At the end of 2018 we received an enquiry through our website from a lady looking to purchase her home under the Right to Buy (RTB) scheme.
The applicant was in a Debt Management Plan (DMP) which had resulted in a couple of defaults on her credit file. The Debt Management Plan had been running for 12 months with all payments being made on time, in addition there were also Defaults registered at around the time the DMP had started so we had quite a lot to contend with but it did help that the adverse had been registered over 12 months (albeit only just).
The lady was waiting for the valuation to come through from the council at the time of the initial enquiry. Because it was at an early stage in the process when she got in touch, this gave us chance to do some research without it being rushed in order to find some options for the customer and discuss the case with the underwriters and account managers upfront. It also meant we had time to ensure we had all of the paperwork we were likely going to need before making the Mortgage application.
Right to Buy offer issued
By the time the council had issued the offer under the Right to Buy we had done the research and managed to get all of her paperwork together, which in addition to the normal bits (payslips, bank statements etc) we also had a statement from Stepchange confirming the last 12 months payments to the DMP had been made on time and answers to questions the underwriter would likely need answering – as an example, the reason for the DMP in the first place.
After the initial application had been submitted, the underwriter raised a few questions, some of which we were prepared for, others we needed to run by the applicant. We were able to answer their questions quickly and satisfy the additional requirements and in turn we were able to proceed to have the Mortgage offer issued within 2-3 weeks of the Mortgage application being submitted – which for a Mortgage application with a DMP and defaults, is not bad going.
What was the deal?
The customer has received their offer which is at the slightly high rate of just over 6%. Had affordability been a little better, we would have been able to get a rate through closer to 5.5% but on the upside, there were no arrangement fees or valuation fees from the lender (bar a £49 admin fee). The rate could have been a lot lower (potentially under 3% if the adverse had been registered earlier).
All being well, once the deal ends there will be normal lenders available so we can hopefully significantly reduce the rate payable for our customer and get her back on track with competitive Mortgage deals.
How can we help with your RTB enquiry?
Get in touch. As with all Mortgages not just RTB and DMPs, the devil really is in the detail. This Mortgage could quite easily have been half a percent lower, a massive 3% lower or even quarter of a percent higher just with this one lender with some slight tweaks to the situation.
Lets have a chat and see what we can do for you.