A bit confused

Nebetar

Other half is in the process of getting a mortgage. He went to see his FA for the first time, they filled out a few forms and it was refused for some reason. He went back again to see the FA, who this time has filled out loads more forms than previously, and also a DD mandate....Do you think that DD form is standard? or does this mean that this time he's been accepted and its all going through? He should have asked this at the time, but didn't think about it.

Thanks for your time

Xbigman

It is quite common to fill out DD mandates in advance but it does carry risks. I once got stung over an endowment that wasn't then required being put through anyway.

Your OH really should know what this was for. I assume it was for the mortgage and I assume it did not represent an offer, BUT it could have been an endowment, insurance or for the FA to take an arrangement fee.
The ultimate answer is to kick your OH in the rear and send him back to the FA to find out what he has applied for, what it will cost and what that DD was. It is probably all OK but you need to check.
Regards


X

dunstonh

Most applications will carry a direct debit mandate and will not be fully processed until you have completed it. Assuming this is a mortgage application, then not filling it in will slow the mortgage acceptance down.

xbigman is correct in saying that he should know what the mandate is for before signing it though.

jamesd

Nebetar, your SO should definitely know more. Was he given a KFI for the mortgage he's applying for? For the one he was apparently rejected for? The information from those (mortgage company, interest rates, penalty fees for early repayment) would make it possible to comment on the posible merits of the offer, or at least say what was happening and give some idea of why.

herbiesjp

It does not sound like your OH has fully understood the process if it has been explained to them

If it has not been explained your OH they should not be signing any paperwork really.

Signing a DD mandate does not mean it has been agreed, it simply sounds like another application form has been completed. Unless the adviser has got the case agreed beforehand following the fact that the first application was refused.

Why was the first case refused? Do you have some advserse credit history? Which lender refused?

Let us know we may be able to help more

Nebetar

Thank you all for your replies...
OH applied to GMAC first with his FA, he's an exisiting customer of theirs and they were the ones that refused him, when they did a credit check, not sure why as he paid off all his debts when he remortgaged and became a customer of GMAC 3 yrs ago, so he was in debt when he applied to them last time and he's not now.
They applied for another mortgage and I have got here in front of me a Key Facts about this mortgage, its stating how much the mortgage is for, how much the fees are etc like JamesD has said.
According to my OH his FA got in touch with the 2nd company and they are happy after doing a Credit Check, whereas with GMAC they did a check first and weren't happy to procede with an application. I will get him to call his FA as soon as he gets up, as he works nights.

Thank you all again

jamesd

Nebetar, the mortgage advisor could have asked for credit reports and may have them available. Those should give some information on what is happening with the credit rating. I suggest finding out what they say in case there are any mistakes that will affect the offered mortgage rate.

If you say what the name of the mortgage is and give the interest rates and repayment penalties that should give some idea of what type of mortgage it is, particularly whether it is a normal rate (mainstream or prime) mortgage or a sub-prime or non-conforming (more expensive!) mortgage.

If the interest rate is 5.75% or higher it's probably one of those more expensive mortgage types. Finding out what the credit reports say and correcting any mistakes could be very beneficial if this is the case and there are mistakes, rather than legitimate negative information. You can read more about the mortgage interest rates and types GMAC offers at the GMAC intermediaries page.

It's not necessarily bad to be going with GMAC, who have a lot of mortgages available, but the initial rejection suggests that some investigation is worthwhile to find out what happened and why and possibly if a different lender might offer a better deal. Or not - the mortgage broker your OH is using has more information and should be able to give better suggestions than anyone here, if he's able to sell any mortgage on the market. Worth checking though, just in case the mortgage advisors here see a problem.

One possible negative thing about GMAC: they are not the real mortgage lender. Instead they sell the mortgage then resell it to others, who "service" it, collecting the money and following the terms in the mortgage contract. That's generated some complaints here, which you can find via the search box. It's vital to make sure that the terms are OK because the people who buy the mortgage have no reason at all to treat you generously or better than the terms.