As one of the UK’s most experienced Mortgage Brokers and an absolute specialist in Complex and Unusual cases, I’ve seen almost every scenario that you could possibly imagine in regards to difficult mortgage applications. When trying to place “Unusual Mortgages”, we have a sixth sense as to whether a mortgage application will be accepted by a lender.
The latest news is that Mortgage Lending has been restricted even further with some of the recent cases that we have encountered. There are several ways that Mortgage lenders can restrict lending and one of the most common is to tighten their criteria around credit scoring and credit checking.
Here’s a handy guide to Credit Scoring & Credit Checking …
Credit Scoring
This is where a Mortgage Lender uses your data and electronic credit file to score points. They will use several factors like your current residential status, employment situation, current credit card balances, payment history and mortgage track record to predict your future behaviour. (At this moment in time too many Mortgage Lenders are “Cherry Picking”!)
Credit Checking
All mortgage lenders will look at your electronic credit file to check your past behaviour with any contractual or financial commitments. They will definitely be looking at your past payment history, outstanding credit card balances and personal loans that you may have in place. (Mortgage Lenders see everything, so don’t even think about non-disclosing!)
Credit Card Balances
There has been a trend lately of Mortgage lenders declining to lend to people with “significant” unsecured debts like credit cards, personal loans and car finance. They are more likely to decline a Mortgage application if your outstanding credit card balances are over 50% of the approved limit. (So, your credit cards could be well managed and you still can be declined!)
Pay Day Loans
Mortgage lenders are highly likely to decline your application outright if you have recent activity with a pay day loan provider, even if the money was paid back on time. They view this as a sign that the person is unable to manage their current finances and are therefore unlikely to be able to manage a mortgage payment. (Mortgage Applicants should avoid Pay Day Loans at all costs!)
Adverse Credit
Many of the major lender groups will decline an application if there is any recent late payment history and especially if there are any past arrears, defaults or county court judgements. Those who have had bankruptcy or IVA’s in the past are almost certain to be declined by major high street banks at this moment in time. (Seek advice from a specialist broker, who will have more viable options than exist on the high street!)
Improve Your Chances
If you have adverse credit on your credit file within the last six years, then seek advice before applying for mortgages, as any declined applications or multiple applications, will have a further adverse effect on your chances of getting a mortgage. If you have equity, or a deposit, then it may still be possible to attract a lender, even with adverse credit. (Improve your chances by speaking to a specialist in Unusual Mortgages who know’s about adverse credit mortgages!)
Unusual Mortgages are one of the UK’s most experienced financial advisers at finding mortgages for both employed and self employed people, who are finding it difficult to acquire finance. We have specialist knowledge of Credit Scoring, Adverse Credit, Self Employed Income, Multiple Mortgages, Expatriate Mortgages, Buy To Let (with or without Income Verification), Minimum Income Requirements.
We are brokers that work closely with lenders that manually assess applications and offer a greater degree of flexibility for applicants and they may accept applicants with some past adverse credit history. We also work with a number of Mortgage lenders that have no minimum income requirements and verification on Buy To Let Mortgages. If you are finding it difficult to get a mortgage, then give us a call to discuss your requirements.
Unusual Mortgages are currently conducting “The Unusual Mortgage Consumer Survey 2016″ and would appreciate if you would take just two minutes to give us your views on the Mortgage Market for both Employed and Self Employed people. https://www.surveymonkey.co.uk/r/HGPSTZ3
If you require more information on Complex Mortgages, Buy to let, Self Employed or Executive Mortgages you can contact Unusual Mortgages on UK 0845 474 3075 or International +44 1404 45397, email at enquiries@unusualmortgages.co.uk