Off the back of Halifax launching a mobile device where consumers can get mortgages approved in principle, David Blake gives an insight into what consumers need to be mindful of when applying for mortgages:
It’s fantastic to see lenders adapting systems to meet the needs of the modern consumer but mortgages should not be purchased based on ease of process alone.
Consumers need to be mindful if arranging mortgages directly with one lender that they might not be obtaining the most suitable mortgage for their individual circumstances.
It’s also important consumers understand an Agreement in Principle is a purely an indication of lending and does not constitute a formal mortgage offer.
Often, from Agreement in Principle stage, consumers will have to go through rigorous underwriting processes in order to be formally accepted for the mortgage and these underwriting processes vary a great deal from lender to lender.
Furthermore, a mortgage is a loan secured against a property so it’s vitally important consumers have a good understanding of the property they wish to purchase and if time has lapsed between the initial agreement and formal mortgage application, the lender might not offer the most suitable product any longer.
When choosing a mortgage consumers should be encouraged to shop around but must be cautious not to conduct multiple credit checks as this will have a negative impact on their ability to be accepted for a mortgage in the future.
An independent whole of market mortgage broker will be able to put consumers in a fully educated position as to what their borrowing options are and also obtain an Agreement in Principle where it makes sense to do so.