Mortgages & Credit Checks

garetmcc79

Hi,

Do mortgage lenders carry out any further credit checks after issuing an agreement In Principle, if so, do they have authority to do this?

I'm asking as I was having a "heated" discussion at work with someone regarding this, just wanted to know to clear it up.

Thanks

Senior_Paper_Monitor

Yes they often do - yes they can.

Hopejack

I have just recently applied for a mortgage with HSBC. I asked about all this as I was worried about credit checks on files etc etc. I was told that they would not do a full credit check for an AIP or afterwards, unless I decided to apply 'properly' for the mortage and only at that time would they do a full check. They do what they call a 'soft search' for an AIP which they told me (and I've seen on my file) only shows to you the owner of the credit file, other lenders/potential lenders can't see it.

It may be different for different organisations but this is definately what HSBC do. I wouldn't have thought it worthwhile for a lender to carry out a full check just for an AIP as they must get quite a few that don't proceed to a full application.

Senior_Paper_Monitor

Some lenders - including HSBC - certainly go the 'soft footprint' route for AIP/DIP (but in the case of a 'refer' may take a deeper look) and full check during the application (and can do this multiple times - usually only twice - if they choose to do so), that remains the correct answer to the OP's question, together with whether they are allowed to do this - to which the answer remains .... yes!

Hopejack

I think the wisest answer Senior Paper Monitor would be to say 'check with the lender' as clearly they have different policies/application procedures going from what you have said.

As for posting my 'single' experience, I did state/qualify this and did give details so that the OP could take or leave it. After all this is an 'advice seeking forum', the majority of people on here give advice based on their experiences whether that be in a professional or personal manner - yours was professional as an unqualified administrator, mine was personal having just applied for a mortgage myself! I can't see anything wrong with that!

Senior_Paper_Monitor

HopeJack: The 'warning of danger' has been removed to protect your sensibilities!

I am not sure that I said anything was wrong with your post - just warning the OP that a single experience cannot necessarily reflect a policy.

Also the advice given to you was incorrect (or at least partial) in that while generally HSBC will only do a single soft search at the time of AIP but they (or any other lender) can, will and are allowed to do more if they decide to do so. I do not wish the OP to be under any misunderstanding if he/she (or work colleague) might be concerned about multiple searches for whatever reason.

As for 'ask the lender' - the level of access to staff who actual know the processes (and contents of the agreement) is at best limited to general enquiries.