The “easy application” success story

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A couple of months ago we received a phone call from someone who wanted a mortgage.

We did our usual initial questions:

  • Approximate purchase price,
  • Deposite,
  • Income,
  • Employed/Self employed,
  • Any credit or other issues.

Everything was straight forward, it was affordable, 10% deposit, employed no credit issues or any other problems.

Where it started to go wrong

We made a start, we completed the factfind and got their documents together. We then did the research and as it was a nice and easy situation, we ended up applying to the cheapest lender – Declined!

Usually we would ask for a copy of the credit report upfront. However as they said there were no credit issues we took their word for it. Their credit report was as they said, there were no issues. All we could determine was that they had not passed the scoring required. There was no specific reason for it. It was just a case of it not passing the score.

We then applied to the second lender – Declined!

Where having a broker comes in handy

At this point the customer started to get worried. I reassured them and we discussed where we go from here. Our suggestion was to drop to the 4th lender on the list of cheapest products as they are a lender who are generally a little more forgiving. If that failed we may need to look at lenders who do not credit score.

We wanted to reassure them that were was a Plan C and even a Plan D to try to settle their nerves a little.

Success! The third Decision in Principle passed, we then moved on to the application and all was fine and went through – we had a lot of phone calls from the client wanting reassurance that week, which is understandable.

Outcome

The customer has their mortgage offer and the legal work is currently going through.

They ended up with a product which is around £1 per month more expensive than the cheapest product, but by dropping a product we saved doing any further credit checks which may have hindered the lender we were accepted with – £36 over the 3 year fixed rate, plus an extra £5 on the arrangement fee. The customers were happy to pay an extra £41 over 3 years to get their mortgage.

Summary

This was quite an interesting one as we expected it to fly through. However it just shows that even the most straight forward of applications can have problems.

I think it also shows where experience comes into play even if things do not go to plan as we still knew who was likely to accept the case despite it struggling to pass credit checks.

In addition to that I think it also shows where having a broker can come in to play. After 2 failed Decision in principles, the customer really started to worry and they had gone from being relaxed to being on edge. They found it helpful having someone on hand they could call just for that extra reassurance. We are used to doing that as most of our customer have bad credit. I was not expecting it on this application but things do not always go to plan. Having someone on side to help can made a big difference.