Things to consider in the mortgage market
If you're mortgage hunting, how will you choose which bank or building society to go with? The one with the lowest-rate mortgage? A lender that doesn't charge high upfront fees? Or one that can process your application quickly?
In the good old days before the credit crunch, some mortgage lenders could approve mortgages in no time at all.
But if you apply for a mortgage today, it could be a slow process. Mortgage lenders are asking more questions and checking more documents than they used to. On top of that, they're also preparing for the introduction of tighter regulations in April following a lengthy review of mortgage lending decisions by the regulator, MMR (mortgage market review).
Tighter rules, more questions
These tighter MMR rules mean changes to a lender's IT systems, more staff training or both, says James Cotton, mortgage specialist with London and Country mortgage brokers.
Not only are applications taking longer, but some lenders are playing a game of cat-and-mouse to make sure they're not overwhelmed by demand.
Prepare in advance
If you're going to apply for a mortgage, and especially if you're buying where time is of the essence, ask your broker or mortgage lender for a list of documents you'll need to supply in advance.
What you'll need
You will need to supply proof of identity, the last three months' bank statements (make sure online statements clearly show the bank/building society, your account number and name), the last three months' wage slips (12 if you're paid weekly) or a form called SA302 if you're self-employed.
Get a list of documents you'll need before you think of applying for a mortgage. If you're house-buying rather than remortgaging, ask your broker (if you're using one) how long applications are taking before you apply to a particular lender. It could save a lot of stress further down the line.