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Mortgage Decisions in 20 Minutes, But Beware

by Sarah Halloran

Well, that’s a decision in principle in 20 minutes at least, but it still shaves a lot of time off the normal application process.  HSBC has rolled out its new ’20 minute’ system in a bid to meet growing consumer demand.

People no longer want to visit their bank or building society to fill out mountains of paperwork or face scrutiny in a stuffy office.  They want quick results from remote services they can access from anywhere.  More and more lenders are beginning to recognise this trend and offering user-friendly and more responsive application systems.

However, convenience can sometimes be a bad thing.  Let’s say you apply online for one mortgage product and get turned down, there is nothing to stop you going to another lender’s website and starting another quick fire application and continuing the process until you find a lender that gives you a decision in principle.  If you do decide to do this you could be setting yourself up for huge problems.  Every time you make a fresh application it leaves a ‘footprint’ on your credit file.  Each lender will run a credit history search on you and a record is left of that search and made available for all potential lenders to see.  Now, if they see you have made a lot of applications in quick succession they are going to smell a rat.  Lots of searches on your credit file can often result in you being turned down flat for a mortgage by every future lender you approach.

Whilst it’s never been easier to apply for a mortgage online, unless you are certain of the product you want to apply for and the likelihood of being approved, you should always get some advice from a qualified whole of market mortgage advisor.  They will have access to the latest mortgage products available and have the expertise to choose the right product to suit your needs.  Even if you have a poor credit history or low deposit, there is usually a product that fits the bill although interest rates will be higher with these products.

In the 20 minutes it could take you to apply for a mortgage and get turned down, you could have spent the same time chatting to a mortgage advisor and getting some sensible advice and a great deal.  That’s not to say you will get turned down of course.  Many lenders have different lending criteria and even those with an excellent credit rating can get turned down.  Mortgage advisors know the market, the criteria you need to meet, and how to overcome potential problems.

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