April 10th, 2014
Some of the UK’s largest mortgage lenders have announced how long a borrower should expect to be interviewed for regarding their mortgage requirements under strict new mortgage rules that go live on 26th April. These rules mean that a qualified bank adviser must now go through a full financial interview prior to arriving at any sort of recommendation for a mortgage.
Given the level of information that must now be assessed, certain banks have indicated their ‘average times’ a would-be borrower should allow for the meeting with the lender’s adviser. Massive names in the High Street, such as Nationwide and Santander, are responsible for lending to nearly 30% of UK borrowers. They have both announced that anyone looking for a new mortgage should allow two and a half hours for an interview prior to receiving a recommendation.
The Lloyds Banking Group, the largest mortgage lender in the UK, have advised the average time is two hours, with more complicated requirements requiring more time. All lenders announcing their timescales have also advised existing borrowers looking for more borrowing, or even a simple rate switch, to allow for a similar length of time.
The longer timescales are also compounded by the availability of qualified bank staff to be available to interview potential borrowers. Borrowers located in areas of high property purchase activity, particularly in towns and cities, face a wait of up to 4 weeks for the opportunity to have the initial conversation about mortgage requirements.
Sat Singh, Managing Director of specialist broker Contractor Mortgages Made Easy, made the following comments about the choices faced by those looking to move.
“Many of our contractor clients are looking to buy in very competitive property markets, where one has to act very quickly against fierce competition in order to get a bid accepted. Properties in London, Aberdeen, Manchester and Birmingham regularly get sold via a ‘sealed bid’ situation where a buyer has to exceed the advertised asking price to stand any chance of being the preferred bidder.”
“This is just the start of the issue for many of our clients, as they then have to work to very challenging timescales to get a survey booked, and then a mortgage offer to be produced. The requirement is to typically be at exchange of contracts, or conclusion of missives in Scotland, within 4 weeks.”
“If banks are asking their customers to wait 4 weeks for an interview to get an application in, I’m afraid the property will simply be sold to someone else. It is vital that a mortgage is pre-underwritten and ready to apply for, prior to a bid being made. One of the most frustrating things for contractor could be that they wait for this interview, have a lengthy meeting, and the bank may still decide not to offer the mortgage based upon contractor status.”
Article By: Taj Kang, Business Development Director at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080