This is a real life example of a client of ours which had a nice ending and then got better still more recently.
In early 2017 we received an enquiry from a potential customer. This person had some adverse credit which included:
- 2 Defaults from 2011/2012,
- Some arrears on commitments from 2014/2015,
- A Debt Management Plan which had been cleared for around a year.
Prior to getting in touch with us, the customer had been to another Mortgage Broker. This broker had submitted a Decision in Principle (DIP) to Natwest which was subsequently declined.
After that, the broker then applied to a more specialist lender who accepted some adverse, but in turn they also charged interest rates of around 1% to 1.5% more than the high street. That DIP was also declined and the broker decided to appeal the decision to get the lender to accept the case.
Where we became involved
Whilst the appeal was going through, the customer got in touch with us. We had a chat with him and based on what he was saying, our initial thoughts were the same as the original broker and that Natwest was the obvious initial choice at the time but we were surprised it had been declined by Natwest.
I asked the customer to fill out a factfind for us and send over his credit reports, which he did. We still stood by our initial thoughts of Natwest after we had reviewed everything and I asked the customer if we could apply to Natwest for him. He asked us not to apply to Natwest as he did not want to jeopardise his appeal with the second lender.
We knew the second lender quite well and knew how they worked and that this DIP would not affect the appeal, I also explained to the customer that we had other (cheaper) options than the lender the initial broker had applied to and that even if Natwest did decline the DIP we would still have these options open to us as it would not impact on the other applications in any way as those lenders do not score applications, but rather check that it fits criteria.
I felt quite passionate about this application as I did not want the customer paying more on a Mortgage than necessary and felt confident we could get him on the high street. After some persuasion he allowed us to do the DIP with Natwest…
The DIP was accepted. We then submitted the full application a day or 2 later and waited a couple of days for the application to be underwritten. At this point, the initial broker came back to say the appeal had been declined and he could not help any further.
The following week the valuation was being carried out and we then received a full mortgage offer a few days later. The customer completed and everything was fine for the duration of the deal.
2 years down the line…
Last month the customer came back to us to have a look at their Mortgage options. They wanted to know if they had to stay with Natwest who were not massively competitive (but still better than an adverse lender) or if they could look for something better.
Pretty much everything had now dropped off their credit report bar the arrears from 2013-14, their LTV (the percentage of the mortgage against the property value) had also improved massively and so we managed to not only find them a high street lender, but get them the cheapest deal available for their requirements.
We are experienced in adverse Mortgages, that does not mean we go straight to adverse lenders. It means we know which high street lenders are open to various types of adverse. It also means that we use those lenders regularly for customers who may be in a similar situation to yourself and not just for straight forward cases. We know how to get the most from their systems and package the application for people with adverse issues to give it the best possible chance of being accepted.
In this example, the customer saved around £100 per month by coming to us – over £2,000 in the 2 years. Admittedly we did charge a fee where as the other broker did not, but the savings far outweighed the cost of the fee.