I have plugged this under success stories as I feel like this is a success story despite the fact this was just a “normal mortgage”.
We have had a couple of clients for about 10 years now. Over the years we have done maybe 3 or 4 mortgages for them and this mortgage was helping them to purchase their new home.
The clients have no adverse credit, they have good stable jobs and a combined household income of over £150k. The new purchase was 80% LTV and about 2x income… This application was as simple and straight forward as they came.
What happened?
The application went in to a mortgage lender who declined it on credit score – we have absolutely no idea why! As in there is nothing about the case which would should make it result in a decline. But it happens even on the straight forward applications occasionally.
We submitted a second application. That went in and it passed the credit check – phew!
We tell the client to expect an offer within 3 working days. 3 working days comes and then we hit the 4th working day, so I call up to find out what is going on.
Its been pulled for audit! The lender would not tell us what the audit was for (are they checking me as a broker? The clients or less worrying the underwriter? – nobody will say!). I was not worried about this. I knew the clients, I knew we did a good job and I know how the lender works as we use them regularly.
They also would not tell us when it would get looked at or when to expect an update! We agree to leave it for 3 working days and then see where everything is at.
We call the lender up after 3 working days to be told its been agreed but we are waiting final sign off which should be imminently.
Thats what actually happened.
What happened? (The clients version)
Application submitted and surprisingly declined.
Application submitted to another lender and passed the credit check as expected.
The application is picked up for audit. We tell the client this happens occasionally and they are just checking up that we have done a good job (but we always do so nothing to worry about). We advise it can take up to a week but we will chase again in 3 days (this buys us an extra 2 days in case we hear nothing).
3 working days later, your offer has been issued, congratulations!
Summary
I think there are a few things to note here:
- Even straight forward applications can hit the rocks. Its not often but it does happen.
- I do not doubt the clients were still a little concerned with the way we framed the situation of the second application. But I was confident and so there was no point stressing them out over the situation. We could have bigged up what we had done but given the initial decline I figured it was best to play it down and act like it is normal – which to a degree it was. We talked it over, had a laugh and made light of the situation.
- The final outcome was the same if we had made it seem like a problem or we played the problem down. Even if there was an issue, we still had various other options. I also think the fact we have looked after the customers for many years, it helped the situation.
- We do not get it right first time every time. I still have no idea why the first DIP declined so it is difficult to say we did anything wrong. One of the clients bank with them and the other has a credit card with them. Both applicants are high up in their perspective fields and obviously with a 20% deposit and a long history of paying a mortgage they were in a good place.
This was a straightforward case or should have been. The problem was unexpected but easy to overcome by going to a plan B lender.
Sometimes its a case of what we do behind the scenes that makes a broker worthwhile. The clients now have their offer and are well under way with the legals.