Clients with credit issues are rejected by their bank

by | Monday 31st Jan 2022 | Mortgage Case Studies

Photo of credit cards and bills

Key features:

Clients were looking to get a new mortgage however both had a lot of adverse credit and other credit issues in their background.

They had been to their own bank direct thinking that they would be able to easily secure a new mortgage through them however they failed credit score with their bank, and they were unable to offer them a mortgage.

They then went elsewhere but again failed credit score and were told to approach a specialist lender however they were quoted a ridiculously high fee and high rate.

Due to their credit issues in the past and not being able to pass credit score, our clients were in a state of utter despair. That’s where we came in to save the day.

Our clients:

Our clients were looking to buy a property together and had put in an offer which had been accepted. Thinking it would probably be the easiest option, they went direct to their own bank to seek a new mortgage however our clients had some credit issues in the past and as a result they had defaults and missed payments on their credit files. The most recent of which being within the last three years, something that most lenders have issues with. When their bank ran a credit check on the clients it failed due to the adverse credit in the background and their bank was unable to offer them a mortgage.

They then moved on to another bank to see if they could help bunt unfortunately the same thing happened and they were advised to seek out a specialist adverse mortgage lender which they did. When they contacted the adverse mortgage lender, they were immediately quoted fees in the region of £10,000 which is astonishing and rates as high as 5.6%.

Understandably our clients did not want to go down this route so they got in touch with us to see if we could help with their predicament.

How did we help?

Our advisor Jade jumped into action as soon as the clients contacted us and after talking through their situation and needs fully with the clients, she came up with a plan of action. Due to most high street lenders not accepting defaults within the last 3 years, our clients were still unable to go to a completely mainstream bank however, using the resources available to her and her own knowledge and experience, Jade managed to find the clients a more middle ground lender away from the extortionate specialist side of mortgages.

The credit check passed, and Jade was able to secure the clients a competitive and attractive temporary product with the intention of changing the mortgage to a high street lender at the end of the 2 year fixed period when their credit file has had more time to repair.

The clients are now much happier and hopeful for the future and are working on rebuilding their credit score so that they will be in the best position possible for when we help them again in 2 years time.

What was the rate?

We have advised and applied for a capital repayment mortgage at a rate of 3.2% fixed for 2 years until 2024, and after the fixed period we will contact the clients again to make them aware and look at some options to get them on to a lower fixed rate with a high street bank. The arrangement fee is £999 which was added to the loan, and early repayment charges have been applied.

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