Exact Answer: 2 to 3 Weeks
A mortgage application is an application sent to a financial institution for the mortgage of any asset. The person sending this application might need money and if they have an asset of that value, they can mortgage it with the financial institution. In this process, the applicant has to submit the real documents of the ownership of that asset against which they will get money.
The asset can be either any vehicle, house, jewelry, or land. If the person fails to repay the amount, the asset will be seized by the bank and sold in the open market to recover the loss. The approval of the mortgage application follows a rigorous mechanism by the bank to ensure only the persons who are capable of repaying the loan get it.
How Long Does A Mortgage Application Take To Be Approved?
|Characteristics of the Applicant||Approval Time|
|An applicant with an unblemished credit record||48 to 72 hours|
|An applicant with an average credit record||2 to 3 weeks|
|An applicant with a patchy credit record||2 to 3 months|
Not all applicants for a mortgage loan from a financial institution are the same. They differ in their financial standing and ability to pay in time. All applicants for this purpose can be divided into three basic categories based on their past credit records.
The first category of applicants is those who have an unblemished credit record. These people have been diligent and disciplined in their financial transactions and have always repaid their past debts in time. Mortgage applications from such people can be approved by the financial institution in 48 to 62 hours or 2 to 3 hours.
The next category of applicants is those with an average credit record. They have paid some of their debts on time while sometimes they might have defaulted on some. These mortgage applications are approved within a couple of weeks.
The third and last category of applicants is those who have a patchy credit record. They cannot be completely relied on and some applications may be rejected. If approved, approval of applications from such people usually takes a few months.
Why Does A Mortgage Application Take So Long To Be Approved?
A mortgage application can be approved only after proper scrutiny. A financial institution cannot lend credit to people with dubious and patchy credit records and it has to be aware of that.
If credit issued by the financial institution turns bad, it will negatively impact the financial institutions. This will, in turn, have adverse effects on the further credit lending capacity of the institution. Several people depend on those institutions for credit but if they are issued without any checks on balances there may be a financial emergency in the economy of the country.
To mitigate the chances of such events, it is in the best interests of all, that the only best people suited for such loans get approved. In this process, proper scrutiny of financial documents holds a big say. Such proper scrutiny serves as a cautionary tale informing the financial institution about the financial status of the applicant.
The credit record is an important part of the scrutiny of monetary documents. It describes the economic dealings of the person and their ability to use the loan for productive purposes. The credit record also tells whether the person has taken any loans before this and was they able to pay that on time. This is a major factor that determines whether a mortgage application will be approved or not.
The negotiations regarding the terms of the mortgage also consume a good amount of time. Only when both parties reach a point of acceptance, the mortgage application is approved.
Approval of a mortgage application is a strict process and is aimed at giving loans only to those who are capable of repayment. The time required for the approval of a mortgage application immensely depends on the credit report of the applicant.
If the person has an unblemished credit record, their loan might get approved within a few days. However, people with average credit records need to wait for 2 to 3 weeks to get their application approved. Moreover, if the credit record is patchy, it might be rejected or accepted after a strict inquiry lasting for months.