Mortgage Industry News

← Back

Longer waits for mortgage decision

Date: Fri, 22 Oct 04 Analysis

Paul Cooper, head of mortgages at Alliance and Leicester, has welcomed the forthcoming new mortgage regulation, but warned consumers to be prepared for a lengthier process when it comes to buying a home loan.

Mr Cooper urged consumers to shop around earlier for the best deal and encouraged them to decide in advance how much they want to borrow.

"On the whole Alliance & Leicester welcomes mortgage regulation, however there are some issues that consumers will need to be aware of post M-Day," he said.

"We believe new processes and documentation introduced, such as the Key Facts Illustrator (KFI) will provide borrowers with a better understanding of mortgages and a greater degree of transparency to compare and contrast mortgage products.

"We are likely to have a more confident and better informed borrower in the future."

But Mr Cooper warned that, as from November 1st, the mortgage application process will become more extensive and therefore even more time consuming.

"Consumers won't be able to just pop into a few branches during their lunch break to get three or four 'quick' quotes," he said.

Mr Cooper added: "Consumers will need to work out exactly how much they want to borrow and what information they'll need before they are able to apply.

"Although this has always been good advice, it will become vital post M-Day due to the changes in the mortgage application process."

"A good example of why this is the case is if we consider a customer who makes a mistake and mis-calculates the size of the loan they wish to take, whereas currently they would simply be able to call their lender and organise the additional funds [subject to their circumstances], as from November 1st, they may need to go through the entire mortgage application process again."

© 1998-2005 DeHavilland Information Services plc. All rights reserved.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.