Buying a home is an exciting milestone, but the mortgage process can feel daunting. One key stage is the final checks lenders complete before releasing funds at completion. These last-minute verifications ensure your finances remain stable
Knowing what these last checks entails helps you get ready and avoids stressful surprises. This guide tells you about the most important checks that mortgage lenders do before the deal is finalized, so you know what to expect.
Why Final Checks Matter
Final checks serve a crucial purpose. For lenders, they mitigate risk before committing significant funds. For borrowers, they provide reassurance that everything is proceeding smoothly.
These checks make sure that your finances haven’t gotten worse since the loan was first approved. This keeps the lender safe by proving that you are still a good borrower who can pay back the mortgage.
If you know what these checks are for, you can take steps to keep your finances in order to pass them easily. If you don’t do these last checks, your mortgage could be in danger at the last minute, which is something no buyer wants.
Timing of Final Checks
When exactly do lenders perform these final looks at your finances? It varies by lender, but commonly occurs:
- Just before releasing mortgage funds, often 1-2 weeks before completion
- After contracts are exchanged but before completion date
- On the day of completion itself
The conveyancing solicitor usually triggers the checks by requesting funds from the lender. So stay financially tidy as you approach this key timeline.
What Do Final Checks Include?
Lenders scrutinize several aspects of your finances, credit, and the property during final checks:
Employment and Income
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Employment verification – Lenders reconfirm your employment status and salary to ensure stability.
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Income verification – Recent pay slips and bank statements are reviewed to corroborate your income levels haven’t reduced.
Credit Profile and History
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Credit report check – Any changes to your credit score or new accounts could raise concerns.
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Mortgage payments – Your payment history on existing mortgages is examined for late or missed payments.
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Other loan payments – Repayment history on all credit facilities like credit cards, car loans etc. are checked.
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Credit utilization – High balances close to credit limits may worry lenders about over-reliance on credit.
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New credit applications – Too many recent applications could indicate financial stress.
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Public records – Lenders verify no new public records like bankruptcies, foreclosures, judgments etc.
Major Life Changes
- Change in marital status
- Job loss or becoming self-employed
- Increase in financial dependents
- Taking on additional debts
Property Checks
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Valuation – The property is revalued to ensure no price drops.
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Building inspection – Checks for any damage or required repairs are conducted.
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Title search – Confirmation that the title and ownership are clear.
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Home insurance – Proof home insurance is arranged.
Preparing for Final Checks
Follow these tips to confidently breeze through the lender’s final verification:
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Avoid taking new credit or loans before completion.
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Make timely repayments on existing debts.
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Don’t change jobs or income sources.
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Keep credit card balances low.
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Maintain your current standard of living.
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Inform lenders of any major life changes.
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Respond quickly to lender requests for documents.
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Be upfront about any property repairs needed.
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Have home insurance lined up in advance.
What If You Fail?
If final checks uncover issues, don’t panic. You may be able to provide clarification or extra documentation to satisfy the lender’s concerns.
As examples:
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For a credit score drop, show factors were temporary like medical bills.
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For a job change, provide proof of equal or higher income.
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For high card utilization, show recent balances lowered.
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For repairs needed, provide contractor cost estimates.
If the lender remains unwilling to proceed, your mortgage broker can be invaluable in finding alternative options or appealing the decision.
So stay in close contact with your broker and respond swiftly to any lender queries. Acting quickly to address problems demonstrates financial responsibility and can help get the mortgage back on track.
The Bottom Line
Completing lenders’ final checks before releasing mortgage funds is mandatory, but understanding the process helps you stay in control. Expect thorough verification of your credit, income, employment, and property condition right before completion.
With preparation and diligent financial habits in the lead up, you can pass these final checks smoothly. Stay financially tidy, promptly address any issues that appear, and work closely with your broker for guidance.
By knowing what to expect and taking proactive steps, you can complete the mortgage finish line with confidence and finally get the keys to your new home!
What Exactly Do Lenders Look at in a Final Check?
During the final credit check, the lender will scrutinise several key areas of your financial profile.
Here’s what you can expect them to examine:
- Credit Report & History. They’ll take an in-depth look at your current credit report and history. This includes checking for any new credit accounts opened, payment delinquencies, debt levels, and your overall credit utilisation.
- Income & Employment. Verifying your income and employment status is crucial. The lender wants to confirm you’re still earning the same amount and have maintained job stability since initially applying.
- Spending Habits and Outgoing. Your regular outgoings and expenditures will also come under the microscope. Any significant increases or new financial commitments could raise red flags about your ability to comfortably afford the mortgage repayments.
- Major Life Changes. Finally, the lender will be on the lookout for any major life changes that could impact your mortgage application – things like a new job, becoming self-employed, or acquiring additional financial dependents.
When Do Lenders Perform Final Checks?
Lenders perform final checks right before you sign on the dotted line. This could be just before exchanging contracts or even on the day of completion.
It’s a tense moment, especially if your finances have shifted since you first applied.
But don’t worry. If you’ve kept things steady, there’s no reason to stress.
The lender just wants to ensure everything is in order before they give you the green light. They’re simply crossing the final t’s and dotting the last i’s.
What do lenders check before closing?
FAQ
When is a credit check done for a mortgage?
The final credit checks are done just before your mortgage officially starts. Your conveyancing solicitor will make a request to the lender to send them the mortgage funds. If you are moving house this will happen a few days before completion is due.
When do mortgage lenders check a property?
Some lenders, on the other hand, will do a hard check when your home purchase is almost over (before, during, or after the exchange day) or before the completion day. What do mortgage lenders check?.
What does a mortgage lender look at during a final check?
During their final checks, the main thing a lender will look at is whether anything has changed that could have hurt your credit score or ability to pay back the loan. If this has happened, they may not think you are suitable for the mortgage anymore.
Do you need a credit check to get a mortgage?
A lender will have to do either a soft or hard credit check before giving you a mortgage, but most of them will do the soft check. Some lenders, on the other hand, will do a hard check when your home purchase is almost over (before, during, or after the exchange day) or before the completion day.
When should a mortgage company do a final check?
Most of the time, their final check is just them confirming the details they have about you are right, and if nothing has changed there is nothing to be concerned about. They can decide to do these checks at any point later in the mortgage process, right up until the day of completion.
What is a final mortgage credit check?
A final mortgage credit check is the last step lenders take before they approve your mortgage. They review your credit history again to ensure nothing has changed since your initial application. It’s their way of confirming you’re still a reliable borrower. This check ensures you haven’t taken on new debts or missed any payments.
Do mortgage lenders check again before completion?
When you are applying for a mortgage, it is standard for the lender to check your credit score and history before approving your application. However, you may not be aware that they also check this again at a later point – before the mortgage amount is transferred and your purchase is completed.
What do lenders check right before closing?
Some things a lender checks before closing include your credit score, income and debts. Lenders are primarily looking to ensure nothing has changed since you initially applied for the mortgage.
What checks do mortgage lenders do?
Looking at recent bank statements for any irresponsible spending patterns including evidence of regular gambling. Checking repayments and balances on existing credit accounts. Evidence of the source of your deposit.
Do mortgage lenders check bank statements before closing?
Yes. Even after you’ve been pre-approved, underwriters may do a final check on your bank statements for a mortgage before closing.Mar 17, 2025