This success story is a customer who we had helped previously and they had come back for us to help get them another mortgage. This is one of those nice stories (spoiler alert) where we get to see people through their journey from the adverse to the nice lenders.
History
The customer was a young lad had previous had some adverse in the form of defaults. These were from a period where they spent some time in hospital and were not in a position to keep on top of their bills. They had tried to arrange a mortgage themselves and through another broker but had struggled.
We took a look and it seemed fairly straight forward. Pretty much what we do on a daily basis. We got them a mortgage and all was good it completed 2 years ago. The rate was a little above the high street but nothing too horrendous (it was at a rate we would seem normal in todays market).
The situation now
The adverse is around 5 years old. We did a 2 year fixed rate knowing the adverse would be around 5-6 years old by the time it came around for a remortgage.
They also intended to do some work to the property in order to increase its value between now and the original mortgage. That in turn would bring the LTV down which I was confident would help any future applications.
I felt confident with 2 years worth of mortgage payment history behind them, a lower LTV and the adverse becoming more historic we could get them a mortgage on the high street after the initial 2 year period. Which brings us to this application.
What we did
They came back asking us to help them remortgage. We updated the information we held for the customer, obtained new documents (bank statements, payslips, credit report) and we did some research.
After doing the research we applied for a DIP (Decision in principle) – it failed! We looked around again and did a second DIP – this also failed! At this point I was beginning to think I might have to look at higher rates. A sign of the times that we are in a harsher market than 2 years ago and this was maybe coming back to bite us.
However, I dropped down the table a little and tried a third lender and this time the DIP referred! A refer means the system was unable to make a decision and needed to be put in front of an underwriter. I added some noted to the application for the underwriter and within a couple of hours it was being reviewed. We then received the email to say the DIP had been accepted. Although we dropped down the list a little, the good news is that it was around the 6th cheapest deal available on the market. So although we had to drop a couple of places it was still a good deal.
The outcome
I think you already know this due to the spoiler at the beginning. But we received the mortgage offer after around 48 hours of applying for the mortgage.
There are a couple of positives in this:
- We have them with a normal high street lender. This means providing they pay their mortgage on time, they should always be able to obtain a reasonable rate mortgage. It may not be market leading, but it will always be better than an adverse lener.
- We got to see the client go from adverse to high street.
- Despite the problems with the initial DIPs, we still managed to get them on the high street. We never gave up!