I have mentioned in recent weeks the advent
of Mortgage Market Review (MMR) and the impact it will have on lenders
approach to submitted applications. At the risk of being boring, I feel
strongly that this is a subject worth continuing as the impact on acceptance
of mortgage applications could be considered as seismic. MMR places
far more responsibility on the lender for making fully informed decisions on
new applications and with a particular emphasis on affordability. Not just for
now but taking into account the foreseeable future too! Lenders will require
the applicant and their advisor to assess what may happen financially
in the next five to ten years and their underwriting decisions will be based
around this. So, the message is ensure that when you start the application
process you have a full schedule of income and expenditure to hand. Advisors
and lenders worth their salt will require this.
That said, business remains brisk and lenders are
keen to move their mortgage funds quickly and have targets to hit in the
remainder of the year. So, if everything about your application makes sense
then there should be a lender and product ready to fit your requirements. With
this in mind a very important part of the application process is the completion
of a Fact Find. No self respecting mortgage broker will be without one! This is
a data capture document which examines everything about the applicant in a
financial sense ensuring that the advisor has as full a picture about you as
possible before providing formal advice and recommendation. At that
time, your advisor will also require a great deal of supporting documentation
as part of the process. This will include the need to prove identity and
residency, usually by way of a passport and utility bill. Other required
documents will include proof of income by way of pay-slips or accounts and
three months personal and business statements. The list is not exhaustive and
will be determined by individual lender requirements and these can vary quite
widely. Don't be surprised as the lenders are entitled to gather sufficient
information about you to make a reasoned and sensible lending
decision.
I regularly close with the suggestion that you talk
to a qualified advisor before you start the application process. This has never
been more important than now given the new world of MMR
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