Mortgages

How is my mortgage application assessed?

Britannia is a responsible lender, and we are interested in your ability to take on a long-term financial commitment such as a mortgage. We assess your application very carefully - we use your application form as well as references, credit scoring and an affordability check.

Credit scoring

It's common for mortgage lenders to credit score applicants. It's a proven statistical technique and allows us to work out if there's any likelihood of the mortgage not being paid, using information that you have given us as part of your application, together with information from a credit reference agency. By giving points for each piece of information, we can put together what is known as a credit score.

Once we know your credit score, we can calculate the level of risk for each applicant. If the level of risk to us is exceeded, we will decline the application. However, just because an applicant is declined doesn’t mean they are a bad payer - it just means that based on the information available to us, we are not prepared to take the risk of granting that loan.

Credit scoring produces consistent decisions and ensures that all applicants are treated fairly. It is a completely objective way of making lending decisions, and doesn’t discriminate against race, sex or geographical area.

Part of being a responsible lender means that we must also understand whether you can afford your requested mortgage. We use an affordability index to assess the proportion of your income that can be used to support your mortgage repayments. This takes into account your mortgage and current commitments as a proportion of your annual income. If the calculated affordability index is greater than our acceptable limits, your application may be declined.

Affordability

As a responsible lender we must also understand whether you can afford your requested mortgage. The affordability index is our way of assessing what proportion of your available income can be used to support the mortgage repayment. This will take into account your mortgage and current commitments as a proportion of your annual income – a low index indicates a low level of indebtedness. We may decline your application if the calculated affordability index exceeds our acceptable limits.

What is a credit reference agency?

Credit reference agencies provide consumers, businesses and the public sector with information and analysis to help them make important decisions. This helps Britannia understand and manage your credit information.

We perform a credit search at Experian Ltd who get factual information from two sources:

• Public records such as electoral rolls
• Financial institutions

If you ask us, we will give you the contact details of Experian so you can request the information they hold about you. For your convenience you can view their website at www.experian.co.uk