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. 

It’s a safeguard for the lender, making sure everything’s in order before they commit to lending you a significant amount of money. 

So, keep your finances stable and your credit clean until your mortgage is fully approved.

Image showing the concept of final mortgage credit check.

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.

Image showing the mortgage process and an indication where lenders perform final checks.

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.

How to Boost Your Chances Before the Final Check

While some factors may be out of your control, there are proactive steps you can take to increase your chances of a successful final credit check:

Keep Credit in Good Shape 

Make all debt payments on time, avoid opening new credit accounts unnecessarily, and keep your credit utilisation low. 

Good credit habits leading up to the final check demonstrate responsible financial management.

Maintain a ‘Business as Usual’ Approach 

Where possible, it’s best to avoid major life or financial changes in the period leading up to completion.  Stick to your usual income, job, living arrangements and spending patterns to present a stable front.

Provide Evidence of Stability 

If there have been any unavoidable changes, be upfront with your lender and provide supporting evidence. 

Documented proof of a reasonable explanation, like a job change with equal or higher income, can reassure the lender.

Work With a Broker 

An experienced mortgage broker can offer invaluable guidance throughout the process. They’ll ensure you’re well-prepared for the final credit check and can step in to smooth over any potential issues that arise.

Consult a mortgage broker after mortgage decline

What If You Fail the Final Credit Check?

Despite your best efforts, sometimes things don’t go according to plan. If your mortgage is declined following the final credit check, don’t panic – there are still options:

Request an Explanation 

First things first – speak to the lender and request a detailed explanation for why your application was rejected. This will allow you to identify and address the specific issues.

Review Your Credit Report 

Obtain an up-to-date copy of your credit report and thoroughly review it for any errors or questionable items that could be negatively impacting your score.

Appeal the Decision 

If you believe the lender’s decision was unjustified, you can appeal it and plead your case – ideally with the help of a mortgage broker who specialises in these types of situations.

Consider Alternative 

Lenders Your current lender may have declined you, but that doesn’t mean other lenders will follow suit. 

An experienced broker can shop your application around to find alternative, more favourable mortgage options.

Don’t Rush Into a New Application 

Finally, avoid rushing into a brand-new mortgage application immediately after being declined. This could further damage your credit score.

Instead, take some time to get your finances in order first.

Wait until you've fixed the issues

The Bottom Line

To summarise the key points on final mortgage credit checks:

  • Lenders perform these checks as a final verification before releasing mortgage funds
  • They assess credit, income, expenditure and any major life changes
  • Maintaining financial stability is crucial to boost your approval chances
  • Work with a broker – they can guide you smoothly through this process
  • If declined, don’t panic – you still have options like appeals and alternative lenders

By understanding what final credit checks entail and how to properly prepare, you’ll be in the best position to get mortgage approval and seamlessly complete your new home purchase.

Using a good mortgage broker can also be a smart move. Brokers have insider knowledge and access to a wide range of lenders. They can help you find the best deals and even guide you through the final credit check process. 

Their expertise can make the journey smoother and less stressful. Plus, they often know the tricks to improve your application and avoid common pitfalls. 

So, if you want to enhance your chances and reduce headaches, consider getting a broker on your side.

Looking for a broker? Get in touch. We’ll connect you with a qualified mortgage broker for a free, no-obligation consultation.