Dive into the article how long from approval in principle to loan offer in Ireland? The mortgage completion process can take anywhere from three months to six months, or even more.
Before even beginning your mortgage journey, you’ll want to know what lies ahead of you. That’s why we’ve put together this guide, which outlines the mortgage process from beginning to end.
From completing your application to finding your dream home to the conveyancing procedure, we cover all bases. If you’re a mortgage switcher, not all of the below steps will apply to you as you don’t need to go house hunting.
This means your mortgage process will likely be much faster. This is the third guide in our mortgage series, which aims to help you understand everything about the mortgage process.
Understanding the Mortgage Application Process
First and foremost, to start your mortgage journey, you’ll need to complete a mortgage application. It’s possible to go directly to your lender of choice or use a broker, such as bonkers.ie, for your application.
Under the Central Bank’s mortgage lending rules, borrowers must have a minimum deposit in place – 10% for first-time buyers – and typically can only borrow up to 4 times their salary.
After you submit your application, the lender will assess your application and look at a range of factors to determine whether you’re mortgage-ready.
Receiving Approval in Principle (AIP)
Once they are satisfied that you meet the lending criteria, you’ll receive what’s known as Approval in Principle (AIP). Without AIP, you won’t be able to make an offer on a property, so it’s best to try and secure this early. AIP usually is valid for 6 months but can be extended by the lender if needed.
The Role of AIP in House Hunting
With your AIP in hand, you can now begin the exciting process of house hunting. By having your AIP, you’ll be able to demonstrate to estate agents and sellers that you are a serious and prepared buyer, increasing your chances of having your offer accepted. This can be especially helpful in a competitive property market.
Making an Offer and Going ‘Sale Agreed’
Once the stress of completing your application is over and you have your Approval in Principle (AIP) in the bag, you can start searching for the property that best suits your needs and budget. You can browse available homes for sale through estate agents or property websites, such as Daft or My Home.
When you make an offer on a property, ensure you have a letter from your lender showing that you have mortgage AIP, as well as copies of your bank statements indicating you have the necessary funds for the deposit.
Preparing for the Offer
With your AIP and deposit funds in order, you can confidently make an offer on the property of your choice. This is a crucial step in the mortgage application timeline, as it marks the beginning of the loan processing duration and mortgage commitment period.
Accepting the Offer and Booking Deposit
If your offer is accepted by the seller, it’s time to go ‘sale agreed’! At this stage, you’ll be asked to provide a booking deposit, which holds the property at the agreed price until you receive the full loan offer from your mortgage lender.
This booking deposit is an important part of the lending criteria fulfilment process, demonstrating your commitment to the purchase.
Engaging Professionals: Solicitor and Valuation
As you move forward in the mortgage application process, it’s time to engage with two essential professionals: a solicitor for conveyancing and a property valuer. These steps are crucial in ensuring a smooth and successful transaction.
Appointing a Solicitor for Conveyancing
To handle the legal work involved in buying or selling a property, you’ll need to appoint a solicitor. Your solicitor will review the property’s paperwork, ensuring that there are no existing mortgages or other issues that could complicate the transaction.
They’ll also handle the transfer of the property’s title to your name, guiding you through the complex legal process. Engaging a solicitor at this stage is a vital next step after approval in principle and a key part of the mortgage application timeline.
Property Valuation and Pre-Purchase Survey
Your lender will need a property valuation to assess its value and decide on the loan amount. It’s advisable to conduct an independent survey to uncover any hidden issues.
By following these steps, you can progress towards completing the purchase of your new home, ensuring you meet lending criteria and fulfill the mortgage commitment period.
Formal Loan Offer and Loan Pack
Once the lender is satisfied with the valuation, they will approve your loan for the property and you will receive a formal letter of offer, outlining the details of your mortgage.
Your letter of offer will include information about the value, length, cost and repayment schedule of the mortgage, the address and description of the property to be bought, and any terms and conditions which apply to the offer.
Details in the Loan Offer Letter
The loan offer letter is a crucial document that provides you with the specifics of your approved mortgage. It will detail the loan amount, interest rate, repayment terms, and any additional requirements or conditions set by the lender. Carefully reviewing this letter is an important next step after receiving approval in principle.
Reviewing the Solicitor’s Pack
Along with a copy of the loan offer letter, your solicitor will also receive the solicitor’s pack. This is a set of documents they must complete to finalise the legal aspects of your mortgage and property purchase.
You should arrange to meet with your solicitor as soon as possible once you have received your loan offer to ensure a timely loan processing duration and mortgage commitment period.
By carefully reviewing the loan offer and working closely with your solicitor, you can ensure that the lending criteria fulfilment is met, paving the way for a smooth and successful completion of your mortgage application.
How Long From Approval in Principle to Loan Offer in Ireland?
When you have your approval in principle (AIP), it’s usually recommended to start bidding on properties. This is because you can only really make an offer on a property if you have your AIP in place. Don’t attempt to bid without it, as you’ll likely be disappointed – the mortgage application process can take some time.
Typical Timeframes for AIP
Once you’ve submitted your mortgage application, you should typically reach the AIP stage within 6 to 8 weeks. This timeframe can vary, however, depending on how busy the banks are. It’s best to set your expectations accordingly.
Factors Influencing Loan Offer Duration
After receiving your AIP, the next step is to select a property, provide the details to your lender, and undergo a property valuation. This then leads to the formal loan offer stage, which usually takes 3 to 4 months. However, I’ve also seen mortgage loan offers take as long as 6 months in some cases.
The duration can be influenced by factors such as the lender’s workload, the complexity of your financial situation, and the thoroughness of the conveyancing checks carried out by your solicitor.
| Stage | Description | Timeframe |
| Approval in Principle (AIP | Start bidding on properties once you have AIP. Typically reached within 6 to 8 weeks after submitting the application, but can vary based on bank workload. | 6 to 8 weeks |
| Loan Offer | After AIP, select a property, provide details to the lender, undergo valuation. Formal loan offer usually takes 3 to 4 months but can extend up to 6 months. Influenced by lender workload and financial complexity. | 3 to 4 months (up to 6 months |
Signing Contracts and Final Arrangements
Before signing contracts, you will need to agree on a closing date with the seller. After this, your solicitor will receive title documents, which transfer the property over. When your solicitor reviews these, you’ll sign what’s known as the contract of sale.
To finalise the process, you’ll need to provide final documents to your lender, including copies of your last payslips and proof you have mortgage protection insurance and home insurance in place.
Agreeing on a Closing Date
Once you and the seller have come to an agreement, you’ll need to set a closing date – the day when the property officially transfers ownership. This date should be mutually convenient for all parties involved, allowing enough time to complete any remaining legal and financial requirements.
Compiling Required Documents
In the final stages, you’ll be required to submit additional documentation to your lender. This typically includes updated payslips to verify your lending criteria fulfilment, as well as proof of mortgage protection insurance and home insurance coverage.
Ensuring these documents are in order will help facilitate a smooth drawdown of your mortgage once your loan offer is approved.
Drawing Down the Mortgage
Once your lender is satisfied with the submitted documents, you will pay the balance of your deposit. Your solicitor will send a cheque requisition form to your lender, indicating the closing date. Once they have received the cheque from the lender, they will arrange to have these funds transferred to the seller.
Stamp Duty and Registration Fees
At this stage, you’ll also have to pay stamp duty and registration fees. Stamp duty is the tax you pay when you buy a property and it’s probably the biggest extra cost to factor in when saving for a mortgage. The rate is 1% of the purchase price for properties valued up to £1 million, and 2% on any amount over that.
There is also a fee to have to register your property under your name in the Land Registry. Depending on the price of your home, this can cost from £400 to £800.
| Fee Type | Description | Cost Range |
| Stamp Duty | Tax paid when buying a property, 1% for properties up to £1 million, 2% on amounts over that | €Varies |
| Land Registry Fee | Registration fee to transfer property ownership to your name | €400 – €800 |
Conclusion
Navigating the mortgage completion process involves various steps, but with understanding and collaboration with your lender and solicitor, you can achieve a successful outcome. Having your Approval in Principle ready and promptly providing required documentation is essential.
Key milestones include applying for the mortgage, getting AIP, finding a property, engaging a solicitor, receiving the loan offer, signing the contract, and completing the mortgage drawdown. Clear communication, proactive document submission, and coordination are crucial for a smooth mortgage journey leading to owning your new home.
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