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Mortgage Underwriting is the term used to describe a mortgage product's lending criteria and tolerances. The Underwriting parameters are set by the lender, and are designed to filter the type of applicant they are prepared to accept.
This page delves deeper into Mortgage Underwriting and how it works, and the kind of things that will be taken into account when assessing the borrower's circumstances, together with how we can help arrange your mortgage, even in the trickiest of circumstances!
Table of Contents:
So then, as we touched upon above Mortgage Underwriting is the word used to describe a mortgage product's lending criteria and tolerances.
The Mortgage Underwriting parameters are set by the Mortgage Lender, and are designed to filter the type of applicant they are prepared to accept.
Some or all of the following aspects of a borrower's circumstances will be taken into account when the mortgage underwriting criteria is set:
Thus, an all-status lender setting the underwriting tolerances for the following two mortgage products is likely to impose considerably stricter underwriting criteria on Mortgage Product 1 than Mortgage Product 2:
For example, from the list of underwriting aspects shown above, the two mortgage products could have the following mortgage underwriting terms imposed:
| Mortgage Underwriting Aspect: | Mortgage Product 1 Tolerances: | Mortgage Product 2 Tolerances: |
|---|---|---|
| Maximum LTV | 95% | 80% |
| Minimum Deposit | 5% | 20% |
| Property type | No flats or non-standard property construction | All considered |
| Min. Property Value | £100,000 | £50,000 |
| Basic Income | 3.5x | 4x |
| 3-yr employment history | Required | Not required |
| Regular Overtime/Bonus | 1x | Considered at 4x |
| Secondary Income | Not considered | Considered at 4x |
| Loan Term | To be repaid by age 65 | To be repaid by age 85 |
| Residential History | 3 years | 1 year |
| Mortgage History | 2 years | Last 12 months |
| Prev. Mortgage Arrears | None | 4m in last 12 months |
| CCJ's | 1-Max £100 and satisfied | 4-of any amount |
| Credit Defaults | 1-Satisfied | Ignored |
| IVA/Ex-Bankruptcy | Not considered | Considered |
Please note the above example table is just that, an example table which is for illustrative purposes only to demonstrate how Mortgage Underwriting works.
So, as can be seen, mortgage underwriting criteria for Mortgage Product 1 will quickly stem the flow to those borrowers whose circumstances are "prime" in nature. Those who do qualify will enjoy the opportunity to borrow a higher loan to valuation, on much more attractive terms.
Whereas there is much more flexibility permitted within the underwriting criteria on Mortgage Product 2, although borrowers on this plan will be restricted to borrowing a maximum of 80% LTV on much less favourable interest rate terms.
Yes, we certainly can!
As specialist mortgage brokers, we have a range of schemes to help, whatever your circumstances might be. As you are probably aware, Shire Direct is authorised and regulated by the Financial Services Authority, and we will provide you with advice and a recommendation on a mortgage product drawn from our extensive portfolio of lenders and plans contained within our lender panels that are designed to cover your needs, circumstances, and aspirations - whatever your requirements!
Today's mortgage market can appear quite daunting and overwhelming, especially with the vast array of different mortgage product types and jargon in use left, right and centre! So, it's understandable that choosing the right product for you can seem like your worst nightmare! That's where Shire Direct can step in and really help!
Our lender panels are geared to provide a comprehensive selection to enable us to find and provide the most appropriate mortgage scheme for you. We are confident that you will find our approach to be slick and pragmatic. We'll provide you with a rapid in-principle decision, and we work closely with the lender, solicitor and property valuer to ensure we achieve a suitable offer of mortgage as quickly as possible.
There's a tremendous range of mortgage products in the marketplace these days, and our lender panels provide our customers with a wealth of choice including:
Arranging a mortgage - the right mortgage, is crucial. We pride ourselves in offering a friendly and personal service. So the first thing we do is get to understand your circumstances, needs, requirements and aspirations. Afterall, your mortgage is usually the largest financial transaction you'll ever enter into, and getting it right from the outset is extremely important.
Our lender panels provide us with an extensive range of plans to accommodate most circumstances, including:
Simply give us a call and let us weave our mortgage underwriting magic to find the most suitable mortgage product for your needs, requirements, circumstances and aspirations. You can call us free on Freephone 08000 282 281 (7 days a week until 10pm), or alternatively you may wish to enquire online at any time, its quick and simple to do!
We have the approach, the skills and the products to help even in the trickiest of circumstances. So get in touch today, you'll be glad you did!
So, that wraps up our look at Mortgage Underwriting, and how it works along with what aspects are taken into account during the mortgage underwriting process. We hope you found it to be useful. Don't forget there is a wealth of mortgage related information throughout our website, and that we're only ever a freephone call or couple of mouse clicks away and would love to hear from you. So why not put a few moments aside and explore some of the possibilities that could be open to you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
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