This is a really nice example of Customer Success with Bankruptcy, Repossession, CCJ & Defaults.
This bad credit mortgage was one were we also able to get a normal rate Mortgage. No easy task considering the various credit issues to overcome.
We received an enquiry from a potential customer who had had a difficult time in 2016/17. It had been a case of a relationship breakdown and a loss of job around the same time. It resulted in the customer having to declare themselves bankrupt and also losing their home not long after.
What we did
As you can imagine customer success with bankruptcy is probably one of there challenging aspects of obtaining a bad credit mortgage.
We asked the customer for a copy of their credit report. As they had informed us, there were a lot of negative markers on there including a CCJ and defaults in addition to the bankruptcy.
The major downside here was that there was more or less a full house of credit issues to overcome. This combined with lenders being generally more cautious at the minute due to Covid-19 it made the task a little more complicated.
The upside is that it was very clear it was all from a 6 month period which was 3-4 years prior to the application being made.
We spoke to one of the lenders we deal with regularly. They are a small niche lender and we class them as our secret weapon.
They only deal with a limited number of brokers and most brokers will never have ever heard of them, let alone used them. We use them due to their common sense approach when assessing applications.
It also helps that we are able to talk direct to the underwriters and explain the circumstances behind the bad credit. Another bonus of working with a niche bad credit lender is that we can also speak to the lender prior to submitting the application. Being able to talk it through with them before applying helps us prepare the application so we can be relatively confident it will be accepted.
When discussing the case with the underwriter we were able to show them that the customer had a good credit report over the last 6 years except for those 6 months. They also now had a good stable job which required a degree to get. Their income was also more than enough. They had also been able to save up a large part of their deposit, with a small gift to top it up. All big plus points.
They agreed that there were plenty of positives and they could see it was just a past blip, even if it was a big blip.
Less than 3 working days after submitting the application the underwriter came back to us and agreed the Mortgage subject to a valuation.
Due to the current issues of Covid-19 the valuation is currently on hold. But we expect this to go through very soon.
The customer was offered a Mortgage at 2.2% with a 20% deposit.
This being despite the Bankruptcy, Repossession, CCJ and Defaults.
Even in the current market with Corona Virus, it is still possible to obtain a Bad Credit Mortgage at normal rate.
The options are reduced but the rates are generally holding (not increasing). There are some further restrictions on income multiples and use of bonuses etc, but it is still worth a chat to discuss what may be available.
If you would like to discuss your options, please do get in touch.