This is a true case study dated 13/04/2012 ref TMBLElliott
Amanda contacted The Mortgage Broker (St Neots) Ltd as she had sold her house and needed to pay a £2,000 deposit on a new build house that was due for completion in September 2012.
Amanda was pushed for time as her previous mortgage broker had failed to get her approved with Santander and Nationwide at 70% borrowing due to the blemishes on her partner’s credit file and the outstanding credit that they both currently had – although all the outstanding credit was due to be repaid by Amanda’s house sale.
The level of bad credit showing on Diane’s and her partner’s file included late payments and defaults that were all reasonably recent, within the last 6 – 36 months.
The adviser at The Mortgage Broker (St Neots) Ltd advised Amanda that it would be worthwhile trying with one more high street lender, that he knew was a bit more lenient on their credit scoring than Santander and Nationwide, before looking at the specialist lenders which would be more expensive in rates and fees – Amanda agreed to this approach and the mortgage broker got her ‘approved in principle’ with Halifax after applying a few ‘tweaks’ to her mortgage request.
How did we manage to get approval when others had failed?
Due to the experience of the mortgage broker and their knowledge of this particular High Street lender and their lending criteria he restructured the mortgage application in the following way:
1) The case was failing on affordability due to the high level of current outstanding commitments.
Solution: By extending the mortgage term to 35 years (Amanda initially only wanted a 30 year term) the new mortgage fitted on the lenders affordability calculation.
2) With 70% borrowing the broker knew that getting approval at this level would be tough.
Solution: By decreasing the mortgage to 65% of the purchase price he knew that the lending criteria and current scoring technique would be more lenient. Amanda was in a position to stretch to this extra 5% deposit as the new build was not set for completion for another 5 months and her house sale, which was imminent, would allow her to clear all of her current debt allowing her to make huge monthly savings which could be set aside for the extra deposit required.
Result: “Mortgage approved in principle”
Summary: Amanda and her partner were over the moon with the result and the valuation is booked for next week.
Testimonial from Amanda
“I would strongly recommend using The Mortgage Broker … we were having difficulty in finding a mortgage due to the complexity of our situation and had already been turned down by two high street lenders and my lifelong mortgage advisor had told me that we could not use a high street bank. We were very disappointed about this and decided that our only option may be a sub-lender for our mortgage however, after contacting The Mortgage Broker and speaking to Darren he immediately restored our confidence and found us a high street bank that considered us. We have had our application processed and valuation done and are now awaiting a formal offer….we are both very impressed with the knowledge and speed of the service provided especially at the weekend when most places are closed.” Amanda.