One of the biggest concerns that many first time applicants share relates to the in depth checks and investigation undertaken by banks when it comes to checking whether or not a borrower is eligible. During this phase most lenders will perform a few traditional checks, including evaluating a credit report, but there are times where a bank might want to delve a little deeper into the borrowing potential of their applicant.
Why Does This Happen?
There could be any number of reasons why an applicant may face this possibility. In most instances if a bank feels that there might be something worth investigation, then they will usually employ measures to help them to explore their concerns. For example, if a borrower gives a loan advisor any reason to doubt their financial earnings, or if they don’t make the right impression during a meeting, but can still afford to repay what they intend to borrow – a bank might perform a deeper investigation.
In some cases, they might want to obtain a copy of a criminal record – just in case any fraudulent, or financially criminal activities have taken place. In other events they might just want to check the applicant’s level of health. The reason for this latter requirement might relate to concerns over whether or not the applicant will be physically able to repay what they intend to borrow; especially if they are already ill with a condition that may shorten their lifespan.
Why do Banks Have to be So Careful?
Think of banks and lenders like your everyday, run of the mill company. They will want to make the best decisions to ensure that they receive a profit, so they will usually do everything that they can to check that their investment will be a rewarding one. This is why they might want to delve a little deeper in to a possible borrower’s history – but it is worth noting that this is very rare.
In the majority of instances a lender will simply need a copy of financial reports, including net earnings, expenses and other financial factors that might play a role in a person’s borrowing potential. But if they are given reason to doubt the honesty, integrity, or the potential of an applicant – then it stands to good reason that they might want to investigate further.
The other option would be for them to reject the application in its entirety, so it’s actually a good thing if they seem keen to reassure themselves that they should go ahead with the investment. This is yet another reason why so many borrowers hire the services of a mortgage broker, as it can help to eliminate misunderstandings and inadvertent impressions that can often take place with a first meeting.