In July this year we received an enquiry from a couple where one of the applicants had been in an IVA. The IVA had been completed for around 5 years, there had also been a number or late payments in the last 12-18 months which were just due to poor management rather than an inability to pay.
A slightly added complication to this application was that one of the applicants was self employed with an income that had fluctuated quite a lot over the last 3 years. Ordinarily this would not usually be a problem, but in the current climate with Covid-19, self employed applicants, especially those with fluctuating incomes can be a problem on its own and this was where most of the work was involved rather than the IVA or the late payments.
The couple had been to another broker previously who had tried 2 lenders and both had been declined, frustratingly for the customer they had also paid the broker a fee to submit the application – despite the fact it had been declined!
What did we do?
We spoke to the customers about their circumstances and asked for some paperwork – most importantly was their credit report and a list of creditors involved in the IVA.
We then went off and did our research, typically this can take a day or 2 to do. Once we had completed the research we went through the options with the customer – as it happened there was only really 2 lenders available, one was charging over 7% and the other 2.7% so it was a pretty easy decision to make. They were happy with what we had found and so we submitted their mortgage application.
The lender made us work a lot for this Mortgage – although as mentioned above, this was more to do with the self employed income rather than the credit issues, the credit issues were explained and accepted. In the end we managed to get there and the customer had a fixed rate of around 2.7%. The rate is a little on the high side compared to the rest of the market (around 0.8% higher) but it did come with a free valuation and all things considered it is not a bad rate.
Unlike with the previous broker, the customers were able to get a Mortgage offer without incurring any fees from us or the lender, it was from a lender who manually underwrites, which can be a good thing in this case but also has its own problems…more questions and a slower process, but ultimately they offered the mortgage which is the main thing.
How we differ to other brokers
Whilst we do have access to criteria and products with some lenders that non adverse specialist mortgage brokers can get, in most cases we do not need to rely on that – which is something that can be said for this case.
The original broker would have been able to obtain the exact same product if they knew the adverse market.
Because we do adverse cases on a regular basis, we get to know which lenders are good with credit issues and which are not. We build this knowledge up over time and learn what the lenders like, do not like, where they can be flexible and where they are likely to be hard work.
We do not do anything other brokers can not do, we just know this part of the market better than most.
We try not to make any promises we can not deliver on. That reflects badly on us and wastes your time and ours. If you have credit issues, even if you have been declined elsewhere, please get in touch. We can talk through your circumstances and likely options and help you move forward or offer some guidance if we can not help at the time.