Ready to move - a mortgage deal in the blinking of an eye

Securing a mortgage or remortgage deal can be an administrative ordeal that takes weeks if not months. Not only is this a hassle but a slow turnaround can mean buyers miss out on their dream home.

Now, however, there are moves to cut the waiting time to a matter of days - if not hours - through a process known as "instant offer".

New technology lets lenders make offers by running the usual credit checks using an automated valuation model (AVM), or "desktop valuation", instead of carrying out a physical inspection of the property.

In short, an AVM collates a customer's credit history, along with property-value data from the Land Registry, and allows the lender to work out a mortgage deal immediately.

GMAC-RFC was one of the first to introduce the technology and it has now been joined by rival specialist lender Edeus.

"If a borrower qualifies for an AVM and passes the credit check, we can make an instant binding offer in less than an hour," says Alan Cleary, the managing director of Edeus.

His firm charges a premium of £140 above the cost of a standard valuation for this service. For £875, it offers the full package of AVM, loan offer and funds released - all within five days.

While the interest rates aren't the most competitive, since customers are paying for speed, mortgage brokers back this new approach. "Anything that speeds up the tortuously slow house-buying process is welcome," says Melanie Bien of broker Savills Private Finance. "Instant offers are handy in helping the buyer demonstrate to the lender how serious they are - particularly if the vendor wants to move quickly."

At the moment, the Edeus instant offers are only for remortgagers and only available on applications for loans up to 79 per cent of the property's value. That's because the lender needs a cushion in case it gets its valuation wrong and advances too much money.

Although new buyers do not yet qualify for desktop valuations, it is expected that lenders will soon devise a way that allows them to do so while hedging the risk.

"There is plenty of data on house prices and transactions available - rendering physical valuations unnecessary in most transactions," says Nick Gardner of broker Chase de Vere Mortgage Management. "The service has much more validity on the purchase market [than for remortgages] as buyers are often worried about losing their properties and being gazumped."

That said, an AVM won't always be suitable. "If you are buying a three-bed semi in Croydon where there are lots of comparable properties, you should be fine and get an accurate valuation," says Ms Bien. "But if the home is more quirky - a thatched cottage, say - the margin for error is too great because there won't be enough similar examples in the area."

Ms Bien thinks more lenders will join in, creating competition that could mean lower costs.

Fleur Cooper, from London, is turning her home into a buy-to-let and moving next door. The 29-year-old used broker Cobalt Capital to secure a swift offer through Edeus.

"I had to act quickly as there was a lot of interest in the property - but I became the most favoured buyer as I had the funds lined up and was in a position to go straight away."

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
people
Extras
indybest
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior Investment Accounting Change Manager

    £600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

    BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

    £450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

    Senior Analyst - ALM Data - Banking - Halifax

    £350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

    Java developer - Banking - London - Up to £600/day

    £500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

    Day In a Page

    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service
    Billionaire founder of Spanx launches range of jeans that offers

    Spanx launches range of jeans

    The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
    10 best over-ear headphones

    Aural pleasure: 10 best over-ear headphones

    Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
    Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

    Commonwealth Games

    David Millar ready to serve up gold for his beloved Scotland in the end
    UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

    UCI Mountain Bike World Cup

    Downhill all the way to the top for the Atherton siblings
    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain
    Ebola epidemic: Plagued by fear

    Ebola epidemic: Plagued by fear

    How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
    Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

    From 'Parks and Recreation' to 'Guardians of the Galaxy'

    He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
    How live cinema screenings can boost arts audiences

    How live cinema screenings can boost arts audiences

    Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash