Avoid a declined re-mortgage in 2022…

Dec 14, 2021

 

If you are reading this, I am guessing your mortgage rate will be ending in 2022. If market predictions are right, it is set to the busiest year ever for re-mortgaging. So getting it right first time is more important than ever. Lenders could be receiving a record number of applications, which often means they can become pickier with who they lend to and…declined mortgage applications. As an early Christmas gift, here are our top 5 ways to avoid a re-mortgage decline in 2022.

Names You might not believe this but it can be possible to obtain a mortgage and then it not go through to completion. One cause of this is due to name discrepancies. If your name on the title deeds vs on your ID vs on your mortgage offer doesn’t match, your re-mortgage may not complete! Make sure you match up all three of these! You can obtain a copy of the deeds from https://eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do. If this differs to your ID for any reason, you may need to have the title amended as part of the re-mortgage by the solicitor. This is likely to cost extra in legal fees. If you only find out about this mismatch at completion, some lenders will make you apply again from scratch. Game over…do you wish to continue…play again… 👾👾👾

Credit history. You’ve applied for a mortgage and the lender finds something on your credit report. They may not even be able to tell you what this is, so you are shooting blind trying to fix it. Do it the other way round, get a copy of a multi agency credit report here, so you can see what lenders see and pick a suitable lender accurately. Click here to obtain your multi agency (the most comprehensive) free credit report (30 day trial as always!)

Property value. Since you bought your property a couple of years back you’ve painted the kitchen and put a hot tub in. But what does that actually mean for your property value? Property prices can be quite subjective and improvements may be seen as valuable by some people, but not others. You might think you have 25% equity in your property, apply for a mortgage which requires this, but the mortgage valuation comes in lower. You are no longer eligible for the rate you applied for and have to take a higher one or start again with a new lender! This is far from an exact science, but try to be as realistic and conservative with your property value as you reasonably can. Compare properties on your street which you feel are ‘like for like’ being as honest as you can. You can cross reference the estimated prices on sites such as Zoopla.co.uk and Nationwide’s house price index calculator https://www.nationwide.co.uk/house-price-index/.

Lending amount reduced. This will generally be because the lender is using higher commitments or lower income than you thought they would. Where this happens, the mortgage amount offered can reduce. Making sure you are working from evidential documents from the get-go, will help stop this happening. If you have your credit report, bank statements and income proofs and have cross referenced exactly what the lender will use as a commitment and how they will average your income, you should be on good ground. Bear in mind though that certain lenders have a finite list of commitments (generally the bigger banks) whereas some lenders can have more of a ‘case by case’ policy. You could find that having visited Wagamama’s too many times over Christmas period could reduce the mortgage available with certain smaller lenders!

Documents don’t match. If names, addresses, incomes, numbers on any documents sent to the lender after you apply do not match the application you risk getting declined. Payslip deductions or formatting of addresses (particularly for flats) are common decline reasons. Essentially you need to START with your documents, not finish. It is much easier to discuss mortgages with a lender or adviser without your documents, however, you must be conscious that you are trading the feeling of quick progress for accuracy. Always ensure you feel every check has been done by the adviser before you apply, rather than after.

Click here for the kinds of documents are typically needed.

Any questions always just shout or ‘book a consultation’ below

01174420604  info@advantagefs.co.uk

Have a great Christmas and here’s to a busy re-mortgage market in 2022!

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

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