It can be more challenging to get a mortgage if you have had credit problems in the past. Still, Gareth and Maria’s situation got trickier in that Gareth had not long since he quit his job to pursue his hobby as a Graphic Illustrator as a new profession. In this case study, we discuss the importance of taking Mortgage Advice in Hull as soon as possible to give your application the best possible success chance.
Gareth disliked his job, but the salary was excellent, and he felt he couldn’t afford to quit. He started moonlighting on the weekend as a Graphic Illustrator, and he began to see this as a viable career in itself. He eventually dived looking at Self Employment mortgage Advice in Hull, to improve his work/life balance and finally enjoy his job.
With the additional hours he could now devote to his former “sideline,” Gareth’s business quickly showed a profit. In fact, after the very first year of trading, it was profitable enough for him to consider buying a home for himself, Maria, and their adopted child and get out of renting for good.
Sadly, finances have never been Gareth’s strong point, and his negligence on such matters when he was younger led to a couple of defaults on his credit record. His credit score had improved in recent years, but the old ruins were still showing on his credit report. Therefore, there were two issues when the customers approached our Mortgage Broker in Hull for Mortgage Advice. These appeared to consist of finding them a Lender who would take a more forgiving view on his historic poor credit while also lending to him based on the year’s trading figures.
Gareth knew he would not be an easy mortgage and took the sensible step of engaging with us early on, well before they started viewing houses. He felt that getting a mortgage might even be impossible. Looking at Gareth’s Experian report, it is evident that a specialist lender would be required. Luckily his photography business didn’t need much cash to get going, and he had been quickly able to raise a 15% deposit with just a little help from the “Bank of Mum and Dad.” giving me the reason for some optimism.
Some of the less well-known “specialist” Lenders have carved out a real niche for themselves when lending to customers who have not long been Self-Employed In Hull. There is some additional risk for them in this area when so many businesses go bust in their infancy, thus to mitigate this, they insist customers put down a fat deposit. 15% was just enough, and we obtained an Agreement in Principle for Gareth and Maria, who went on to buy a family home.
Because these specialist lenders are working in carefully selected niches, they tend to charge higher interest rates than you might see advertised with High Street Banks. That said, these higher rates are by no means extortionate, and in many cases, it’s still cheaper than renting.
Just because your first mortgage ends up being with a specialist Lender, it doesn’t mean that you are frozen out of more competitive mortgage rates forever. While it’s likely that you’ll have to sign in for at least two years, if you can prove a good payment history, then a remortgage to a more well-known Lender offering a better deal after a while should be achievable.
Specialist Lenders don’t mind you seeking another deal elsewhere, and they expect that’s what will happen in a large number of cases. They see themselves as “stepping stones” Lenders, and when you come to leave them in the future, they take the funds you have repaid and look to lend it back out to new customers.
In summary, specialist Lenders play an instrumental role in the mortgage market. They will take a different view to mainstream Banks but don’t get fooled into thinking they lend to just anyone, and you have to fit precisely within their published lending guidelines.
Date Last Edited - 24/12/2020