If the credit score computer says ‘no’, you will tend to find most high street lenders doors shut.

I haven't mentioned it for a while, but it certainly is causing a lot of customers an issue.  Credit scoring!  This is an assessment on all available financial information and calculates a 'score' for the lender.  It also includes a search on your overall credit history covering, in the main, all of your financial transactions over the last six years.

Most lenders credit score applications to try and assess your ability to repay any loans.  This will take in to account many factors including the amount of credit you have, whether you are on the electoral role, your recent payment profile on any existing credit and the number of recent credit searches you have on file.  Nearly all financial institutions will register a credit search against you.  So, if you have recently updated your car insurance, home insurance, taken out a mobile contract and just got a new credit/debit card, that’s probably four searches in a short amount of time! Be wary that some 'comparison sites' may have also searched you just whilst seeking a new insurance quote.

If the lenders computer says ‘no’, you will tend to find most high street lenders doors shut to you.  But fear not, if you have a reasonable deposit and can prove all income, there are lenders who do not credit score, but will manually review and underwrite affordable applications on an individual basis. 

I always suggest that you speak to an independent mortgage broker with access to whole of market mortgages.  Banks may only advise on their product range. Estate Agents ‘in-house’ mortgage advisers may only be able to offer mortgages from a select panel of lenders. Therefore, in order to get best advice, make sure you do your homework, speak to a whole of market mortgage broker who can advise on the most appropriate mortgage in the market to meet your requirements, whether this be with a credit score or just a credit search.

Review your paperwork and save money!

Happy New Year to you!  Fingers crossed it will be a peaceful, happy, healthy and wealthy one for us all!

I’ve not made any personal resolutions, but I did take time out to review all of the paperwork that’s been cluttering the kitchen for a while!  Life insurance, car and home insurance and even my mortgage was in the spotlight!  It was a worthwhile few hours and it usually saves money…  Start the New Year off with a review of your biggest outlay – the mortgage!  Even though we’re still early in the year, a number of lenders have already cut their rates and now could be a beneficial time to have a chat and review opportunities available to you.

If you are against the idea of moving, but would like to increase the space available to you by way of an extension, or loft conversion, lenders may look to assist in the form of a second charge loan.   Many lenders realise that consumers needs large sums to complete certain types of work on their home and will secure the loan against the value of the property.  This is up to a certain loan to value, normally 85% maximum.  Term and rates depend on the loan required but can be short to medium term, or longer if required and loan sizes can go up to £200k. The second charge also allows you to keep your current mortgage and rate untouched, good in the current climate if you have a low tracker rate.  

Finally, if you are on an interest only loan, be prepared to hear from your lender shortly (if you haven’t already).  With many lenders withdrawing from interest only towards the end of 2012, those who have customers on interest only options will be looking to review how that customer will repay the loan back and may require proof.  I suspect this will be of high priority for 2013 for many lenders.  If you don’t have a repayment plan in place (usually these were endowments, ISA’s or future bonus/lump sum pay out), you will need to review how the lender will get their money back.  Selling your home is no longer a generally approved repayment option, so be aware and seek professional advice if this affects you.