If you’re one of the many mortgage applicants that do not fit the ‘standard’ tag and are unsure whether you can obtain a mortgage, you’re not on your own, and you probably can.
Are you looking at the wrong lenders?
It’s easy to be attracted to advertising and the lowest rates from lenders, however, if they don’t say yes, then all you have achieved is a ‘no’ on your records. That’s why a mortgage consultant will get to know your circumstances, and won’t always offer you mortgages from a mainstream lender if they think you’ll be refused.
In fact, there are lenders who are actively looking for business from clients who don’t fit the mainstream profile, which make them more likely to say yes.
So, a mortgage consultant will look at a variety of lenders to suit your circumstances but they also go a step further to reduce the chance of refusal – they get to know the lender’s key decision makers, criteria and systems.
Access to underwriters
Something that most people are unaware of is the role of the mortgage underwriter. They work for the lenders and have the final say on whether you’ll receive your funding, basing their decision on you meeting their lending criteria. They also review the accuracy of a mortgage application and whether your home is worth the purchase price and loan amount.
So, it’s good for the mortgage consultant to know the underwriter before the application is submitted electronically. These online forms are designed to ensure that the mortgage consultant answers all the questions needed for the underwriter to make a decision on behalf of the lender. Unfortunately, they aren’t much help in telling you the type of customer they are looking for and what the wrong answers might be. That’s why mortgage consultants get to know the client they’re looking for (through experience) and potential pitfalls that are likely to trigger a ‘no’ within the application before they even try submitting it.
Mortgage consultants build relationships with the underwriters, so they can call them in advance and ask whether the application is likely to be accepted. In most cases, the mortgage consultant will have passed another client through the lender with similar circumstances, so know the level of risk the underwriter, and ultimately the lender, are willing to take.
A changing market
In addition, mortgage consultants are adapting to a change in where income is derived and the extension in working age. In fact, the Office of National Statistics, recently reported that 4.8 million people are self-employed, which is 15% of all workers.
This change in the market has meant two things, the change of some lender’s policy and the emergence of specialist lenders who are looking to capitalise on the opportunity.
Although mainstream lenders have begun to accept self-employment more readily, they still require three years’ accounts and approach with caution. They are also adapting their models for those applicants who will be working past 65. However, there are a number of more specialist lenders geared up specifically to deal with those clients that have with more complex circumstances, helping to ensure there are both options and lenders that can understand.
It’s all about affordability and credit
The self-certified mortgage (for those who were self-employed), is no more, as every mortgage has to be affordable, no matter how you earn your money or how long you’ll be working.
This means that as a mortgage applicant, you have to be able to prove that you can pay the mortgage now and in the occurrence of any unexpected interest rate rises of up to 3%. On top of this, you need to show that you’ve managed to pay your mortgage or rent successfully in the past, can manage your finances (minimal overdraft usage), don’t have too many red flags on your credit history and can evidence your income. The application also takes any future changes, such as income or future events into consideration, along with your monthly expenditure.
So, all-in-all, it’s good to have a mortgage consultant who knows how to pass the ‘test’.
Henry Knight, Managing Director, Springtide Capital added: “There are many reasons why a mortgage applicant might find it difficult to obtain a mortgage. We regularly help those who are rebuilding their credit due to death of a loved one, divorce or redundancy. On the other scale, we have very successful entrepreneurs who are self-employed and Barristers with complex incomes. We pride ourselves on helping the client to realise their ambitions by taking the time to understand their circumstances and pairing them with a lender that we feel gives them the best chance of acceptance. This comes from having both experience and excellent relationships with a variety of lenders. We also do this in addition to all of the expected compliance concerning affordability and rate comparison.”
If you’d like advice on obtaining a mortgage, simply call Springtide Capital on 020 3040 4400 to book an appointment with a mortgage consultant.