Should you use an online Mortgage Broker if you have bad credit and want to obtain a Mortgage?
Last week we received an enquiry from a customer who had some relatively minor credit issues but in the current climate there are not many Mortgage lenders available to them.
Online Mortgage Brokers
The previous brokers they had dealt with (I wont use the word spoken to as he had not spoken with a broker) had typically been the online brokers where everything is automated, they had managed to do 3 credit checks between them and been unable to help – the brokers also provided no additional information beyond it being declined, which is no use for helping the customer put a plan together for when they can apply for how they can improve their chances of getting a Mortgage successfully.
Our Method
We asked for a copy of their credit report which we looked through and went back with some questions to understand the adverse markers and some extra little bits that could be a problem for the underwriter.
He was a little surprised as nobody else had picked up the phone or even emailed to get an understanding of any of the adverse… Admittedly we do not always need to get the extra information at such an early stage, but in the current climate and the limited number of options available, I am fairly sure that the additional information would be needed.
Once we had the credit report, the answers to our questions and some extra basic information (income, expenditure, purchase price and deposit) we were then able to go and discuss the case with some of the lenders we had in mind to get an idea of whether it would likely be accepted or now.
After we had the answers we needed from the lenders directly, we were then able to draw up a shortlist of potential options before discussing with the customer.
Only then did we look at doing a credit check.
Different ways of working
It is not to say the online Mortgage brokers method does not work, but there is more to an application than just checking criteria, where we are looking at lenders who credit score, we also need to take account of whether or not we believe it will pass the credit check (in the example above, this is where the application appeared to fall down) and lastly we also need to try and assess whether an underwriter will accept the application, again going back to the example above there was not a lot of adverse to overcome, we have seen far worse. However there was something relatively minor that could have stopped an application in its tracks.
After 8 years doing adverse mortgages I think for more complex applications it takes a little more time at the initial stages doing the groundwork and research in order to give you the best chance of a successful application.
That is why we take a little more time at the beginning, we believe it improves our chances of success as we are going to a lender where we have tried to run all of the issues by them upfront.
The last thing we want to do is to waste your time or ours, we will always be completely honest with you in how confident we are in placing your application. It does nobody any good to be doing credit checks on you unless we are confident we can get you the mortgage at the end of it.
Get in touch
Please do get in touch, we can get an understanding of your circumstances and discuss any potential options and likely rates upfront.