When will I know if my mortgage has been approved??

Puma21_2

Dear all,

I completed my very first mortgage application last weekend. My broker said it should take 1-2 weeks before I hear anything. I have applied to GE money as my credit history is rubbish. Am I right by thinking that once they have taken payment for the survey the mortgage is practically approved, apart from the results of the survey?

I am so so so nervous about the whole thing....may sound silly but finding it hard to sleep!

Can anyone advise me?

Thank you for your help.

minimike2

Not really, especially not in the current climate and the fact that its GE who arent the fastest at processing.

Nothing is ever set in stone until you get your mortgage offer, which can take anything from a few days to a few weeks, sometimes longer. Even then it can technically be withdrawn, although this does not happen too much.

If a valuation has been instructed, then it sounds like the mortgage is "Agreed in Principle", which is a good sign as long as all the info given stacks up.

Puma21_2

Thank you for this info. Before I applied I was told by my broker that GE had given me an agreement in principal? Is this a better sign?

minimike2

Yes, that means they have looked at your income and outgoings, deposit etc and done a basic credit score (usually) and compared that to thier lending criteria and that based on that information, subject to valuation, full credit check (if not already done) and assesment of your supporting documentation (payslips, bank statements etc) that they would be happy to lend to you.

Puma21_2

Great...my last question is I have an overdraft which I sometimes go over...I have recently been awarded a significant pay rise (£8k)...hard question to answer but I am a little concerned GE will refuse to lend to me as I sometimes go over my overdraft? Do they always ask for bank statements?

Once again, thank you for your help.

minimike2

It usually depends on the loan to value. I would suggest that given the current climate they are more likely than not to ask for at least one bank statement - as long as all your payments are being made on time and you dont massively exceed the limit then GE should be ok.....if it goes over a few times a month and there are lots of charges they will probably ask why it happens before proceeding, but they are quite a leniant company in general.

Puma21_2

Mike, thank you for taking the time to answer my questions. I am borrowing 95%. All my direct debits and standing orders have been paid on time. This month my account went over because I have been saving hard for the deposit, whilst paying all my other bills etc. I quickly put it right so I have money available. I am going in with my girlfriend. We have a combined salary of about £60k.

So GE often do not just say no, they ask for explannations if things look strange?

minimike2

At 95% they will be asking questions. Im not saying they just lend to anyone - at 95% they actually do more credit scoring and underwriting - the good news is they do the scoring for 95% at DIP stage (I think - this is what thier BDM told me anyway) so that bit *should* be out the way. As long as all the bills are up to date and paid on time and the account goes back into its limit quickly then I cant see them having a problem with it, especially if the statements show that money is being transfered out into a savings account for the deposit. Be prepared to answer some questions, but I wouldnt have thought there is much need to panic - just make sure you keep in touch with your broker to make sure they are on top of it all.

Puma21_2

Once again thank you...I may be able to get some sleep tonight!

I have checked my credit file and First National Homes (GE arm I think), did a credit check about 5 days before my application which must of been the DIP?

Do you find them a fair company to deal with? I have been offered a loan by my bank which would not cost much but would put me in the black...do you think I should take it, or hold off till GE look at it all?

minimike2

Yes First National is GE.

I deal with them a fair bit as they are leniant in thier lending criteria at the moment. They arent the fastest at getting things done, and the way they do business is quite old fashinoned, however I have no real complaints or issues with them at all.

Dont take the bank loan....1. They will be offering it to you as they are incentivised to sell loans to people. 2. If its just to pay the overdraft you will probably just use the overdraft again and be left with double the debt. 3. They will try and sell you overpriced PPI and 4. The mortgage DIP will be rendered useless as it would need to be re-assesed with the new loan in place.

Puma21_2

Thats good to know from someone who deals with them on a professional level, thank you.

My bank contacted me about it. I explanned about the mortgage and they kind of suggested the loan to cover the overdraft. I was silly and thought mortgages companies would not like people with overdrafts...but most people I know have them!

They did a credit serach and said I would be eligable for a loan, but this was after the DIP and I have not signed anything. Do I need to tell GE about this search or just ignore it and hope the search for the DIP is all they needed?