Defaults Success story

This Success story is about some existing clients. A little history if the case is probably a good place to start with this one. We first helped them in 2021 when they had picked up some defaults in the year or 2 prior to submitting their application.

The history of the case down to medical problems and loss of job. We managed to get them a Mortgage with a building society. Its quite interesting as the lady had done a lot of research herself. She had found a lender who would likely accept them at around 6%.

I initially thought the same due to the amount of adverse and the recency of it. However, with a little bit of research we managed to place the mortgage at a rate of under 3%. They were obviously over the moon at that… Although that took a lot of fighting with the underwriter to get it over the line.

The situation now

Since then one of the applicants had lost another job and so it was down to one applicant to carry their finances. That would be tough for most couples, as it was this couple. However there were no new defaults just a couple of late/missed payments which had all been caught up. None of the defaults or arrears were registered in the last 12 months. Their credit report was all clear for 12 months which shows the problems were behind them.

As the original defaults were still on their credit file and now combined with some new arrears it put us in a difficult positon. They could switch products with their current lender at around 6% which is a big jump from where they are now. The alternative was to take a look to see what was out there on the market.

What we did

Being completely honest, I expected their best option would be to switch products with their current lender. Rates were higher with the adverse lenders and I could not see them passing on the high street.

As ever we did our research and after some calls we found them another little building society who were happy to ignore the older defaults as they were now over 3 years old. The more recent adverse they were happy to accept it was just circumstances and nothing too bad all things considered. This was with a lender we had never used for adverse before. We were a little unsure of how they would deal with it… A lot of lenders say they can do this or that, but when it comes to it the outcome can be very different.

We completed a DIP form which was reviewed manually and along with the explanation they were happy for us to proceed to the full application. This is great as it means a person has reviewed the adverse and the explanation for it. That means we should be in a strong position when the application goes in.

The outcome

The application went in, it went through the normal checks which took around a fortnight. We ended up with a product at around 4.8%. At the time of applying was about 0.5% above the high street. However, it was also 1.2% less than they would have got with their current lender and around 1.5% lower than the specialist lenders had we only had them available.

All in all we saved the clients a small fortune on this mortgage and an even bigger one last time. Also, despite us expecting them to pay 6% plus on both mortgages, they have never even hit 5%!

I think goes to show putting in a little bit of effort at the beginning and taking the time with the research can pay dividends.