4 months of bank statements for an AIP?

NannyPlum89

Hi all,
My husband and I are first time buyers, and we are looking to purchase a new build with Gleeson once COVID-19 situation has calmed down. We've been speaking with Meridian Mortgages, who are Gleeson's preferred broker.  We obviously need an idea of how much we can borrow, so we know which properties are suitable; however, Meridian are saying they will only help us if we give them "a copy of our credit report and 4 months' bank statements so the credit check can be done'. When we asked why they needed bank statements at this early stage, they insisted they are needed so they could 'do they credit check'. Despite us telling them we just need an idea of how much we can potentially borrow at this stage,  they are adamant we have to hand over the bank statements. 
Is this standard procedure? As it was my understanding that A) the broker wouldnt be the ones doing a credit check, and b) bank statements wouldnt be necessary at AIP stage?

Thank you

[Deleted User]

NannyPlum89 said:

Hi all,
My husband and I are first time buyers, and we are looking to purchase a new build with Gleeson once COVID-19 situation has calmed down. We've been speaking with Meridian Mortgages, who are Gleeson's preferred broker.  We obviously need an idea of how much we can borrow, so we know which properties are suitable; however, Meridian are saying they will only help us if we give them "a copy of our credit report and 4 months' bank statements so the credit check can be done'. When we asked why they needed bank statements at this early stage, they insisted they are needed so they could 'do they credit check'. Despite us telling them we just need an idea of how much we can potentially borrow at this stage,  they are adamant we have to hand over the bank statements. 
Is this standard procedure? As it was my understanding that A) the broker wouldnt be the ones doing a credit check, and b) bank statements wouldnt be necessary at AIP stage?

Thank you

How would the broker know who to get an AIP from if the broker doesn't know your credit profile or spending?  The broker could end up getting an AIP from a lender who would never lend you that much, or at all, based on something in your credit history or bank statements.  What good would that be to you?

amnblog

Sounds like Meridian are dragging you to point C when you are only looking to get to point A.
Ignore them and consult another Broker.

[Deleted User]

Personally I prefer to have bank statements at AIP stage.  Maybe not for an affordability check, can take all that info verbally.  
If I'm going to the effort of getting an AIP and having you think you can borrow that much I want to see what your accounts look like before going a lender. 

I got stung years ago with a client passing credit check and affordability but once I got the bank statements there were over the overdraft multiple times a month. Passed aip checks, passed application as well but got thrown out by underwriting.   Ended up going to a lender that didn't ask for bank statements on application to get it through. 
Not having the bank statements up front wasted my time and caused the client to worry when I told them to aip wouldn't be valid based on the account conduct.  
So I try to get as much as possible now to avoid that situation again
It's not an unreasonable request for getting an AIP

NannyPlum89

Thanks for all of your replies, just wanted to check it was normal procedure as friends and family who I've spoken to couldn't understand why they wanted them at this early stage.

ACG

You dont need bank statements for a DIP but at the same time you dont need a DIP to determine if you can get a mortgage. 

Probably 90% of the time, we get a DIP about 20 seconds before we submit the full application. The only exception to that is when the EA is saying they need it. 

We typically go through the credit report and can tell if we can get a Mortgage for the customer or not. What happens if I get you a DIP today with say Natwest (hard footprint) as they are the cheapest and then 2 days later we submit the full application and Nationwide are the cheapest?... 2 credit checks in 2 days. Not the end of the world but a waste of our time and doesnt help your credit score. 

[Deleted User]

To me the Brokers are being diligent. Getting a feel for your spending profile, how you conduct your finances etc. Looking at whether you are top end of credit available or near the bottom. Do you pay off balances each month or just the minimum. Any cash advances, pay day loans etc. 

You can get a real feel for someones credit history by doing all the checks and then placing them with the correct lender. A more pickier lender may be more attuned to a certain borrower.   

jenks48

I has to supply bank statements to my broker ..to me its the broker do his job properly and going through them like a tooth comb before they get to the underwriters. Like Densol Said looking at cash spending and anything that you may have forgotten to mention. Saves slot of wastes time. Hope that helps.