BuildLoan Process Guide for Brokers with a Risk Rating of 1-3
Dedicated to the intermediary market, BuildLoan is the UK’s leading provider of construction based finance. Whether it’s for your client’s main residence as a self-build, renovation, conversion, custom build, home improvement, knockdown and rebuild, or a project of any scale to let or sell – BuildLoan provide you with a wide range of tailor-made solutions including exclusive mortgages.
How to Access BuildLoan
The process of completing a self-build or custom build mortgage is far more complex than a standard mortgage, so we have set-up two routes for Network Members to access BuildLoan, which is dependent on your compliance risk rating. We have created two process guides which explain in detail the process and any fees charged by BuildLoan from initial application to completion.
Network Members with a risk rating of 1 to 3 can access BuildLoan direct, however, Ingard’s Specialist Team need to be made aware of the case. See the step-by-step guide below.
Process Guide for Brokers with a Risk Rating of 1 to 3
- Product Research
Carry out a Fact Find with your client and source the best deal available. Send the Fact Find to Ingard’s Specialist Team and provide an overview of the case.
- Initial Enquiry Sent to BuildLoan
Ingard’s Specialist Team will contact BuildLoan to find out whether one of the lenders on their panel may be able to assist.
If BuildLoan feels they may be able to offer a better product through their panel then move to step 3.
If BuildLoan is unable to offer a better product then a member of our Specialist Team will update you, so that you can process the loan with the most suitable product you identified through your Twenty7Tec research.
- Self-Build Questionnaire
If a self-build is required, then Ingard will send you a copy of BuildLoan’s Self-Build Questionnaire for you to complete with your client. This SBQ comes with guidance notes to enable you to confidently prompt your clients, as required. This can be done over the telephone and will take around 30 minutes. Send the completed SBQ directly to Buildloan.
- Product Research
You will work with BuildLoan to identify the best product. BuildLoan will send you a copy of the lender’s application form and provide you with a checklist of all the other documents required to process the case.
- Broker to Produce KFI, Suitability Letter & Complete Application Form
You need to produce the KFI and complete the suitability letter and application form in the usual manner.
BuildLoan products can be sourced through Twenty7Tec.
- Application Received & Checked
On receipt of the completed application form, you will need to check it over thoroughly prior to sending it over to the lender for a Decision in Principle. BuildLoan’s administration fee of £95 is payable at this point before DIP requested.
- Decision in Principle Requested from Lender
You need to work with BuildLoan to secure a Decision in Principle from the lender to say that in principle they will lend a certain amount to your clients based on the information received.
- Additional Documents Required by Lender
You will work with BuildLoan to compile a final list of all items required from your client.
- Collation of Client’s Project Costings
Self-build lenders require sight of detailed project costings prior to assessing your client’s case and issuing a mortgage offer. Collating this information with sufficient detail for the lender can be challenging, stressful and cause delays. Clients can fast-track this stage with BuildLoan’s project costings service – just £100.
This service not only speeds up this part of the process, it also provides your client with the reassurance that prices they’ve been quoted are the most competitive and helps identify areas where savings could be made or a better deal found. Nobody wants to get halfway through their project and have to borrow more because they’ve been misquoted.
- Costings Evaluation
Once your client has their costings, these will be passed to our BuildLoan’s Project Support Team for a thorough review to satisfy the lender. Where your client has already utilised BuildLoan’s costings service, they can skip this step. If not, their costings will be carefully assessed to make sure costs are realistic. Each element will be verified by their team of experts for accuracy and where costs appear low, their team will investigate why – for example, your client might be a builder or have friends or family who are tradesmen offering cheap or free labour.
- Tailored Cashflow
Once your client’s costing evaluation is complete, BuildLoan will produce a tailored cash flow for them, to ensure sufficient funds are available at every stage of their project. This will form your client’s stage payment schedule and it will be the amount they have to spend at each stage allowing them to budget accordingly.
- Case Packaged/ Plot Valuation Requested
When all required documentation has been received, BuildLoan will prepare your case to be packaged to the lender. Occasionally, depending on the lender, valuation may be instructed before the case is packaged.
- Offer Received from Lender
Once the lender receives the full package and valuation, they will underwrite the mortgage and instruct valuation. Because this type of mortgage is individually underwritten the lender may come back with additional queries. Buildloan will work with you and your client to collate this information. On receipt of your client’s formal mortgage offer, the BuildLoan arrangement fee of £600 becomes due.
- Reviewing Client’s Insurances
Once your client receives their mortgage offer, it’s a good time to review their insurances. They may have already have had a quote for site insurance and a warranty because we need to advise the lender who is going to be providing these insurances pre-offer. These can now be firmed up and arrangements made to ensure they are ready to go on risk for completion. If quotes have not yet been provided, BuildLoan can help arrange these for your client whilst you review their life cover and other protection needs.
- Mortgage Completion & Initial Drawdown of Funds
Once your client’s solicitor has submitted their Certificate of Title to the lender, they will organise your client’s first drawdown of funds. BuildLoan will be on hand to liaise between all parties ensuring funds are released without delay.
Prior to this initial stage release, they will be required to pay their Additional Security Fee (£1500 – £2300 estimate). On mortgage completion, a pack containing information on how to request further stage payments and the necessary forms will be issued to your client. Subsequent stage payments will be requested by your client’s solicitor.
- Management of Stage Payments
BuildLoan will remain in touch with your client throughout their project to ensure that things are progressing smoothly and to plan. BuildLoan’s Stage Release Team will ensure your client’s subsequent funds are released without delay.
- Project Nearing Completion
Buildloan’s Team will alert you so that you know when your client is approaching the end of their project. It’s a good idea to review their ongoing protection and general insurance requirements at this stage.
- Project Complete
This could happen as much as two years from their initial enquiry. Buildloan will alert you to let you know when this is happening.