Mortgage Applicants – Avoid Money Laundering Suspicions
The stamp duty holiday has created significant activity in the housing market. Many people are looking to move home soon so they can save on the stamp duty holiday, and this is leading to a backlog in the process.
Lenders are under significant pressure, and this is one of the reasons many people are calling for an extension to the stamp duty holiday.
Delays are happening in the mortgage market right now
Rob Hailstone is the founder of the Bold Legal Group (BLG) has spoken about the need for the stamp duty holiday to be extended. Rob has highlighted the significant pressure property market professionals, such as mortgage lenders are under, and how this is slowing down the market.
Rob said; “It is not just the demand side that is creating a challenge to the conveyancing profession, but also the dependence on outside parties to progress transactions. Covid-19 restrictions mean that many local authorities are operating under extreme difficulties and this has affected their ability to supply their own searches and also to provide access to data for personal search companies. In addition, many mortgage lenders are experiencing delays in supplying offer letters and the valuer profession is also under extreme pressure.”
Rob also shared an email from a member which read; “There are delays with searches, surveys, mortgage offers and pretty much every other aspect of the process. Chasing, on the face of it seems sensible, but the more we chase people the more they get distracted. You might get put to the top of the pile for a few moments but doesn’t seem to last for long.”
If you are applying for a mortgage, and there are problems, it is likely your application will be delayed even further. An issue all applicants should consider is mortgage application fraud, and the steps lenders take to avoid this problem.
Mortgage fraud is rising
Cifas research indicated the number of fraudulent applications on mortgages increased by 5% in 2019, and that 13% of British adults believe it is reasonable to exaggerate income on a mortgage application.
It might seem harmless, but it could cause you severe problems. At the very least, it could delay your application, but if you have made a fraudulent application, you could face a serious penalty.
Therefore, if you are looking to arrange a mortgage, take these steps to minimise the risk of making a fraudulent application which could delay the process, or cause your greater trouble:
- When you benefit from a gifted deposit, make every effort to show that it is genuine, including a signed letter or document from the person gifting the money. Also, include a signed letter which states the person gifting the money doesn’t receive any right to the property
- When you benefit from an inheritance, offer information which allows this money to be traced and verified
- If you have saved a considerable sum of money, please include Bank statements showing a build-up of funds over 3 – 6 months
- DO Not use your credit card to fund your deposit. Most lenders will reject an application when a credit card is used for funding the deposit
- Make sure you are listed on the electoral roll
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.