After 12 years as a broker, we see of diffierent things. But one thing we see ALL the time is customers who we take on who are in a constant state of doubt and stress whilst their application is going through.
The one thing I say to them all (and yet none of the believe me) is if I say we can get you a mortgage and give you an indication of the rates, there is over 95% chance you will be getting a mortgage at that rate (I reckon it is more like 98-99%, but I do not want to be misleading so lets stick with 95%).
And this application is no different…
The situation
I couple got in touch with us wanting a mortgage. They had spoken to a couple of brokers before us (I know!) and those brokers had come back to them and told them they could get up 85% LTV at a rate of around 6.5%.
Their situation was relatively straight forward, one of the applicants had 9 Defaults and a fair few pay day loans. They were all around 5 years old, so clearly a blip that was behind them.
The problem is that although everything was quite historic there was too much for it to pass a credit score with a high street lender. We needed a lender who would do a credit check rather than a credit score.
What we did
When we originally spoke to the customers we told them 5.6% with a 10% deposit… But by the time they had had an offer accepted on a property that lender had pulled their products and so it was no longer available. I was back in line with the other brokers, 6.5% with a 15% deposit, although I was not quite finished with the research.
I told the customers where I was at in terms of research but that I had not finished yet. They were pretty clear in that they need a 10% deposit and the rate would need to be under 6% otherwise they would rather hold off until the adverse dropped off.
There were 2 lenders I was waiting on at this point, the first came back and said they could do 90% and the rate was higher than our initial conversation (5.6%) but just about sliding under the 6% mark at 5.95%. This was with a lender I had never used before as they had recently improved their criteria around adverse.
We applied for the DIP, the customers were on the phone almost daily (this is fine, a lot of our job is just reassuring people) they were doubtful we would get anywhere.
2-3 days later however we had a Decision in principle in hand.
The outcome
Once we had the DIP, we submitted the full application. The clients were still very nervous at this stage and still not expecting much. 48 hours after the application went in, the underwriter came back with a couple of questions. Nothing too taxing in all honesty and we were able to get everything back to the underwriter later that day.
The following day the underwriter was happy with everything and the valuation was instructed.
Summary
I think this case can be summed up in a few bullet points:
- If we tell you we can do something. Its because we genuinely believe it is possible. Our fee is only charged on full offer. That means we only get paid if you get your mortgage. I say this to everyone, but I have a 7 year old daughter. If I dont believe I can get you a mortgage, I will tell you. I would rather spend time with my daughter than application I think could get declined.
- If you have a wobble, call us. A reason we charge a fee is to ensure we are not mounting applications up. If you want some reassurance, to get something off your chest etc, we are on hand, call us.
- Everything might not quite go to plan, as with this case where the original rate was not available. But that is rare and we usually have a Plan B or C available. I do not think Plan C would have been viable in this case but thats ok, we did not need it.
- Lastly and most importantly, these client spoke to 2-3 brokers before us. Thats fine, it happens, but do not give up. These customers did not.