as making sure they have all the correct documents; you are ready to purchase the property.

If the property currently has tenants it might increase the amount of time, and a valuation will usually be undertaken before full approval is given. Once you have made an offer on the house and it has been accepted, there might be a period of 1-3 weeks to get your deposit and finances ready to go. 

When all the pieces have fallen into place, you will be offered a contract to sign. Once it has been returned and checked by the lender, you will receive the funds, and a letter confirming the details of your home loan, your repayment amounts, fees and the repayment schedule. 

 

How long will approval take?

In perfect, uncomplicated circumstances where the interested buyer has all the correct paperwork ready to go, there’s a suitable property to purchase and there are no other issues, final loan approval generally takes around 4-6 weeks. 

There are several factors which can delay a loan:

  • Paperwork. Not having the correct paperwork is a very common cause of delays. Finding out which documents you need, tracking the correct ones down and then returning them for processing all takes time. At each stage, it’s a great idea to ask what documents you’ll need to move forward. 
  • Complexity. If you have an application that is more complex than usual, such as consolidating debt or applying with more than one person, it can make the application process take longer. 
  • Professionals. Waiting for other professionals can take time – trying to meet with a solicitor, waiting for a valuation, and hearing back from a conveyancer can all potentially delay the process. 
  • Loan popularity. If the lender has many applications to process, it could take them longer to get to yours. 

Once the lender has certified that all of your documents are in order, they can then advance the loan funds. For a new purchase, they will let your solicitor or conveyancer know that the funds are available. Your conveyancer will then book in a settlement date and time with the lender.

 

Speeding up your purchase 

Your home loan approval is a complicated process, involving many different parties. You’ll need to tick a lot of boxes before you can actually call that property yours. 

While some delays are out of your hands, there are some simple things you can do to ensure that the process goes as smoothly as possible. Chatting with a knowledgeable broker or lender armed with plenty of questions is a great way to find out what you need to know beforehand. 

Preparedness is everything. Use the information gained from experts to be prepared when it comes time to move onto the next stage. That might mean hunting out documents now, researching a solicitor, or a number of other tasks. 

Juggling your application process and putting an offer on the perfect property can be tricky. Do as much of the work beforehand as you can, and you should find that the process goes as smoothly as possible, getting you into your new place in the shortest amount of time. 

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