Underwriting Stage for Natwest Mortgage Application...

anxious_first_time_buyer

Hi all... I am a first time buyer with self-employed status. I have submitted a mortgage application through my own natwest branch on the 8th Oct, Thursday. Got a text from natwest the next day saying "We have recevied your mortgage application and will provide a decision within 5 days". It's been over a week now and all I know is in the underwriting stage. The house I am buying is a new build 2 bedroom which is worth £150,000 and is LDTV 80%. I went to my branch on Tues and ask for an update. The branch manager told me that the underwritters might need some extra information with my application. They will send a letter through internal mail to my branch (due to the strikes) and until today I still haven't receive it. I am really anxious at the moment! Can anyone please give me a clue of what they might need from me??

mortgage-adviser-now

anxious_first_time_buyer wrote: »

Hi all... I am a first time buyer with self-employed status. I have submitted a mortgage application through my own natwest branch on the 8th Oct, Thursday. Got a text from natwest the next day saying "We have recevied your mortgage application and will provide a decision within 5 days". It's been over a week now and all I know is in the underwriting stage. The house I am buying is a new build 2 bedroom which is worth £150,000 and is LDTV 80%. I went to my branch on Tues and ask for an update. The branch manager told me that the underwritters might need some extra information with my application. They will send a letter through internal mail to my branch (due to the strikes) and until today I still haven't receive it. I am really anxious at the moment! Can anyone please give me a clue of what they might need from me??

You can expect to produce three years trading accounts (possibly also SA303 tax returns for three years)

They may also ask for proof of deposit (bank account statement if that is where it is)

They may also ask to see your last three months bank statements anyway.

If they are happy with all of that they will instruct valuation of the property.

Do not expect anything to happen with any speed on a direct to Lender application.

anxious_first_time_buyer

Thank you for the reply of mortgage-adviser-now. I have already submitted 3 yrs trading account and last 3 months bank statements to them from the start of the application. All I am worried about now is the proof of deposits... I have asked my parents to help me out with some of the deposits but because they live overseas... they will have to send it through bank transfer. Will the underwritters need to see all the deposits in my account immediately or will they accept any kind of confirmation from my parents?

mortgage-adviser-now

anxious_first_time_buyer wrote: »

Thank you for the reply of mortgage-adviser-now. I have already submitted 3 yrs trading account and last 3 months bank statements to them from the start of the application. All I am worried about now is the proof of deposits... I have asked my parents to help me out with some of the deposits but because they live overseas... they will have to send it through bank transfer. Will the underwritters need to see all the deposits in my account immediately or will they accept any kind of confirmation from my parents?

They will normally accept a letter from your parents.

Normally text like this is sufficient

"I wish to confirm that I will be giving a non returnable deposit of £XXX which is XX% of the purchase price of [property address] to [borrower(s)] who is/are [relationship ie my son/daughter].

I confirm that I will have no legal or financial claim or interest in the property."

We have used this format successfully with most mainstream Lenders.

Might be worth getting a letter prepared in case you are asked for it.

anxious_first_time_buyer

mortgage-adviser-now wrote: »

They will normally accept a letter from your parents.

Normally text like this is sufficient

"I wish to confirm that I will be giving a non returnable deposit of £XXX which is XX% of the purchase price of [property address] to [borrower(s)] who is/are [relationship ie my son/daughter].

I confirm that I will have no legal or financial claim or interest in the property."

We have used this format successfully with most mainstream Lenders.

Might be worth getting a letter prepared in case you are asked for it.

Thank you very much again for your helpful advise.

The other question I would like to ask is my parents are only contributing half of the deposit ie.10% out of the 20% purchase price. The other 10%, in this case which is £15,000 will be from my savings.

Because I am self-employed (sole trader), it would mean that most of my drawings/savings are in cash. Do you think the bank or the HMRC will suspect anything if I put in such a large sum of money in the account. I would greatly appreciate if you can give me some kind of direction.

anxious_first_time_buyer

mortgage-adviser-now wrote: »

Are you saying you have £15,000 cash you need to put into an account to get it to the Lender?

If this is the case and the Lender is aware that the funds were cash they will have concerns under money laundering rules and will be duty bound to report this situation to the regulators.

It wont stop the deal going ahead but could put you under the spot light with the authorities.

Or course if you run a cash type business, such as car trading, this situation could be perfectly sensible.

I run a Food Takeaway Shop. Most of the income I would say is in cash. Approx. 1/3 are card payments from customers.

I am just wondering what is the best way to make it work. I wouldn't want to be put under the spot lights by authourities. I am not sure if it's a good idea to divide the deposit up and put it in a few seperate go.

g_attrill

The two issues are that paying lots of cash into a bank account will cause it to be logged by the banks for money laundering reasons, the second is that if the solicitors or lender know the deposit is sourced from cash they will want to know where it came from. If you are paid a salary from the business in cash then saying it is savings from that is probably enough, I don't think it's too unusual to save that amount.

anxious_first_time_buyer

g_attrill wrote: »

The two issues are that paying lots of cash into a bank account will cause it to be logged by the banks for money laundering reasons, the second is that if the solicitors or lender know the deposit is sourced from cash they will want to know where it came from. If you are paid a salary from the business in cash then saying it is savings from that is probably enough, I don't think it's too unusual to save that amount.

Thanx for the advise.

I just wondered how other self-employed people save up their big deposit without getting the authorites suspicious.

Unlike the employed people, they get paid by bank transfers/cheques but for us we get our salary in cash!!

anxious_first_time_buyer

mortgage-adviser-now wrote: »

Most illegally generated income comes in the form of cash (theft, drugs, extortion). To be really useful that 'dirty' cash has to be laundered to make it clean (and within the system).

A classic way to do this is to buy a property with dirty cash and sell it shortly afterwards and put the 'laundered' funds into a bank account. (hence 'money laundering')

Therefore Lenders and Advisers have a responsibility under the law to watch for such eventualities.

It sounds like in your case all is well. But the Lender may ask why your funds are held in cash rather than deposited safely in a bank account.

Thank you for your clear explanation.

I think what I might do from now on is to put the deposit bit by bit each week rather than the whole sum in.

Could anyone kindly tell me if they know what is the maximum safest amont of cash to put in a bank each week?

nit_mis

Hi anxious first time buyer,

I am in quite similar situation as urs. So what was the outcome of ur application? Has that been approved by Natwest?