faq for lenders

FAQ

FAQ section, here you can view general questions and answers...

Get a Free Quote With which rules does a conveyancer acting on our behalf have to comply

The Council of Mortgage Lenders has produced a Lenders handbook that offers comprehensive guidance for conveyancers acting on behalf of a lender. It is not necessary for the lender to comply with the terms of the handbook, but the initial instructions to the conveyancer from the lender should state whether or not they are instructing in accordance with the handbook.

Can I place conditions on a mortgage offer

Yes, as a lender you are able to place reasonable conditions on a mortgage offer. In fact, you have a duty to ensure that you are lending responsibly and, therefore, it may be considered essential to place certain conditions, such as the clearing of all unsecured debts, in order to comply with this duty.

If the conditions you are placing on the borrower are unusual, it is essential that you draw the attention of the borrower specifically to the conditions.

How do I know that the mortgages being offered are CAT standard

The government has created a set of standards relating to Charges, Access and Terms (CAT) that they consider to be the basic conditions that should be met by mortgage lenders. It is not necessary for a lender to comply with these conditions, but borrowers are increasingly aware of ensuring good standards from borrowers and, therefore, it is wise to comply with the government standards where possible.

Even if you are offering a CAT standard mortgage, it is vital that you ensure borrowers are aware that this does not mean that the government will guarantee the mortgage.

How can I ensure that I comply with money laundering regulations

Identification checks must be made as soon as is possible when a new borrower approaches you for a mortgage. It is necessary that you satisfy yourself that the borrower is bona fide; this would generally involve seeing evidence of identity such as passport, utility bill, driving licence and / or birth certificate.

If you have any doubts, it is vital that you inform the Financial Services Authority immediately for further guidance. Do not alert the borrower to your suspicions.

How should I deal with a borrower if they have a poor credit rating and I am unable to lend to them

If you have to inform a borrower that you are unable to lend to them due to their credit rating, then there are certain steps that you must follow. A borrower, in these circumstances, has the right to know which credit agency you have used and to get a copy of any information that you have received.

Inform the borrower that they have 28 days to contact the agency and to correct any information that may be inaccurate.

Of what sort of borrower behaviour should I be suspicious

Lenders should be extra vigilant for potentially fraudulent behaviour. Activities such as several applications from different individuals but with the same address or bank account details, repeated withdrawal of applications once further information is requested and changing employment or income details.

Be particularly vigilant for repeated applications of this nature coming through the same broker. Never confront the applicant or the borrower; simply pass all of the details on to the Financial Services Authority.

How should I deal with multiple borrowers for the same application

When there are multiple borrowers, it is vital that you meet each borrower in person to ensure that they are all in agreement with the terms and conditions of the loan. Particular attention needs to be paid if the joint borrowers are not husband and wife, as the situation can be more complicated.

Issues to raise include who will actually be responsible for the payments. Even though it is common for the actual payments to come out of one individualís bank account, it is vital that you inform the borrowers that they are both (or all) equally responsible for the payments and in the event of default each and every person on the mortgage deed could be pursued.

What sort of income information is considered suitable for a self-employed mortgage borrower

It can be complicated dealing with a borrower who has different circumstances such as being self employed, having a poor credit rating or looking for a self-certification mortgage. When these types of circumstances arise, a lender has a degree of flexibility in terms of what they offer and the terms that are offered.

As a lender, it is vital that you are transparent and fair in the way that you deal with atypical situations. Ensure that you have clear guidelines and that you make potential borrowers aware of the terms and conditions that you use in these circumstances.

Online Mortgage Enquiry and Quote

Online Enquiry...

If you would like to receive a quote for a mortgage from a broker please
Click here...

Mortgage Calculator

Calculate

Typical Interest Payments

First Time Buyers

2.89%

Purchased Fixed

2.89%

Discounted Rate

2.99%

Buy To Let

2.99%

Commercial

3%

 

 

Affordability Calculator

Calculate
Get a Mortgage Quote

Mortgage News Feed Mortgage News Feed

Questions & Answers

Read about general questions asked by brokers and lenders and the best ways to answer...

Mortgage Glossary

Search for terms beginning with the letter:

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z