In this brief guide, we are going to discuss the RBS mortgage underwriting process.
You may be wondering about the RBS mortgage underwriting process because you are about to apply for a RBS mortgage or maybe you have already submitted your RBS mortgage application and the application process is ongoing.
The RBS mortgage underwriting process
The RBS mortgage underwriting process is the key stage of the mortgage application process that is undertaken by a RBS mortgage underwriter once you have made your RBS mortgage application.
The RBS mortgage underwriting process determines if you will be approved for a RBS mortgage and given a mortgage offer or if your RBS mortgage application will be rejected.
What Is Mortgage Underwriting?
Mortgage writing is the process in which a mortgage lender evaluates your suitability for a mortgage.
During the mortgage underwriting process, the mortgage underwriter will evaluate if lending you the mortgage funds are risky or not.
The whole aim of mortgage underwriting is to uncover your true mortgage affordability.
Some of the mortgage underwritings may be done by machines whilst the rest is done manually.
Automated Underwriting vs. Manual Underwriting
With automated underwriting, you will essentially input data into a form and this will be checked and cross-referenced with the mortgage lenders criteria by the mortgage lenders automated decision-making system.
This system will likely pull your credit score data and run a check to see if you meet the mortgage lenders’ minimum mortgage affordability criteria.
On the other hand, manual underwriting involves an individual(the mortgage underwriter) reviewing your mortgage documents to determine if you meet the mortgage lender’s mortgage affordability criteria.
The mortgage underwriter may request more documents from you and ask you follow-up questions in order to figure out your true mortgage affordability.
Manual mortgage underwriting usually helps those who have complex mortgage cases such as complex incomes, bad credit, non-standard construction properties etc.
What does a RBS mortgage underwriter look for?
When you submit your documents for your RBS mortgage application you may need to submit other supporting documents to prove that you can indeed afford a mortgage.
These documents include:
- Your banking statements
- Your tax returns
- Your credit report
- Your Identity documents
- Your payslips from your employer etc
Once the mortgage lender has received these documents they will then be given to the mortgage underwriter assigned to your mortgage application.
The mortgage underwriter may come back to you with further questions or when they need more clarification on things that you may have included in your mortgage application.
The faster you respond and get back to the mortgage lender, the faster your mortgage application process will be.
This is the case at RBS and most other mortgage lenders.
The steps of the RBS mortgage underwriting process
The steps of the RBS mortgage underwriting process include:
- Get a mortgage in principle
Getting a mortgage in principle is not a requirement for you to get a mortgage but typically some borrowers will look to get a RBS mortgage in principle so they could at least get the first indication on whether RBS is willing to lend to them or not.
Once RBS receives your mortgage in principle application they will either process your mortgage in principle application automatically or it may be reviewed manually.
A mortgage in principle will ensure that home sellers and estate agents take you more seriously as it shows that a mortgage lender is willing to lend to you.
A RBS mortgage underwriter may review your mortgage in principle application if it is put in for manual review but typically mortgage in principle applications are processed with an automated computer system.
- Make a mortgage application
Once you have found a house you want to buy, you may then go on and make a RBS mortgage application. Once you have made a your mortgage application you will then go through the RBS mortgage underwriting process which could either be manual underwriting or automated underwriting.
In the RBS mortgage underwriting process the RBS mortgage underwriter or the automated system will look at a key few things:
Your income verification:
RBS will aim to verify the income you stated on your mortgage application to ensure that you have sufficient income to afford your monthly mortgage repayments.
If the income you have stated on your RBS mortgage application is not identical to what the RBS mortgage underwriter finds on your supporting documents then your mortgage application may be declined.
The mortgage valuation will also be a key part of the RBS mortgage underwriting process.
The mortgage valuation is done to ensure that the mortgage lender is lending on a property that can be used as sufficient security for the mortgage.
If your property is valued much lower than the price which you are paying for it then the mortgage underwriter may reject your mortgage application as part of the RBS mortgage underwriting process.
You will usually have to pay for the mortgage valuation. This can range from £50 to £300 depending on the mortgage lender and these prices are subject to change.
Conveyancing is a key part of the RBS mortgage underwriting process. The mortgage underwriter will liaison with your conveyancer and the assigned RBS conveyancer to ensure the title on your property does not have any restrictive covenants.
If the RBS mortgage underwriter is informed of issues that may threaten the security of the mortgage in the future then the mortgage underwriter may decline your mortgage.
At this point. The RBS mortgage underwriter may also request to see your home insurance documents at this point of the RBS mortgage underwriting process.
At the end of the mortgage underwriting process, you will then either be approved for the mortgage, denied or your application may be referred to a senior underwriter for further scrutiny.
If you are approved for a RBS mortgage, you can then go on to complete your property purchase by exchanging contracts and setting a completion date.
In some cases, RBS may approve your mortgage application but with certain conditions e.g they may require you to make significant changes to your property or repairs.
If your mortgage application is rejected then you may need to find another mortgage lender to apply for a mortgage with or resubmit your mortgage application to RBS.
If your mortgage application is referred then it may be the case that RBS needs to take a closer look at your mortgage application before they make a final decision.
In this case, you can expect to have further follow-up questions and requests for more supporting documents.
Use a Government scheme to boost your mortgage affordability
Another way to improve your mortgage affordability is by using a Government scheme.
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.
Use a mortgage broker for your mortgage in principle
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: RBS mortgage underwriting process
How long does it take for the underwriter to make a decision?
An underwriter can take between 15 mins and 4 weeks to make a decision but this is dependant on what type of credit you are after and the type of borrower you are. If you are a bad credit borrower then you can expect your mortgage application to take much longer.
The time it will take for a mortgage underwriter also depends n what type of credit you are looking for. If you are getting a mortgage then you can expect an underwriter to take up to 2 weeks.
What happens when a mortgage goes to underwriting?
When a mortgage goes to underwriting this can be rather normal. In fact, most mortgage lenders will process mortgage applications with a mortgage underwriter.
The mortgage underwriter will then assess your mortgage application to see if you can afford the mortgage and if there are any issues that may put the mortgage in jeopardy in the future.
What do mortgage underwriters check?
A mortgage underwriter will check the below things:
Your credit score
Your supporting documents
The property valuation report
Can underwriters make exceptions?
In some cases, a mortgage lender may make exceptions rather than follow the exact criteria prescribed on their lending scorecards.
This is due to the fact that all mortgage applications are not the same and sometimes the mortgage lender may have to be flexible.
In this brief guide, we discussed the RBS mortgage underwriting process.
If you have any questions or comments please let us know.