Back in the pre-credit crunch days, applying for mortgages was a relative breeze. You might have spent an hour with your broker or building society advisor completing various forms. You may have had to provide one or two documents such as payslips or tax returns to prove your income. And you may have had to answer one or to specific questions about your income and outgoings.
However, in 2012 things are very different. Increasing numbers of mortgage applicants are being forced to undergo lengthy scrutiny when applying for a home loan and to explain every aspect of their financial affairs to potential lenders.
One of the leading UK mortgage brokers recently told The Guardian that "a standard mortgage application should not take more than an hour". However, the newspaper warned that "for many borrowers, long grillings and lots of personal questions look like increasingly becoming the norm". The newspaper carries several examples of clients spending hours with potential lenders analysing every aspect of their bank statements. Other mortgage applicants report that lender questions are becoming increasingly invasive or upsetting.
In May 2012, Peter Griffiths, the outgoing chairman of the Building Societies Association, said: "The mortgage application process will change, with both lenders and consumers having to get used to far more detailed, and some may believe intrusive, questioning. The process is also likely to take substantially longer. The hoops lenders will have to get consumers to jump through are getting higher - in fact, not just high, but in some instances flaming. A consumer backlash could well follow."
Detailed analysis of personal spending is one area where you can expect to be quizzed by a mortgage lender. You are likely to have to discuss all of your regular outgoings and even what you spend on going out and on presents at birthdays and Christmas.
Keith Osborne from whathouse.co.uk says: "There is lots of anecdotal evidence that lenders are not only more interested in all aspects of your financial affairs but also that they need more paperwork. When applying for a mortgage you should be prepared to provide several months' bank statements, payslips and other proof of income as well as identification and proof of address."
Osborne also suggests that mortgage brokers are a great way of helping you through the mortgage application process. Brokers often complete many of the forms for you and can often speak to dedicated mortgage underwriters on your behalf. He adds: "Speaking to your local building society branch might result in you being seen by a young or inexperienced advisor. By going through a mortgage broker you're likely to spend less time on your mortgage application and you'll have someone who's there to help you through the increasingly lengthy process."