It will not have escaped your attention that lower deposit mortgages are back which is great news, although due to their higher rates and more stringent criteria only a lucky few may be able to successfully apply, at least for now.
For many potential borrowers, especially first-time buyers, these mortgages are out of reach for another reason and that is either because of outstanding credit commitments or minor adverse credit.
Income and credit-related scrutiny has, quite rightly, been
ramped up from a lending perspective in recent times and clients must share all
relevant financial commitments.
This sounds obvious but we have experienced instances where missed information has caused major delays further down the line and the need for full transparency upfront is greater than ever.
An area highlighted by one of our top advisers is that
clients often overlook student loans as being a credit commitment, as these are
automatically deducted from salaries.
However, lenders may include these in their affordability calculations.
As a specialist mortgage broker, we’re also seeing a greater proportion of clients who are not only self-employed but who have a non-traditional income history and a variety of income streams. Lenders may consider such scenarios, and each has different policies in dealing with such cases.
With regards to adverse credit, we’re seeing the next generation of adverse credit coming through and if you delay/miss a payment to a utility or communications company, you could be awarded a default almost immediately. The biggest increase at the moment we’re seeing is car parking fines. People do not want to pay a silly little charge because they went over their time allowance at a superstore, but then they also ignore the private parking charge firms chasing them down. However, these can escalate into a registered adverse item and ultimately affect their ability to achieve finance.
The more thorough and better prepared we are from the onset
with all relevant and transparent details, the less time we will spend
firefighting issues further down the line, and less stress will be placed on you,
the client, throughout the mortgage process.
