Final Credit Check Before Completion

It’s common for mortgage lenders to carry out a final credit check before completion, which can sometimes make people nervous.

In this article, we’ll explain what final credit checks entail, how to boost your chances of passing one and what to do if your mortgage has been declined.

What do final mortgage credit checks involve?

It’s common for borrowers to undergo an initial soft credit check during the agreement-in-principle stage, followed by a hard credit check during their formal mortgage application. Some mortgage lenders will also perform a final hard credit check before completion.

The purpose of this is to make sure that your financial circumstances haven’t changed since you received your mortgage offer (which could be months prior). The lender will be looking for any new activity that could impact your ability to afford the mortgage.

They will thoroughly examine your application and cross-check the following details…

• Your income
• Outgoings and debts
• Credit history
• Age
• Number of dependents
• Whether any risk factors are present, such as a history of gambling

When do final mortgage credits take place?

A final credit check can occur at any time in the latter stages of the process, including before the exchange of contracts, on the day of exchange, after the contract exchange or right before completion. This will typically involve a hard credit check that mortgage lenders conduct.

What lenders look for during these checks

Above all, the lender will be keen to see that nothing has changed since you filed your application. Changes in circumstances, such as a substantial pay cut or new credit issues appearing on your credit report, may cause the lender to withdraw your offer before completion.

Many people feel nervous ahead of a final credit check because they’ve noticed their credit score dipped when they made their mortgage application.

But you can rest assured that this is a common and temporary issue. Lenders know that credit scores can dip after a mortgage application, and most will overlook this, assuming this is the only reason your credit score has dropped.

How to increase your chances of passing these assessments

If you’re worried you might fail your mortgage lender’s final credit checks for a reason more serious than a slight dip in your credit score, speak to a mortgage broker.

This is in your best interest as the right mortgage broker can increase your chances of passing the final credit check by providing the following services…

• Oversee the exchange of contracts and suggest ways to avoid delays or withdrawals.
• Advise you on how to keep your credit report intact before the final checks.
• Spot any issues that might derail your application and help you solve them
• Renegotiate with the lender on your behalf if your circumstances have changed
• Help you avoid losing any upfront fees you paid if the lender finds an issue
• Approach a new lender if they feel you have a better chance of securing the mortgage you need in light of any new information that is now showing on your credit history

Your mortgage broker can also increase your chances of approval if you’ve requested any changes to your application since it was filed. For instance, the lender might be more thorough with their checks if you’ve increased the amount you want to borrow or asked to add another person to the application since the agreement in principle stage.

Your broker will lead the renegotiations and can advise you about whether these changes are likely to cause problems during the final credit checks.

What to do if you’ve failed them

Keep in mind that you could still have options. There might be grounds to appeal against the lender’s decision or a better deal with another mortgage lender.

Following these steps can help you get things back on track as quickly as possible…

• Find out why: It’s essential to speak directly with the lender to establish precisely why they have reached this decision. Once you have this information, you can take the appropriate steps to resolve this issue. 
• Don’t reapply immediately: The lender will likely have carried out a hard credit search during the final checks, so lodging another application so soon could negatively impact your credit file and set your plans back even further.
• Get professional advice: Your application has hit a setback, so it’s vitally important that you do everything the right way from this point, and that means seeking advice from a professional who can guide you through the following steps. The right mortgage advisor could help you appeal against the lender’s decision to withdraw your application or find an alternative lender offering a better deal.
• We can place you with the right advisor. We have mortgage advisors who specialise in helping customers who’ve fallen at the final hurdle. They’re experts in finding better deals for these borrowers and renegotiating with the lenders who declined them during the final credit checks.