Your Questions About Check My Mortgage Application

Helen asks…

mortgage application process?

i have applied for a mortgage with Halifax they now have all documents and have advised the surveyors to contact the estate agents asap, i am assuming credit checks have now gone through but am not sure, if not when would they decline offer b4 they fo any further in the Application or b4 surveyors are instructed worried as have paid for the surveyor now, my credit history is fine as far as i know with no defaults etc

admin answers:

Should now be ok as they have instructed the surveyors. It would be unusual to pay out that money for nothing.
UK

George asks…

During my mortgage application the lender says they found a default on my credit file. I cant find it!?

HSBC have done a credit check on me and found I have a default in September 04. I have asked experian for a copy of this file and when I received my credit file, there is no default on it anywhere? But strangely there is no mention of the Egg loan which I know I had. I did miss two payments in July and August of 2004 as I was not in the country and everything went wrong in the finance department for mw then! But Egg never contacted me about a default and as I say, its not on the record.

How can my bank have found this if I cant see it on the file and can I get rid of it (I know the procedure) if I cant find it!?

Cheers

admin answers:

If you look at your credit file, it will have figures like 0, 1,2 etc in each credit agreement. If you see in the part about egg, there will be, 1,2 or 3 there.
There are ways to get that removed if u took out the debt before 1st of April 2007, and still have the card.

Daniel asks…

will my mortgage application be accepted?

i have recently applied for my mortgage with stander through a broker, i have had the credit checks passed on both me and y husband and sent all our documents in, the underwriter is currently looking ast the application and has asked us for Additional info on our last 3 yrs addresses, the broker seems to think that is a good sign as he said they are just ticking boxes now and would not waste time asking for that info if they were to decline, im just stressed as hate waiting and worried they will decline for some reason, we have a 30k deposit and are 1st time buyers

admin answers:

You have a good down payment, but that is only part of the criteria. Most important is income. Do you have the income to make the monthly payments?? Another part is your credit scores.

I don’t know how things work across the pond. But here in the states, I sat down with a mortgage broker, gave him my personal info, and within 5 min. He was able to pre-approve me for $350,000k house.

It’s the closing on a house, that generally takes so long. Mine took 4 – 6 weeks.

Michael asks…

can you hide a credit card debt a mortgage application?

im not trying to be decietful, but im applying for a mortgage and im worried owning up to owing £14k will affect my chances. i can afford the payments. i checked myself out on 3 credit ref agencies and the debt was not there. and i have been checked out by bank as i have a mortgage in principle. just filling out form now
when my form goes to the underwriter, can this debt be found? it is not on my bank statements as i withdraw the amount and my wife pays it through her account for me
is there any other way anyone can find it?
i have found a house i want
theres no way i can afford to clear the debt and it would take years. i dont want to wait any longer as i would be too old then for a mortgage
and said i can make repayments on both

admin answers:

This isn’t the advice you want to hear, but I think it is good advice none the less.

Your credit card debt will have a high interest rate, probably much higher than your mortgage, and the interest you are earning on any savings you have. I would imagine it would be at least 10% a year. This means that this debt is costing you at least £1,400 a year in interests which is quite a lot.

From a financial point of view, you would be much better off paying off your credit card debt before investing in property. This would save you the £1,400+ in interests that this debt is costing you each year.

You should consider waiting until you have paid off this debt, to take out a mortgage. It will be worth the wait, because once you have not got the credit card installments to pay, you will be able to afford larger mortgage installments, and to pay off the loan a lot quicker. This will save you a lot of interest.

Take this example to see my point. A mortgage of £100,000, and an interest rate of 5%

1)You pay £700 a month on the mortgage and £300 to the credit card. Iin total you would take 19 years to repay the mortgage, and in total pay £153k – that’s £53k interest over the life of the loan.

2)If once you have paid of the credit card you are able to pay £1000 a month on the mortgage, you would take only 11 years to repay the loan and it total pay £131k that is a £22k saving in interests.

This is only an example, but it shows how paying off the credit card first could save you a lot of money on your mortgage. If your mortgage is for a greater amount or you will make smaller repayments – the saving will be greater than in the example.

Do you have any savings?

To apply for a mortgage it is necessary to have some money saved up.

Having savings also shows the banks that at the moment you have excess cash, and will be able to take on new commitments such as the mortgage repayment. The banks rightly believe that someone who in the past has not been able to save, will not be capable of taking on monthly mortgage repayment.

If you do not have the means to pay-off the debt, maybe you should not be considering entering into a mortgage. In order to accrue this debt, you have obviously been living beyond your means, and unless recently some drastic change has happened (new job, promotion- other significant increase in your income) this will be the case in the future. More so when on top of credit card repayments, you have to meet mortgage repayments.

The bank has a duty of care towards their customers, to provide them with good advice, and only grant mortgages to people who will be able to pay them. To give you good advice they need all the information about your financial situation.

The bank may not be able to track your credit card debt now. But if in the future you don’t make the payments, you can bet they will. And as with-holding this information on the application is deceit, you would be liable to them.

Sorry to pour cold water on your plans, but I think that you are taking a great risk of taking out more debt than you are able to afford, especially since interest rates are as low as they can go right now, and from here on can only go up.

In the recent past, banks have been to eager to lend money to customers who could not afford repayments, and many people now risk losing their homes because of this. Don’t get out of your depth because the consequences will be dire.

Mary asks…

Mortgage Application and Closing, when and how often does job verification occur?

We are trying to buy a house and when we apply for a mortgage I realize that they run credit, run job verification checks and do their whole checklist to verify you are approved for the mortgage, but on closing day do they also reverify job status?

My fiancee is trying to leave her job and start her own company but she is being held up due to us wanting to buy a house now. Does she need to stay until after closing?
Income is the reason she is staying, without that job I don’t know how she will get on the mortgage and we get fully approved.
Yes I could handle the mortgage without any help from her but that’s not the point. It sounds like the day of closing they will again verify job status? And that is creating a problem.

admin answers:

She should stay until after the closing just to be safe. Too much of a risk for her to leave now. If something happens and you don’t get the house, you will have a harder time getting another house if she recently started her own business.

Very risky to switch from being an employee with steady income and starting her own business. It can take up to 4 years before a new business is profitable, would you be able to pay the mortgage and all of the bills with just your income? If not, she should stay with her employer until your income is sufficient to pay all of the bills.

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