This is one of those odd success stories in that (spoiler alert) it was a success, but not as good a success story as I would have liked.
A customer got in touch earlier in the year, they were looking for a mortgage to purchase a property. The couple had 3 Defaults which were 5 years old. Combined with a large deposit I thought we would get normal rates all day long – the client did not believe me.
To put my money where my mouth was, despite the adverse I set our fee at the same as I woudl for any client with no bad credit – thats how confident I was it would go on the high street!
What we did
As normal we went off and did our research. We came back with a couple of options, some of which were high street lenders. These were put to the client and whilst she was happy, we could hear in her voice she was a little doubtful but gave us permission to proceed.
We did a DIP and it failed, we then went to Plan B and that also failed! They both failed due to not passing the credit score. We spoke to the client and accepted we would have to drop from the high street.
Normally at this point I would drop to the building societies but because of another issue we would not have that option. I think it was this issue that affected our high street options but cant say for sure.
We found a specialist lender with reasonable rates. These rates weremore or less what we told the client would be worst case scenario. The rate was under 6% so not horrendous, but also not the 4-4.5% mark we were initially aiming for.
The outcome
We ended up getting a DIP with out “Plan C” and this passed. The application went in and subject to a couple of underwriting questions we were home and dry with a mortgage offer a couple of weeks later.
The applicant only told me later on down the line they were also expecting that application end up getting declined. They had so little confidence they would be accepted, the call to ourselves was more or less made on a hope and a prayer. So although the rate was higher than I originally expected, it was well within what the client was hapy with but more importantly they never actually expected to get accepted for a mortgage in the first place!
Summary
I took away a couple of points from this application…
We may not always get it right, but I will always be honest in what I think we can achieve. I never increased our fee because it did not get accepted on the high street. I did not want the customer to think we lulled them in with a low fee and promises we could not keep.
You may think you have no chance. But by just making that call or sending an email you may be pleasantly surprised.
Its always good to have a back up plan just in case things do not quite go as expected.
I was always confident we would get this customer a mortgage, that was never in doubt. My only doubt was what the rate would be. That being said, I did genuinely believe high street woudl be achievable as the adverse was nearly 6 years old. I think this is a good example of where the details really do matter. It was probably the other “quirk” that kicked us off the high street. I know we have definitely got people with far worse adverse on the high street.