This post we will look at whether you need a specialist bad credit mortgage broker and why it might be beneficial to use one.
Do you need a specialist bad credit mortgage broker?
The first question is whether or not you need a specialist. A lot comes down to the level of adverse you have and how old the adverse is.
A one off late payment or a 5 year old £100 satisfied default does not need a specialist broker, I would expect any broker to be able to overcome that at normal rates.
There are no set rules when it comes to adverse and what can be placed, but I think if you have no more than 2 bits of adverse (ie 2 Defaults) over 4 years old, any experienced broker should be able to help you. If you have a large amount of adverse or it is within the last 4 years, then it could be worth looking at a specialist.
That is not to say a none specialist can not help, but we have some examples we are very proud of where customers have been told they can not be helped or the brokers have come back with options that are far more expensive than necessary.
How does a specialist differ from a generalist?
For me the biggest difference is not necessarily how we differ but our experience. Most high street lenders will only ask for 3 months bank statements and 3 months payslips as a maximum – some do not even always ask for those. The payslips are used to check your income and the payslips are used to confirm the wages and possibly to confirm that there are no declared commitments.
A specialist lender or a little building society go a lot deeper. Some specialist lenders will go through your bank statements line by line and add EVERYTHING into their affordability – it might go under food, socialising, travel etc. High street lenders do not do this.
Leading on from this, we also know to go through the bank statements and get a list of any transactions which are not self explanatory and put it in a list for the underwriter. Not a deal breaker, but it may save some time.
They may ask for an explanation for the adverse, again high street lenders do not do this. This does not sound too complex? We have seen examples where a broker has asked the client to provide a detailed explanation, we read 2 A4 pages of explanation when all we would have put on the application was “redundancy”… Not the end of the world, but we could have saved the customer an hour or 2.
I suppose in short, the way we differ is that we use these lenders on a regular basis. We can pre-empt a lot of what they are likely to come back and ask meaning that we can get your application to offer sooner than someone who does not use these lenders on a regular basis.
How do you know who to trust?
This is the tricky part. You will quite often see a broker saying they can help. That may well be true, but we would like to think we know this part of the market better than most and we have ideas on how to get cases through with lenders who are necessarily the go to lenders for bad credit – which can result in saving a small fortune.
You may read reviews online, we are very proud of the reviews we have and you can see them on Google, Trustpilot and Facebook.
However, I think the thing that will help you to separate a good specialist broker from a generalist is to have a chat with them. We always try to talk to people upfront, this allows us to get the information we need (ie types of adverse, how old the adverse is, size of deposit), these things will allow us to give you a very good idea of the likely rates and fees. Within 5-10 minutes, I would like to think you would have all the information you need from an initial call and we would have given you the confidence you need to decide if we are the right brokers for you.
What to do?
Please get in touch, we will be happy to have a chat with you. 5-10 minutes and you can see if you trust us enough to look after your application and help you with your mortgage.