Lenders have seen your scenario before. You'll be surprised how they will help!

You have a default?  A CCJ?  Missed a payment or two here and there?  Yes, the high street lenders will probably say they can’t help, but there’s plenty of others who will.

These days, competition is very strong across the mortgage market and this includes helping those who have had a credit blip or two in the past.  Some lenders may even go right up to 95% of the property value for the right customer.  And, this might be surprising, but rates start in the mid 2%s range on some products.

Don’t despair, there are lenders out there who, subject to terms and conditions, will probably look at your scenario and have seen it all before.

To make the process as smooth as possible, make sure you have all details to hand at the outset.  When was the default / CCJ, is it satisfied, why did it occur, etc?  Disclose absolutely everything upfront.

With all new mortgages, a budget planner will be required.  Make sure you know and can advise exactly how much you are spending on your lifestyle.  Especially make sure you know your monthly costs on food, household expenses, travel, pension and saving contributions and other likely costs such as hobbies, going to the gym, lottery direct debits and more.  Every lender will review your ability to afford your new mortgage both now, and over coming years, so all direct debits and most entries on your bank statements or credit report will need to be advised.  This is so the lender can make a viable stress test on future rate rises and ensure that you will still be able to afford your mortgage at that time.

Finally, despite some of these amazing products being available and lenders looking to attract new business, we are seeing general processing delays across the market.  Some lenders are not taking appointments for two to three weeks, some are up to ten working days behind on processing, and we have experienced recent telephone calls taking over an hour to receive any kind of response!  These are just on the broker side so heaven knows how customers are faring!  With some complex deals, these are not available directly, so speak to your local (and long established) independent and whole of market brokerage and let them take the stress away from you.

You have some adverse credit and the high street lenders have said no. What next?

So, you have a default? A CCJ?  Missed a payment or two here and there?  Yes, then the high street lenders will probably say they can’t help, but there’s plenty of others who will. 

These days, competition is very strong across the market and this includes helping those who have had a credit blip or two in the past.  Some lenders may even go right up to 90% of the property value for the right customer.  And, this might be surprising, but rates start in the early to mid 2%s range on some products.

Don’t despair, there are lenders out there who, subject to terms and conditions, will probably look at your scenario and have seen it all before. 

To make the process as smooth as possible, make sure you have all details to hand at the outset.  When was the default / CCJ, is it satisfied, why did it occur, etc?  Disclose absolutely everything upfront. 

With all new mortgages, a budget planner will be required.  Make sure you know and can advise exactly how much you are spending on your lifestyle.  Especially make sure you know your monthly costs on food, household expenses, travel, pension and saving contributions and other likely costs such as hobbies, going to the gym, lottery direct debits and more.  Every lender will review your ability to afford your new mortgage both now, and over coming years, so all direct debits and most entries on your bank statements or credit report will need to be advised.  This is so the lender can make a viable stress test on future rate rises and ensure that you will still be able to afford your mortgage at that time. 

Finally, despite some of these amazing products being available and lenders looking to attract new business, we are seeing general processing delays across the market.  Some lenders are not taking appointments for two to three weeks, some are up to ten working days behind on processing, and we have experienced recent telephone calls taking over an hour to receive any kind of response!  These are just on the broker side so heaven knows how customers are faring!  With some complex deals, these are not available directly, so speak to your local (and long established) independent brokerage and let them take the stress away from you.

Product innovation is welcomed

Delays delays delays!  Some lenders are a couple of weeks behind, some even a couple of months.  Yes, a sign of a buoyant market, but also a sign that although volumes are no way near where they used to be, lenders still don’t have enough staff to cope and process the current volumes of business or to catch up on back logs.  Some have even tried to stem the flow of business by raising rates, but as yet, this has not helped.  Demand is most definitely out there.  If you are in a rush to purchase a property, I would check current service levels with the lender you are looking to put your application to, before releasing any of your hard earned cash!

For those looking to remortgage to a better rate, now might be a good time to do it, even with the delays.  There are some good deals to be had and especially in the longer term fixed arena.  Terms and conditions will apply, etc.

As I mentioned some while back, we are seeing some of the smaller lenders launching innovative products.  These lenders are not high street names and are not necessarily looking for huge volumes, but they are looking to fill gaps in the market and this should be applauded.  One such lender has reviewed the options available to those in retirement and above the age of 65.  They’ve realised there’s a huge gap (unless it’s an equity release mortgage required) and have launched a variable rate mortgage product specifically designed to assist this type of consumer.  This can be on an interest only basis and up to any age.  Income must be provable, whether this is from pensions, investments, rental income, even earned income or off-spring support and must fit the lenders affordability criteria.  A max of 50% of the property value can be advanced and there are only redemption penalties in the first year.  This makes it reasonably flexible.  To find out more about the AToM Retirement Mortgage, please call us, we’d be delighted to assist.