For clients who have a Bad/Poor Credit Profile it has never been as straight forward when applying for a mortgage as clients who have an A1 perfect Credit Profile who have the choice of High Street lenders subject to affordability and meeting standard criteria.
What we are seeing in the current mortgage market is the Specialist Lenders cutting their rates to be more attractive and to compete with the high street and being more flexible with the underwriting criteria. With the gap in lending terms narrowing between the High Street and the Specialist Lenders, some of the more traditional lenders are now accepting a degree of adverse credit which is deemed to be historical and would be accepted at a loan to value that does not impact on the level of risk to the lender.
This is good news for all clients who may have a degree of historical adverse credit and in the past may have only had the specialist lenders who would have accepted their credit profile. What has been very obvious for some time is that it is not unusual for the younger generation who are hoping to get on the property ladder to have had the odd occasion when they have had a credit blip, not fully appreciating the impact that this would have on their credit profile, and their ability in the future to gain access to the mortgage market place.
When lenders can see that this was not a regular occurrence and that the client has since maintained a good credit profile and can evidence the savings that they have made to raise the deposit, some of our more traditional lenders may take a view and offer terms.
The current mortgage market is very exciting, and with the new lenders coming to the market on a very regular basis, we are seeing the real benefits that competition can bring to any market.
What this also does is place the burden on the Mortgage Advisor to go the extra mile doing their research to source the most competitive terms in today’s ever changing market.