In this brief blog, we are going to discuss the final checks before a mortgage offer at RBS.

What are the final checks before a mortgage offer at RBS?

RBS may carry out a variety of checks before they offer a mortgage, some of these final checks include:

Identity check

RBS may carry out a final identity check to ensure your identity is the actual identity that you have given. This may involve carrying out a variety of third-party checks using various software and databases.

These identity checks may also involve checks carried out on anti-money laundering, fraud, or similar databases to ensure you are not an individual to which RBS should not be lending.

Income verification check

Another final check which RBS may conduct before they offer you a mortgage is a check on your income.

RBS will do this to ensure the income you stated is the actual income you earn.

RBS may do this by checking the data on the payslips which you previously submitted but they may also crosscheck this by checking your banking transactions using open banking or your bank statements.

A credit check

RBS may also carry out a final credit check to ensure that your creditworthiness has not changed since you submitted your RBS mortgage application.

If your credit score or history has changed due to bad credit behaviour such as the below then you may find it very hard to get a RBS mortgage.

Bad credit includes:

  • Country court judgment
  • Bankruptcy
  • Home repossession
  • Debt management plans
  • Individual voluntary arrangements
  • Missed credit repayments
  • Arrears
  • Defaults
  • Late credit repayments

Proof of deposit check

Another final check which RBS may carry out before providing you with a mortgage offer includes checking to see if the mortgage deposit you stated remains the same and if you have proof that the mortgage deposit is in your possession at this time.

Property valuation check

Although not primarily a final check, a property valuation check is something RBS may do before providing you with a mortgage offer.

If the property valuation check indicates that the property is overvalued then RBS may not present you with a mortgage offer.

Government scheme check

RBS may do a final check to see if you have the authority to proceed letter from the Government scheme agent before deciding on whether to offer you a mortgage or not.

Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.

Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.

Government schemes are not available to you if you are getting a buy to let mortgage.

The Government schemes include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy– allows you to buy your home at a discount price.
  • Preserved right to buy– same as above.
  • Right to acquire– similar to the above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Other change of circumstances

RBS may also come back to you to ask some final questions on if you have had any significant change of circumstances since you submitted your mortgage application.

These could include expecting a child, losing your job or similar circumstances which may affect your ability to afford a mortgage.

Use a mortgage broker for your new home

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details out the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

FAQs

Some of the most frequently asked questions in regards to the final checks RBS carries out before producing a mortgage offer.

Can RBS withdraw a mortgage offer?

Yes, RBS can withdraw a mortgage offer if they feel the mortgage offer was made in error or if you have had a change of circumstances before completion.

Will RBS do another credit check before completion?

RBS may carry out another credit check before mortgage completion to ensure that you have not had any severe change in circumstances that may affect your ability to pay back your mortgage.

Can a mortgage be declined after offer?

Yes, a mortgage can be declined after offer if the mortgage lender discovers anything which may affect your ability to keep up your monthly mortgage repayments.

In this brief blog, we are going to discuss the final checks before a mortgage offer at RBS.

If you have any questions or comments please let us know.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.