This is a great success story I have been waiting to tell you about, there are so many parts to this story that (sadly) get me excited (as excited as you can be about a mortgage!).
The situation
The customer originally came to us for a mortgage capacity report as part of their divorce hearing.
At the time we were told there were some mortgage arrears which were not his fault. From a mortgage lenders perspective, both applicants are liable for the full mortgage, ie, if one does not make payment, the other should. So the reality is whether they were our customers fault or not, any new lender will assume they are.
We did the letter, the divorce went through and the customer came back to us for a mortgage this time.
What we did
When doing the research we were looking at rates of over 6.5% with a 20-25% deposit. However because of the situation surrounding the missed mortgage payments we made some calls to some of the small manual building societies we work with to see if there was any sort of exceptions that could be made.
We were trying to get across that our customer had moved out of the property, had transferred the money to his now ex wife under the belief that the mortgage was being paid. As he had moved out, he did not receive the paperwork to advise of the missed payments.
One of the lenders could see that the customer had done their part and like me felt like the customer was not a bad risk as they for all intents had made payment. They went to speak to the head of risk as the mortgage was outside of criteria.
They came back and said if we could:
- Evidence the money transfers to the ex for half the mortgage during those missed payments months,
- Evidence they they had enough money in their bank to make the full payment if necessary,
- And ensure there are no further missed payments
That they could consider the application on their normal products up to 90% LTV at 4.95%. This is exactly what we had hoped for and so we started the application process…
Declined!
We then received an email to say it had been declined!
We called the lender and had a discussion – covering off much of what we had already discussed. We were able to argue that they were aware of the things that were causing the problems beforehand. We had emailed the information over prior to even doing the Decision in Principle so to decline seems unfair.
They took our arguments onboard and agreed that there was nothing new. We then received an approved email the next day!
Summary
I often talk about what a broker does. Most people think we look for the cheapest product. The reality is far from it and I think this is a perfect example.
- The application did not fit criteria, but for a very good reason. We were able to get a lender on side at better rates than just taking the easy route.
- The lender declined the case. We were able to fight the customers corner and argue it to an accept.
- The customer had adverse, we were able to overcome it.
I think this one case highlights some key areas where a broker can make a big difference.
Even the most straight forward of applications (not that this was one of those) can hit problems. It is always worth having someone on side who can fight your corner.