Updated: January 21, 2022

What Checks Do Mortgage Lenders Do Before Completion?

Mortgage lenders do final checks before completion - find out exactly what they are and what to do in the worst-case scenarios in our in-depth guide!

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: January 21, 2022

Getting a mortgage can be a tricky process to navigate. Even when an  agreement in principle (AIP) has been made, a lender can withdraw their offer at the last minute following their final credit check.

By following this guide, you’ll have a better understanding of what a lender is looking for, why they could still decline your application so late in the process and some steps you can take should the worst happen to you.

What is a final mortgage credit check?

For the majority of people buying a house, the final credit check should merely be a case of the mortgage lender confirming what they already know about your financial circumstances.

Prior to your AIP they will have already examined your suitability by looking at your:

  • Evidence of earnings
  • Credit reports
  • Income and outgoings
  • Other outstanding debts
  • Age

However, the homebuying process can be notoriously lengthy and a number of months may have passed since these checks were carried out. This means your lender will want to ensure nothing has changed before they release the funds to you at the completion stage.

This final check is usually one of the last steps in the process and it takes place after contracts have been exchanged. If anything related to your credit score or affordability has changed significantly your lender can withdraw their mortgage offer.

A sale falling through at the last minute can cause significant stress. An experienced mortgage broker will have encountered this type of scenario before and can help manage the situation, should it arise, and regain control of your plans.

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What does the lender look for?

All lenders want the same thing; complete confidence that the money they lend to you can be repaid. So, when it comes to the final credit check, a lender is simply acting in a diligent manner by conducting one last review of your finances before giving the green light.

They will want to double check:

  • How much you still owe on any credit cards, loans, other mortgages and overdrafts – has anything changed since the previous check?
    • Importantly – are you still up to date with all your payments?
  • Has your credit score changed? If so (negatively), what has caused this?
  • Are you still with the same employer and level of earnings?
    • If this has changed – how could this impact upon your ability to meet the mortgage repayments?
  • Are the funds for your deposit still available – if not, why not?
  • If it’s been a number of months since the process began, they may request a new valuation on the property to ensure the valuation and condition is still the same

What happens if you fail the last credit check?

Worst case scenario – your lender will withdraw their original AIP and your mortgage will not be approved. At least not until the issue which has caused this has been resolved. If it can’t be resolved, you won’t be able to borrow the money you need to buy your property.

Lenders have the right to withdraw their offer if it becomes clear that your circumstances have changed, if the original offer was made in error or due to incorrect information being provided. Unfortunately, in some cases this can happen even on the day of completion.

Failing affordability can be the most common reason for this. Buying a house can be a long and drawn-out process sometimes, and life goes on. A common trap is new car finance. Our network of advisers will always remind you to not take out any new credit agreements during the homebuying process.

What steps can you take if this happens?

If you’ve recently failed the last credit check and subsequently had your mortgage offer withdrawn by a lender – don’t panic!  There’s a few simple steps you can take that will help you get the process back on track:

  1. Get a copy of your credit record to establish what the issue is. Is it something which can be remedied easily? For example, is it one missed payment on a loan which can be repaid quickly?
  2. Is it because you changed jobs? If so – can you provide new evidence of earnings and/or a new employment contract?
  3. Speak to an experienced mortgage broker. They will already know how to approach situations like this and ensure you make the right decisions swiftly so you can avoid missing out on the property you want to buy.

Our unique broker-matching service is designed to find the right advisor to deal with your specific needs. If you make an enquiry we will arrange for an expert in this area to speak to you straight away.

How to boost your chances of passing the final credit checks

To avoid falling at the last hurdle, there’s a number of things you should avoid doing during the mortgage application process which could affect your financial situation, namely:

  • Speak to a mortgage broker (see the next section for more on this)
  • Don’t apply for any new lines of credit
  • Don’t miss any bills or loan payments
  • If you change jobs – let the lender know straight away and provide all your new employment details (salary, contract terms etc.)
  • Don’t leave out any key information when you first apply – if in doubt, speak to your broker and ask for advice

Speak to an experienced mortgage broker

Failing the final credit check, having gone all the way through the process, can be pretty demoralising. But, there are things you can do to avoid this happening.

If the worst does happen, it doesn’t mean that all is lost. An experienced mortgage broker can guide you back onto the right track and help identify and then resolve the issues which may have caused this.

We can make sure you are matched with someone who understands your specific needs. Give us a call on 0808 189 0463 or get in touch and we will arrange for an expert to speak to you directly.

FAQs

How long do final checks take on a mortgage?

Depending on the lender, the final credit checks can be completed in a couple of days. In some cases, they can be done on the same day they’re started. If you follow the steps outlined above, your chances of getting the response you need will be far greater.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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