Mortgage Application - Should I have received an IDD or KFI already?

Midnight_Tboy

Hi all.

To quickly summarise first......We looked at a house, offers had already been made on it, and we wanted to put in our offer. I'd hunted around for the best mortgage deal I could find at the main banks/societys. The EA insisted we needed a DIP first before can put forward the offer, but couldn't be seen by bank for another 10 days.....so we used the EA mortgage broker the next morning, the best they could find was the same offer I had found so they said they'd waive the fee, then had the DIP approved and offer accepted at the weekend.

I am going to see the mortgage advisor tomorrow to start the mortgage application process, pay whatever fee it is for either the valuation or Homebuyer Report, and no doubt them also trying to sell their own high commision solicitor (I've just been shopping around with that and found some good local ones with quotes I'll likely use)

Anyway.....I read on another thread, that I should be given an IDD (Initial Disclosure Document) and a KFI (Key Facts Illustration)

Do you guys know if I should have received this document during the DIP application stage, or does this happen at the stage of the proper application?

Reason being, they were having PC problems at the time of trying to make the DIP, and had to call me back from another branch to process it and tell me that they'd found the best/same deal. They said verbally on the phone that the fees would be waived due to me already finding the best deal off my own back beforehand (allegedly - though I've read waiving fees is becoming more popular lately).

So, I'm wanting to make sure that I have something in writing somewhere/somehow that I won't be hit with a sneaky bill and denial of waiving the fee at a later date, and believe this should be on one of these forms?

Thanks,


Oh, also....how hard are they likely to push me into trying to use their own conveyancing services (its Manners & Harrison FWIW)? I plan to get my own building insurance and all that seperately, and try to save the best way possible.....but it's a steep learning curve as a naive first time buyer

kingstreet

You should have received an IDD at the outset of your discussion with the employee dealing with mortgages.

You should receive a KFI before a decision in principle is carried out. You should also receive a KFI before you agree to the submission of a mortgage application or pay any fees as the fees payable are confirmed therein.

Midnight_Tboy

thanks - so yes I should have received them then

Is the KFI before the submission of application also likely to show the broker fee if any? Curious to what would happen for example if they printed one out, it showed a broker fee on it, but then if she said along lines of "don't worry about that showing - it'll still be free" or words to that effect

kingstreet

If no broker fee is being charged, you should be given both an IDD and a KFI which confirms that.

You should not accept any document which says a fee is payable if you believe it isn't, or shouldn't be.

kingstreet

For reference, our process;-

initial enquiry

issue of data capture form and IDD

receipt of data capture form

preparation and issue of KFI with request for permission to carry out DIP

DIP done and result reported

client reserves property

KFI presented, docs for submission collected and application submitted

IDD, KFI, FactFind, Mortgage App and Reasons Why issued to client for approval by tracked email.

Midnight_Tboy

thanks - I'll be making sure I get this before they go ahead with the application

Whilst I have an active thread....could I please ask too....as they said all I need to bring are bank details and a debit card for any upfront payments.....am I right in thinking then that the only upfront payment will be whatever survey/homebuyer report fee I choose?

Also.....during my initial DIP appointment, I told the lady each of my credit card balances, (probably in region of 500+ total at that point in time) and that they were all paid off in full by direct debit each month. During the DIP process she asked for each if they were to be 0 when applying, of which I just said yes........I'm now wondering if I should pay off manually each of the credit cards (this could cause double payments to come out however), or just let the direct debits pay them off at whatever date they're scheduled to be? Not sure how anal these applications can be when it comes to paying off the cards. We buy most shopping on cards for affinity points/halifax clarity cashback, but always pay off in full every month

kingstreet

I don't know. The fees will be whatever the KFI says and how you choose to pay them, upfront or added to loan.

Take your statement balances from the end of last month and have the adviser key them and note they are "to be repaid on or before completion."

You do not know when in the month the credit system will update and what the lender's search will see, so this route avoids the issue of "undisclosed credit."

ACG

A KFI can be given after the DIP.... My compliance people have no problem with that, so i wuold say a KFI whilst should have been given does not have to have been yet. It should be given to you before an application goes in however.

EDIT: When i say no problem, i mean they would question it but providing there is a reason for it they would have no issue with it.

The IDD should have been given to you before the DIP is done, it should be given as soon as you have any discussion about mortgages.

Midnight_Tboy

Thanks once more.

Upfront/as and when required will be my preferred choice rather than adding to a debt with interest I guess

Thinking about it now, I think she said similar words like that "to be repaid on or before completion" for each one before ticking a box on the system....so I'm guessing that would be ok.

When the computer systems were crashing, was after completing and saving those details, it was trying to call up a separate software application which was what was failing. I believe the error was to do with an outdated database due to software not registering to the server properly.....This may perhaps be the reason I never got the KFI printout....but yeah, I should really have got an IDD. Maybe it was due to the MA being based from another branch and having to come down due to their own staff being off (and might have assumed had one - as it was all done over phone prior)

I'll certainly be making sure the KFI I get tomorrow. Is there any point now the DIP is approved to push to get an IDD however? Will the KFI on this final application cover the same info?

kingstreet

You should ensure you have an IDD and a KFI in your hand before you commit to anything. The final KFI should reflect your mortgage offer, so you need both in your hand at the time to be able to compare.

The IDD should indicate you are getting "whole market" advice (section 2) and not only a limited panel of lenders and that there is no fee being charged (in section 4) and that the firm will be paid commission by the lender.

The KFI will confirm the fees in section 8, so you are looking for valuation, product fee, lender's legal expenses and no broker/advice fee there.

You will also be sold their expensive (often tied) insurance products on top of the expensive poor-quality conveyancing service as well, IMHO.

Midnight_Tboy

thanks once more.

Not sure what the Lenders Legal Expenses will be (Nationwide) as haven't come across that one....but glad I know what to look out for.

I think the EA use 'a limited range of lenders' but the one I'd earmarked in my own comparisons was on that list (seem to give best at around 64% LTV for 3.09% 5yr fixed with 499 fees)

I've rang a couple of local solicitors....and have been quoted around £780 for that.

I was told that for the property it'd likely be a condition for the mortgage to take out some home insurance prior to buying.....I've hunted for a couple of rough quotes shopping around but nothing set in stone as know no dates or anything yet. Does this mean I HAVE to buy the Nationwides own insurance policy as part of the condition, or can I choose to go with whoever I want? Likewise I'll be making my life insurance plans in the coming days/weeks