As ever, the application process for a secured loan usually starts with a phone call, email or fax (yes, fax machines still exist) from one of our introducing brokers.

Stage 1 – initial fact find

During that initial call we will carry out a basic fact find. Although the loan amounts on secured loans are generally much lower than on bridging loans, the secured loan fact find is actually much more detailed as a far greater emphasis is placed on income and affordability.

The fact find will cover off areas such as:

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• Full name, DOB and three years’ of addresses

• Details of the property being used as the security

• Employment status, e.g. employed, self-employed

• If self-employed, limited company or sole trader?

• Availability of proof of income, e.g. payslips, accountant’s details or SA302?

Once we have all this information we will know whether or not the application is likely to succeed and with which lender.

Stage 2 – searches

Nine times out of 10 we will be able to offer an instant decision and indicative terms subject to credit and Land Registry searches, which we ask the broker to approve on behalf of the client.

Once the results of the searches come back, we will then know 100% whether or not the loan application can go ahead.

Depending on the results of the credit search, the loan could be offered on slightly amended terms, e.g. a higher interest rate or a lower LTV.

Stage 3 – client contact

At this point, if the broker didn’t ask us to deal with the client directly from the very start (this can happen), we will ask for his or her permission to speak to the client direct.

The client will be talked at length through all fees, the size of the loan, its terms and conditions and all other relevant information.

At this point, how the application proceeds depends on whether or not the loan is secured against the applicant’s main house or a buy-to-let property.

If the former, it will be classified as a CCA-regulated loan, while a loan secured against a buy-to-let property will not be regulated. Let’s look at CCA-regulated loans first.

Stage 4 – CCA-regulated loans

With CCA-regulated loans, once someone at Enterprise has called the client and talked them through the details of the loan, we will issue a pack containing all the relevant loan documentation, which the client must fill in and return.

They will be required to formally provide full proof of ID, address and proof of income, e.g. SA302, accountant’s details, pensions awards letters or payslips if retired, or even proof of benefits.

Essentially, everything that was discussed with the broker in the first call will now need to be supplied by the client.

During the call, we will also explain to the client that we will not be in touch during the next eight days, as we are required to enter into a legal consideration, or ‘cooling-off’ period. The same applies to the client’s broker.

Eight days later, and presuming we have received back all the information requested in the first pack, we will send the client a second pack of documents containing the legal credit agreement and the mortgage deed.

At this point, we then enter into a second 8-day cooling-off period but this period can be broken once the legal credit agreement and mortgage deed have been returned.

 

Stage 5 – consent and valuation

Once both sets of documents comprising all necessary paperwork have been signed and returned, we set out to obtain a mortgage reference or consent to a second charge from the first charge lender. Once these have been arranged, we have almost everything we need on file to support the application.

The last thing to do is to instruct the valuation, which will be carried out by a panel surveyor of whichever lender we will be submitting the loan to. This will generally come back to us within 48 hours. As ever, some lenders will accept a desktop valuation but in most cases a full valuation will be carried out.

Stage 6 – quality check

Presuming the valuation is satisfactory, whoever is dealing with the case will run it by a senior member of the Enterprise team, who will review it in detail one last time.

This is essentially a quality check we have in place to ensure that when the application does get to the lender, everything that should be in the case file is in the case file.

We carry out this final quality check as it speeds up the completion process with the lender.

Stage 7 – submit case file

After the quality check, we will submit the full case file to the lender. Some lenders are happy to receive everything on email, others prefer to receive everything in the post.

It’s also worth pointing out that certain lenders will allow us to submit a part-completed pack half-way through the application so that they can start assessing it in advance.

This clearly speeds the process up even further as they only have to press the button once the rest of the pack comes in.

Stage 8 – fraud check

Once the lender has all the information and is happy with it, prior to drawdown of the funds it will call the client directly and ask them some general security questions. This is merely to safeguard the borrower against fraud and does not constitute further due diligence.

Presuming the call is successful, the lender will then pass the fully completed case to its credit committee where it will be signed off by one or more directors.

Once this is done, the funds will be released, usually by BACS but sometimes in the form of a cheque. Typically, the whole process from start to finish will take three weeks.

The process above was for CCA-regulated loans. The process for loans secured against a buy-to-let property is the same but there is no 8-day legal consideration period. Clearly, this means they will typically be arranged quicker than CCA-regulated loans.