One feature of the mortgage market at the moment is the speed of the application process. Many lenders have experienced falling service levels due to any combination of the post lockdown property boom and increased demand caused by the stamp duty holiday, remote working, furloughed staff, August holidays, resources being diverted to manage mortgage payment holidays and increasing due diligence. We have seen one high street lender fall 19 days behind in assessing new cases while one client was told it would take 5 weeks to book in an appointment with his existing provider. Not all lenders are struggling to this extent, but turnaround times should be factored into the advice when selecting a product, especially when a time sensitive purchase is involved.
When lenders are slower than usual it is important to get your admin in order and present your application in a professional manner to avoid further delays. Documents and information to prepare upfront would include.
If you are employed collate your last 3 months payslips and latest P60. For the self employed it would be your last 2 years personal SA302 tax calculations and corresponding tax year overviews in addition to your last 2 years of accounts. Note lenders look for the personal tax return to be dated within the last 18 months so October 2020 is generally the cut off point for acceptance of your April 2019 tax return and you will need your April 2020 document moving forward.
Prior to an application obtain a copy of your credit report from Experian, Equifax or Credit Karma especially if you took out a mortgage payment holiday. Make sure that your payments have been registered correctly during the last few months as errors can happen and they could have a big impact on your lending options.
Lenders have been asking additional questions around how you have coped during the pandemic and the sustainability of your income. Provide an overview to your broker of how your business or earnings have been affected, confirming whether you took a mortgage payment holiday, were furloughed, took the self-employed grant, obtained a bounce back loan and your situation moving forward. Some providers are now asking for your last 3 months business bank statements as standard.
Banks are looking to lend but knowing the above make sure your vendors are aware of the service times for your chosen lender. Valuations may take longer to book in, especially with the potential for further lockdowns. If you are refinancing to raise funds for a refurbishment or the deposit on a new purchase, make sure you arrange this in good time, so the monies are available ahead of schedule. When speed is of the essence you might want to consider a faster bridge loan as an initial alternative to a term mortgage.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Some forms of Bridging Finance and Commercial Lending advice are not regulated by the Financial Conduct Authority.
Lee Langley is the Principal Mortgage and Protection Adviser at OnPoint Mortgages.
OnPoint Mortgages a trading style of L&D Mortgages Limited is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority.