A common sense approach to an arrears query
In August, an approved introducer submitted a loan application to the United Trust Bank Specialised Mortgages team on behalf of their customer. The loan application was for £27,000 over a nine year term on our +4.45% Bank of England Tracker. The main purpose of the loan was £19,000 for home improvements and a further £8,000 to consolidate outstanding unsecured credit.
An approximate schedule of home improvement works had been provided, but during underwriting a potential issue was identified regarding the customer’s mortgage profile. The Mortgage Reference indicated that the customer’s mortgage may currently be one month in arrears and if so, the loan would not be suitable for a prime “0” status plan.
To prevent any delay in the application process, UTB contacted the first mortgage lender directly to discuss the potential arrears. They confirmed verbally that the customer’s payments were due on the 20th of each month, but that they would record as arrears if not made within the calendar month due. The lender also confirmed the customer’s direct debit was set up for a few days later which meant that payments had been made outside of the calendar month. Looking at a 12 month payment profile we were satisfied that these payments were made within one calendar month of the due date and therefore satisfied our criteria.
This verbal confirmation was promptly followed up with a letter from the first mortgage lender together with a 12 month payment profile, and with the introducer forwarding the mortgage valuation, all underwriting requirements were satisfied. Despite the initial issue surrounding proof of mortgage payments, the loan was approved two days after receipt of the application.
United Trust Bank’s proactive and common-sense approach resulted in a quick turnaround for the broker and the borrower, all thanks to our clear and flexible lending guidelines.