Lenders are looking very closely at the quality of every mortgage application that's submitted to them. Not packaging mortgage cases fully and correctly could have serious consequences for you and your firms as lenders start to look at ways to reward good quality but penalise bad quality. Good case quality means getting it right first time and involves a thorough and correct application with all relevant and accurate supporting documentation.
Most lenders provide guidance notes to help you understand what's required. These guides can either be found on their websites or on the lender pages of our Mortgage Club website. Please take the time to know what’s needed before you submit an application.
To help you we’ve produced our own Case quality top tips PDF: 38KB . These can be printed off and used as a ‘quick guide’ to what you need to think about before submitting your mortgage cases. We’ve also created the following table that highlights the key things currently on lenders' minds and includes simple steps you can take to minimise any potential problems.
|METRIC||WHAT LENDERS LOOKING FOR||WHAT CAN YOU DO?|
|Quality of submission||Lenders need cases to come to them complete with all documentation provided at the same time. This helps them underwrite the case and maintain their service levels. If cases are packaged fully first time, lenders will have more time to accept more cases, this will benefit us all.|
|Apps to Offer/Completion||Some lenders measure the percentage of applications that get offered. Others are more interested in those that proceed to completion. If a firm has a high percentage of cases that never go to offer this could be because the case either fails to meet the lender criteria or it hasn't been packaged correctly.|
|Interest Only||Lenders continue to review their interest only criteria for maximum LTV accepted and acceptable repayment plans/vehicles.|
|Into retirement||Lenders need to understand how the loan will be repaid. Evidence of income or other forms of repayment will be required on all cases that continue into retirement.|
|Declines/Cancellations||Having a case declined is bad news for your customer and you. Lenders want high quality, low risk business and scrutinise the suitability and affordability of every case introduced to them. A high number of declines or cancellations will suggest to a lender that case quality is poor and lead to stronger reviews and monitoring. This all builds up to an overall picture a lender will have of you and your firm.|
|Arrears||Lenders know that some customers will fall into arrears and will predict the level of expected arrears by profiling new borrowers against similar customer types. They will also price a degree of risk into each new mortgage product, to allow for some inevitable default.|
We do understand the lender isn't always right. Their criteria and product changes aren't always communicated as well as they could be. We're also aware of patchy service standards too, as we have less lenders in the market processing large mortgage volumes to keep this market alive.
Taking that extra bit of time when submitting every case to a lender and getting it right first time will only pay dividends. It will help you and your firm, but most importantly, your customers.