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Politically exposed persons mortgage

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 21, 2023

Politically exposed persons mortgage

Politically exposed people hold a prominent position or function in the public eye, such as an MP or a high-ranking military officer or a Head of State.

What does this mean for politically exposed persons mortgage applications? Will it impact your chances of approval, and how can you avoid exposure?

We explain why you need a mortgage broker, how mortgage lenders can assess you differently if you are a politically exposed person, and more in our mortgage guide.

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What does it mean to be politically exposed if you buy a house?

If you are a politically exposed person, it might be more difficult or time-consuming to purchase a house. Clydesdale Bank, Accord Mortgages and other mortgage lenders may reject applications from people who are politically exposed.

There are many mortgage providers available to you if your political situation is not a concern. However, additional checks will be required. Although your political information will not be included in your credit report or credit score, lenders may check another register to understand the risks.

Speak with a mortgage advisor today.

Mortgage lenders perform additional checks

Since the Financial Conduct Authority (FCA), it is a requirement that mortgage lenders look closely at applicants who are politically exposed, they must do so.

People who are politically exposed are more likely to fall prey to a financial crime such as…

  • Bribery
  • Money laundering
  • General abuse of public office to gain personal gain

A mortgage application for someone who is politically exposed can take longer to process than for someone without such status. A mortgage broker is necessary for those who fall under this category. They can help you with your documents and introduce you to the right lender.

 

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What mortgage is for a politically exposed individual? How are they different?

A mortgage for a politically exposed person is a mortgage loan that is available to someone who has a politically exposed status. These are similar to residential mortgages but can take longer because lenders may insist on additional background checks.

The mortgage lender may request additional scrutiny from their underwriting department to assess the risk that your political status might pose. Although these additional checks may focus on your addresses and Electoral Roll information as well as occupation, date of birth, and other factors, it is unlikely that they will result in a higher interest rate.

However, your chances of being rejected for a mortgage to a politically exposed individual are higher than for someone with no such status. This is because there are fewer lenders to choose from.

When you apply for a mortgage with politically exposed status, the general checks and eligibility assessments you’ll need to go through so the lender can establish your creditworthiness are the same as they would be for a non-politically exposed applicant.

The guide to mortgage application explains the process.

How to get the best deal on a mortgage if you are politically exposed

These steps help you get your mortgage application started on the right track to save time and get the best interest rates possible.

  • You should have all the documents you need: Because these mortgages take longer to process, it is a good idea that you have all the documentation you will need before you apply. The mortgage application guide contains a complete list of all the documents that you will need.
  • Download your credit report. You can challenge any errors and have outdated information removed. Optimising your credit report can increase your chances of getting favourable rates.
  • Finding the right mortgage broker is important. This will save you both time and money over the long term. By matching you with the right lender, a mortgage broker that specialises in the application of politically vulnerable people to mortgages could speed up your approval and help you secure a better interest rate.

The rest of the application will be handled by your mortgage broker. You may be able to apply for an agreement, in principle, as the next step. However, some mortgage lenders skip this stage and go straight to full application.

 

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Match with a mortgage broker today

If you are applying for a mortgage in a politically sensitive area, it is important to find the right broker. An expert who can understand your needs will increase your chances of success. They can offer you personalised advice, guide and negotiate the best rate.

It is our goal to ensure that everyone receives the best mortgage advice from an expert who is tailored for them. Our broker-matching service is free and will quickly assess your situation and match you with the right advisor. This is someone who arranges mortgages regularly for politically vulnerable people.

We can match you with a specialist mortgage for politically exposed individuals today by calling or filling out a quick enquiry form.

What is a politically exposed person (PEP), and why does it show up on my report?

PEP is an acronym that stands for Politically Exposed Person. This refers to someone who holds a high-ranking public position or function. Their public positions can make them vulnerable to financial crimes such as money laundering and bribery.

The information on Politically Exposed Persons is completely separate from Credit Reports at Credit Reference Agencies. However, lenders will often use a separate PEP database during credit applications to fully understand the potential risk associated with their customers, as required by Financial Conduct Authority (FCA).

The Multi-Agency Credit Report includes your Credit Report information from Credit Reference Agencies. It also contains any additional data that could be used to verify your application. This includes PEP records, Financial Sanctions and the Death Register. This allows you to see what additional information and your credit report might be required when you apply for credit.

It is important to remember that just because your name has been linked to a Politically Exposed person registry does not mean that you have been politically exposed. It means someone who shares your name has been matched to your name. This could mean that you may be subject to additional identity checks whenever you apply for credit.

You do not have to worry if you don’t share a name with a PEP. A PEP sharing a name does not affect your Credit Score nor reduce your chances of getting credit.

Your application will be accepted as normal once the lender has verified that you aren’t politically exposed.

Lending institutions are legally required to check for possible corruption if you are a legitimate PEP. This includes money laundering and bribery. The FCA oversees this increased due diligence. Although organisations are allowed to do business with PEPs, they are expected to manage the risk properly.

 

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What is a PEP?

A person with a high profile, important or public profile, or someone closely related to them, such as colleagues or family members, or someone they have a close business relationship with can be referred to as a PEP.

PEPs can be identified by:

  • MPs
  • Heads of State
  • Ministers/assistant ministers
  • Ambassadors or Charges d’affaires
  • Military officers of high rank
  • High-ranking members of state-owned businesses entities
  • High-level judicial bodies
  • Members of the Central Bank Board
  • Members of the courts of auditors

What effect can a PEP have on my credit applications?

You won’t notice any differences in credit applications if you are not a PEP, but your name has been matched with a Politically Exposed Person list. The lender might perform an additional identity check to rule out that you are politically exposed. This may include checking your addresses, Electoral Roll information and occupation.

If your name matches the Politically Exposed Persons Register, you won’t have to pay more for credit, and your creditworthiness won’t be affected. The application process may take slightly longer, if at all.

When applying for credit, you may have to go through more thorough checks if you are truly a Politically Exposed Person.

A financial institution deals with someone with this status, they need to be extra cautious as the person is often more at risk. Due diligence is required because of the increased risk of fraud, corruption, and bribery. Additional checks can be done to ensure that anti-money laundering, counter-terrorist checks, or identification checks are all completed.

 

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Can I get my PEP removed?

You cannot remove a PEP match from your name. Because a PEP match is not directly attributable to you as a person, it is a correct reflection of your name (not yourself as an individual) on the PEP list.

The PEP lists are shared between foreign and domestic governments all over the globe and highlight and record individuals that they deem politically vulnerable. It is impossible to challenge the decision of a foreign country that another person (who happens to be your name) is politically exposed.

You may also find multiple PEP entries if your name is not very common. This does not mean that you are multiple people. It just means that your name has been matched with multiple people who are considered PEPs.

Reiterating, if your name has been matched with a PEP list and you aren’t politically exposed, your Credit Score, the ability to obtain credit, and cost of credit won’t be negatively impacted. So there’s no reason to be concerned.

How to find out if your name matches a PEP

Check your Multi Agency Credit Report to check if you are on a PEP Register. Our Multi Agency Credit Report, the most comprehensive Credit Report available in the UK, offers all your data from all four Credit Reference Agencies. It’s also the easiest to use.

 

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Politically exposed person mortgages FAQs

If I share my name with someone who is politically exposed, will it impact my mortgage application?

Your chances of getting a mortgage won’t be affected if you share your name with someone who is politically exposed. It will also not affect your credit score. Your application may take longer because the mortgage lender might need to perform additional checks to verify your identity.

Can I have my political exposed status removed

No. Even if you don’t have a politically exposed status, but as family members, you share a name and address with someone who does, lenders or other organisations will still need checks to ensure you aren’t that person.

This is not something to worry about. You won’t lose your chance of getting a mortgage if you share your name with someone who is politically exposed.

If I am politically exposed, can I still get a mortgage to buy to let?

Yes. There are more lenders for buy-to-let mortgages than for residential. The application process is the same as for residential mortgages. However, the underwriter and lender will likely conduct additional checks to verify your identity.

For more information on criteria and how to apply, see our guide for buy-to-let mortgages or contact us now.

 

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