We have not done any success stories in a while. Thats not because we have not had any, but with the mini budget, cost of living, end of year posts, rates going up and down etc, there have been a lot of other things to write about.
The dust has settled now however and so I though it would be a good time to write our first success story of 2023.
The history
In November a couple got in touch with us to see if we could help them obtain a mortgage. We talked through their situation and the main issue was a Debt Management plan (DMP). The DMP had been in place since 2019 and had caused a couple of Defaults to also appear on the credit report. The repayments had always been made on time for the DMP so there were no issues on that front.
The reason for the DMP was due to the applicants having a child and maternity pay not being enough to survive on. That resulted in them looking for advice on how to manage the debts. In turn they entered into a DMP to reduce the monthly repayments.
What we did
As always, we obtain a copy of the credit report. This allows us to ensure we have a full picture of the adverse. Along with the other bits we had obtained from the phone call we made some calls.
We had a couple of options for the customers. Due to the way rates were/are at the moment, we were able to give them the option of a cheap variable rate of around 4.2% or a fixed rate at around 8%. After discussion the pros and cons of both, they opted for the 4.2% product.
There is a little more work involved with this due to the lenders processes. We had to put together a business case for the underwriting team. This included things like how long they had been in their jobs, affordability etc. In essence we have to ensure that we highlight all of the plus points for these applicants. But at almost half the rate it was well worth doing.
Every application will have its own plus points, it is our job to look through your file and find them.
The outcome
The application went in just before Christmas so there were a few more bank holidays than normal. But within 17 working days of submitting the application and a little back and forth with the underwriter, we had our mortgage offer.
Summary
With applications like this where we are looking at “Specialist lenders” (higher rates) and lenders prepared to take a human approach (the lower rates) there is more work involved. However this application is a perfect example of where the extra work can pay off. On this mortgage, it would have resulted in around £400 per month difference in the repayments.
If you find yourself in a similar position or even if you just want to run your circumstances by us, please get in touch. A phone call may only take 10 minutes, but by the end of it we aim to be able to let you know if we can help and the likes costs.