Log on for mortgage approval in minutes

If you have ever felt murderous because the paperwork on your mortgage offer was delayed, you may, although it's too late, be interested in developments among larger lenders.

Halifax will shortly launch a 'world-record beating' process, where borrowers can get a yes or a no in six minutes. The system will be part of the new Halifax internet and telephone offshoot Intelligent Finance (IF).

Next month, Abbey National will also launch a speedier process for clients who come to them through intermediaries: they will get an offer 'in principle' within 'three to four minutes'.

Many other lenders are also trying to improve their service, according to Frank Eve of E-loan, an internet mortgage service. 'Most lenders are working on a points-scoring system that can give "in principle" offers almost immediately,' he says. 'But it will be a year or two before most lenders have automated systems.'

So why are lenders apparently so keen now to improve customer service? 'Service is becoming a big issue,' says David Hollingworth of London & Country Mortgages. 'With no interest-rate movements, many lenders are thinking that borrowers might start deciding between them by thinking about how they are treated.'

This is also the view of IF, whose ultimate aim is a 'same day mortgage', according to spokesman Stephen McCrory. 'Most people don't do anything to drive the process forward at the moment, but we are starting to see people who tell us they don't want a 14-page questionnaire, but service that is slick and snappy.'

Abbey National is also dealing with people who want quick decisions. 'As they view a property, they sometimes want to know there and then if they can get a mortgage,' says spokesman Matt Young.

This probably sounds very unfamiliar to homeowners who had to fight through mounds of bureaucracy to get a loan. Many mortgage admin systems have evolved into paperwork nightmares. Change is now coming because the technology is making it easy, and because there are new players in the market, such as IF and the internet banks.

When you apply for a mortgage, the lender has to decide whether you are a safe bet to repay the money, and whether the house is worth lending money on.

To answer the first question, lenders traditionally ask for an employer's reference stating the applicant's income and whether they are permanently employed. Increasingly, however, lenders ask the borrower to provide three months of pay slips and their last P60.

What can annoy some borrowers is that a couple of weeks after they have provided pay slips, their employer is still asked for a reference. This can seem like slipshod administration. But what has happened is that the lender's 'underwriting department', which scrutinises mortgage applicants, will sometimes find a gap between the salary that the applicant professes to earn and the information on the payslips. These gaps are often caused by bonus schemes. In these instances, they often ask for more information - but neglect to tell the borrower why.

IF, for one, is now hoping to cut this procedure to a minimum. In some cases, it will rely on an applicant's bank statements, showing their salary, whether they are overdrawn and how easily they meet their current financial liabilities.

If lenders integrate their software, they can also collect information about creditworthiness at the drop of a hat. IF, Abbey and others now have systems which, at the click of a mouse, show a person's credit history and whether they are on the electoral roll. Their current home address can also provide valuable information.

'What is pushing these developments forward is the amount of information that can now be derived from a postcode,' says Eve of E-loan. If the lender can deduce from the postcode that you are applying for another loan from your current home in Millionaires' Row, they may drop some of the hurdles to let you through quickly.

Eve also believes that many property valuations could soon be done on paper, rather than by sending a surveyor round - which can easily delay the mortgage offer by several days. If a lender regularly lends on houses in Wilberforce Road, it does not necessarily have to value each one individually, especially if a lot of postcode information is available. McCrory hints that IF is exploring this: 'We'll look at redesigning the valuation around a slicker process. I'm personally of the view that if we don't have to do something, we should not do it.'

In the meantime, however, many borrowers will struggle with administrative monsters as they try to buy or sell. If you are in a hurry, collect all the information you can as soon as possible - which fax number should the lender use to get an employer's reference, for instance? - and pass that on to the lender. Chase up any third parties yourself - the surveyor, your conveyancer, your employer or your mortgage adviser. And, says Hollingworth: 'Keep ringing the lender. Then you can keep on top of the situation.'

The 'same-day mortgage' is perhaps 10 or 15 years off in the US, says McCrory, who will not be drawn on when that day will dawn over here. But it will come. He says: 'Mortgages have almost become a commodity - like getting a credit card.'

Real world

If all the books borrowed from Dumfries libraries were piled on top of each other they would be four times the height of Mount Everest, the town claims.

But property prices are not so elevated. One-bedroom properties at about £30,000 are surprisingly difficult to sell, according to agency Walker & Sharpe. A modern two-bedroom semi costs about £40,000, and a four-bedroom house in good condition can fetch up to £120,000.

'We've not had the highs of a property boom,' the agency says. 'But we've not had the lows either.'