Mortgage Offers - We Is it Now So Difficult to Get a Mortgage?
We thought we’d highlight a recent conversation with a client which displays just how difficult it is to get a mortgage.They are a couple earning £80,000+ and want to buy a house for £225,000 with a £50,000 deposit.
3 years ago they would have had hundreds of lenders chasing them for their business now they are struggling to get a mortgage offer!
They more than qualify the lenders criteria but are now having to jump through hoops to satisfy the underwriters. After providing endless bank statements, wage slips and having proved the sources of the deposit they are being asked to provide more and more completely irrelevant information.
All this is delaying the mortgage offer, it has been in the system for nearly 8 weeks, which is making the vendor of the house they are buying very nervous.
In the past lending to such a low risk, high deposit client would be made automatically with little or no checking by underwriters.
What is the reason for this?
Maybe the lender has bad debts caused by poor qualification and is now over-compensating. Or maybe they need to be seen to be lending but don’t really want to until they get their balance sheets in order and are therefore making it difficult for applicants so to discourage or delay lending.
Now we all agree the banks made bad loans and they should learn from their mistakes. However when a perfectly good client requires lending it should be available without needless red tape which slows what is already a very slow process.
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