Why you need to give yourself enough time if you want the best mortgage deal

Research from Zoopla earlier this year revealed that it took an average of just 50 days to sell a house in the UK. Properties in Scotland sell in just 39 days while it takes just seven weeks to sell the average West Midlands home.

So, if you’re buying a property, you may well need to move fast if you want to beat off competition from other buyers. This often means ensuring your mortgage is in place quickly in order that you can exchange contracts.

However, getting your mortgage arranged quickly could result in you missing out on some of the very best deals. Recently, mortgage brokers told Financial Adviser that the speed at which a lender can turn around a mortgage application often played a ‘huge part’ in their recommendation, particularly if the client was working to a tight deadline or is in a bidding war for a property.

Lenders with good service not always the cheapest

If a lender offers an excellent interest rate that features prominently in ‘best buy’ tables, it follows that they can expect to receive an increased number of applications for that product.

Consequently, the number of applications to process rises, often adversely affecting the time it takes to underwrite and process an application.

Many of the banks with the biggest backlogs of mortgage applications are those offering the best rates. The result of this is that the lenders who can be relied upon to process an application quickly are often not the ones offering the cheapest or most suitable mortgage products.

It can mean buyers who need a speedy loan have to turn to a lender offering a less competitive rate, but more able to process the offer swiftly. Consumers could end up paying hundreds of pounds more because the cheapest lender was unable to meet their exchange or completion deadline.

This June, the Mortgage Lender Benchmark Assessment surveyed brokers on the service and propositions offered by lenders in the first six months of this year and pinpointed which mortgage providers brokers were most likely to turn to on an everyday basis.

The report showed that ‘speed to completion’ was the most important factor on whether an intermediary would recommend a lender for both the first half of 2019 and the latter half of last year.

Mortgage broker Alan Lakey says that it is a ‘real issue’ that consumers are forced not to choose the best deals in the market purely because of a lender’s processing speed.

He says: “I have had clients lose properties because of slow processing speeds in the past, so it’s a real fear and brokers make the decision based on a real risk.

“In an ideal world, we would be able to get a client the cheapest deal and not have to pick and choose based on their application time.”

Remortgage delays can also cost you

Any delay in processing your mortgage application could cost you dearly if you’re in a bidding war for a property or you need to move quickly.

Delays to the processing of your application could also leave you out of pocket if you are remortgaging.

This is because any delay could mean you have to stay on your lender’s rate for longer than anticipated. If you’re on your lender’s Standard Variable Rate (SVR) then you could end up paying significantly more.

Read: 3 reasons you should consider a remortgage

How a mortgage broker can help you to get the best deal

With the right planning and help, it is possible for you to benefit from the most appropriate mortgage deal, and to get your offer in place in plenty of time.

The first factor to bear in mind is that, since changes to mortgage underwriting rules, lenders now undertake more checks as part of the application process. Working with a broker can help you to ensure that all the documentation you’re likely to need is prepared so there are no ‘back and forward’ delays when it comes to underwriting your application.

Additionally, a broker can work with you to agree your mortgage in principle with your chosen lender in advance of you agreeing a purchase. They can have your application lined up and ready to go, so it is simply a case of pushing the button on your application once your offer is accepted.

Another reason to use a mortgage broker if you’re worried about completing in time is to benefit from their market and lender knowledge. A good broker will know which lenders are likely to be able to turn around your application in time, and so can recommend both a suitable product and a lender that’s likely to conclude the deal.

Without a broker, you may end up applying for a mortgage with no idea how long it might take to complete, increasing the chances that you’ll lose the property.

Finally, a broker can help manage the underwriting process. Many brokers have close relationships with mortgage lenders and direct access to the underwriting team. This means they are in an excellent position to chase paperwork and to proactively manage the process to ensure your offer is received in time.

Get in touch

Do you need help in finding a lender that can help you meet a tight deadline? Get in touch. Email enquire@london-money.co.uk or call (0207) 808 4120 to find out more.