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In 2022, over 70% of mortgage applications were made through a mortgage broker. This is likely due to the increasing complexity of lender requirements and the rise in competition among banks. If you’re not using a broker, you could be missing out on a better deal.
One of the main advantages of using a broker is that they can review your situation before applying to a bank. This can significantly increase your chances of success, as they will be able to advise you on any changes that need to be made to your application in order to make it more presentable to a lender.
The downside to this arrangement is that the information you are provided with is only as good as the broker you are using. It is important to do your research and choose a broker who is experienced and knowledgeable in the mortgage market.
As a specialist broker, Orton Financial is often approached by clients who have either been declined by their broker or whose application is encountering delays. We can provide our clients with a comprehensive and impartial service, and we are committed to finding them the best possible mortgage deal.
The main issues clients often raise with us include:
- credit related issues
- property related issues
- slow processing / slow progress
Credit related issues
When approaching a broker for any finance, the most important document they can ask you for is a copy of your credit report. This is because it is common for a company to make mistakes when entering information into your credit report, which can lead to problems when you apply for a mortgage. The type of company which provides information to credit rating agencies includes utility suppliers, mobile phone companies and most other companies who offer a form of consumer credit. This can cause an issue if you are unaware.
For example, we were recently approached by a client who had been turned away from their broker because they were declined at agreement in principle, due to credit reasons. The broker had not asked the client to provide a copy of their credit report, which was our first course of action. On reviewing the credit report, we saw that the client had one account showing in default and a second account showing as 6 months in arrears. Both entries were incorrect and were a result of an error when the client moved home. We worked with the client to have these removed from their file. By removing these incorrect entries, the client went from being barred in accessing finance altogether to a position where we could approach any lender on the high street, and they would pass the credit checks. This not only saved the client from losing the property, but also ensured that they would not be penalised in having to take expensive specialist finance to get on the property ladder.
Providing a copy of your credit report to your broker can have a number of benefits, including:
- it allows us to get a more complete picture of your financial situation
- it can help identify potential problems with your credit report
- It can save you time and hassle in the long run
If you are considering applying for a mortgage, It is important to provide a copy of your credit report to your broker. This will help ensure that the process goes as smoothly as possible and that you are not caught out by any unexpected problems.
At Orton financial we will always ask you to provide a copy of your report. But this ensures we can provide you with the best possible advice. We do have access to private lenders who will be able to accept this report in place of running independent credit searches, for privacy reasons.
Property related issues
Depending on how a property is presented to a lender there can be issues with relation to the valuation. This can include aspects of the property certain lenders do not like (such as an annex or second kitchen), the condition of the property or the surrounding title.
Where we have an unusual property, we will always look to complete a pre-valaution enquiry, where possible. This process will involve an internal and external opinion being provided on the likelihood of the property being considered acceptable. This can save significant time in any process and provide more confidence as to the outcome. Even the quickest bank will take up to a week to complete and review a valaution. If the valuation is rejected and a secondary bank is required, this can make a vendor nervous, and they may assume you are struggling to obtain finance.
We were approached by a client who wanted to purchase a semi-commercial property for residential purposes. The front of the property was a hairdresser (ground floor only) and the rear, and second floor was residential. They wanted to continue commercially letting the hairdressers at the front of the property. The entire property was owned on one title and the client required a solution to allow them to proceed. We spoke to a well-known lender and their surveyor to discuss different arrangements in order to allow us to proceed. The reason we wanted to reach a solution with a highstreet lender was because this would be a much more cost-effective solution for the client instead of having to use an expensive specialist.
We were able to agree a solution which involved the purchase of the residential section on a newly created freehold title and the client would simultaneously purchase the commercial section on a newly created leasehold title. This was a solution the lender was comfortable with and was acceptable to the client. By spending the time to discuss the situation with the lender and coming up with a solution they accepted we were able to complete a semi-commercial purchase on some of the lowest rates available on the market.
A title split can often be a solution for some complex arrangements. The main concern for a lender is their immediate security, the surrounding titles are then of secondary concern. Other scenarios where this can be used involves titles with multiple dwellings, high acreage properties or self-build properties.
By taking the time to understand the lender’s requirements and working with them to find a solution, it is possible to overcome problems with the valuation of a property. This can help you to get the mortgage you need and purchase the property you want.
Slow progress
The valuation of a property can be affected by its presentation to a lender. Some lenders may not like certain aspects of a property, such as an annex or second kitchen, the condition of the property, or the surrounding title. This can lead to problems with the valuation, which can delay the mortgage process or even prevent the purchase from going ahead.
We are often approached by clients who are having issues with the speed of their transaction. This can be due to a number of factors, such as credit or property related issues. Not taking the time to resolve these can cause lengthy delays in your application and can even lead to a decline.
Each lender will move at a different speed. In normal conditions, a bank will typically take from 1-5 working days to review your application. Some lenders will provide automated updates to a client directly. So, you may receive email confirmation on submission of your application.
For complex cases which require a private lender, we can have a manual offer subject to valuation within 48 hours. For high street applications, the quickest bank will typically be able to offer an offer subject to valuation same day.
if speed is important, then a mortgage may still be the right solution. It is just important to understand that each lender will move at a different speed. At Orton, you will be advised on timescales, and this will be weighed in to your overall advice.
If you are encountering issues with your mortgage application or are looking for a specialist opinion. Contact Orton Financial today.