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Mortgage Process
1. The fully completed Agreement in Principle allows us to obtain a credit check and search on behalf of the customer and enables us to place the mortgage
2. If the credit check is successful at this stage the lender will offer a “Decision or Agreement in principle” subject to certain conditions.
3. The conditions will be primarily production of documentation to verify the information provided in the application together with all information considered necessary to satisfy the “underwriters” that the client is suitable for lending and meets their criteria. (please see attached list of required documents)
4. A complete application must be made and all initially requested documentation must be provided. In Shared Ownership/Shared Equity and High Loan to Value cases many lenders will not look at a case until all data is provided. All fees for valuations must be made upfront via debit or credit card.
5. Once the application process is completed and all documents presented, (Please be aware that it is required for original documentation to be seen and certified by a regulated person to satisfy proof of ID and Money laundering rules.) Then the case is passed to the admin department for processing.
6. Once the application is flagged at the lenders end, dependant on current lead times, the case is passed to an UNDERWRITER, whose job is to look at the documentation and determine if everything is in order and meets their lending criteria. The underwriters may ask for any additional information at this stage and the sooner that this can be provided the sooner the case can be passed.
7. Once the client is approved by the underwriters the property will have to be valued. Every lender will insist on sending a Valuer/Surveyor out to determine that the property is suitable collateral for their lending and assess the value of the property in line with market value and their own policy. This may be that new builds are valued in line with second hand values, which will only be an issue if you are borrowing at high loan to value.
8. If the Client is approved and the Valuation is acceptable to proceed with the mortgage then a mortgage offer will be issued.
9. From this stage on your solicitor will take over the process and take you to completion.
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Customer Journey
1. Initial conversation with consultant for assessment of most suitable mortgage and ability to proceed.
2. Customer to complete Agreement in Principle which can be downloaded from our website.
3. Within 24 hours we would expect to obtain a decision from a lender unless otherwise advised.
4. Consultant will contact client to discuss the options available and to answer any questions.
5. Arrangements will be made for completion of forms.
6. Within 48 hours of forms being received together with said documentation the mortgage will be passed in to administration.
7. Client will receive a call from case handler and will be given timescales for processing.
8. The case handler will update the customer by email or telephone.
9. Mortgage offer should be produced within 28 days subject to lenders service standards. Offers can be produced in a much shorter timescale these options will need to be discussed at the outset.
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Declined Agreements in Principle and adverse credit
Where a case is declined, as per the data protection act the lender is not at liberty to disclose the reasons why. We will frequently be told that the client should get a copy of their credit file.
www.experian.co.uk the primary provider or www.equifax.co.uk the secondary credit agency that lenders use. Clients can apply on line to see their file.
The sorts of issues that can get raised are as follows:-
DEFAULTS – where a creditor has lodged an unpaid mark against you on with the credit agency, these stay for 6 years whether they are repaid or not and dependent on if an attempt to repay them was made and how quickly can affect the lenders decision if they are prepared to review their position on that.
COUNTY COURT JUDGEMENTS (CCJ) – where a creditor has taken the client to court over unpaid debts and the court has issued a judgement to pay. This again will stay for 6 years and further lending will be judged on the clients intent to pay this off.
BANKRUPTCY - Client has declared themselves bankrupt and will not be allowed to have proper access to a bank account or borrowing for a full year, after which technically they are free to resume business, however many lenders will insist on a longer period before they choose to lend again and may requires a few smaller lines of credit to have been taken out in the meantime to demonstrate suitable handling of repayments.
INDIVIDUAL VOLUNTARY AGREEMENT (IVA)- when a client voluntarily enters into an arrangement with a debt councillor who liaises to achieve an acceptable figure to repay to creditors over a defined period. All debts are frozen and cannot increase. As with a Bankruptcy this situation makes lenders reluctant to lend, the best insisting that the IVA is proven to be being managed for some considerable time, or to have been repaid and several years to have elapsed with no further transgressions.
MISSED PAYMENTS
In some cases the lenders may decline because overall the credit score is low, this may be due to frequently missed payments indicatinf client is not handling obligations as effectively as the lender will requires or because there is little or no credit profile to go on, in the case of never having had a loan, credit card or mortgage.
Summary
All these situations make a mortgage harder or more expensive to achieve, in the current credit crunch climate you would additionally require a substantial deposit to be offered a mortgage.
Client Expectations
De Havilland Group Limited is a mortgage broker and their mission is to gather information from the client and assess the best possible mortgage deal available from the whole of the marketplace. To clearly explain the selected mortgage and answer any questions. We are intermediaries and are not responsible for the decisions that the lender’s underwriters make but we are here to provide a smooth service for the customer and assist in obtaining funds to purchase their property. Our job is to get the mortgage on the customers’ behalf.
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