What are poor & bad credit mortgages?
This question is often asked by clients who are not aware of how our “High Street Lenders “ make their decision to lend or not, this decision is made on how many points the clients score when the lender runs a “ decision in principal “ If the clients do not score enough points the application would be declined, and unless there are grounds for an appeal, it would fail.
When we look at the specialist lenders it is a manual underwrite, and it would only be in some cases where the lender does their own internal scoring to decide which tier of the product would be appropriate to meet the client’s credit profile. There are with some lender’s, up to eight tiers within one product, which would reflect the level of adverse credit, when it occurred, and what it actually is ( late or missed payments, credit defaults, county court judgements, arrears of unsecured loans or mortgages ).
With all Bad or Poor credit everything is date sensitive, the more historical it is the better, typically more than two years old, and the larger deposit that you have, the more flexible the lender will be on accepting the level of Bad Credit.
Lending today is about risk, the lower risk that the lender perceives, the more attractive terms will be offered. With new lenders coming to the market at the current rate of one a month, competition brings constant changes in underwriting criteria all of which is very positive going forward.
Thank goodness some of our lenders still make common-sense decisions based on a manual underwrite. Yes, you may be asked to find a bigger deposit than some other clients, but three years after discharge, the terms and conditions you will receive are the same as any other client. How much better does it get? Michael J Alexander.
The overall cost for comparison is 5% APR. The actual rate available will depend on your circumstances. Ask for a personalised illustration.