The past year has been yet another one of unprecedented changes and challenges, following on from the upheaval wrought by coronavirus. During 2022 the UK saw three prime ministers and four chancellors, some of whom brought confusion and panic to the financial markets and sent mortgage rates soaring.
All this meant that many mortgage holders and potential first time buyers who were already struggling with the cost of living crisis have faced extra hurdles that they may not have budgeted for.
However, it is not all doom and gloom, as the property market is still very active, and there are solutions out there for people whose situation doesn’t fit into the mould of traditional high street lenders. For example, anyone who has an adverse credit history can still find a suitable mortgage deal with the help of bad credit mortgage brokers.
Specialist mortgage lenders can also be of benefit to the self-employed, who are often rejected by the major banks and building societies simply because they don’t have a conventional 9-5 job.
As we have just experienced a year of financial turmoil, and the economic outlook remains downbeat, these mainstream lenders are likely to toughen up their narrow eligibility criteria even further during 2023. This means that anyone with a less than spotless record could find it more difficult to get approved for a mortgage.
Specialist mortgage lenders take a more flexible approach to anyone who does not have straightforward financial or employment circumstances, and are willing to look into the reasons for any issues on a case by case basis. Sometimes, a bad credit score can occur through no fault of the individual, such as being owed money or falling ill.
Some people might assume that there is something not quite legitimate about a specialist lender, but this is not the case at all. They will assess each applicant individually and thoroughly, just as a high street lender would, to make sure that the offer is viable and there is enough evidence that the borrower can afford to make the repayments.
It is true that specialist lenders usually offer higher interest rates than mainstream lenders, because this reflects any extra risk that they might be taking on. However, for many people, there are plenty of competitive deals available that will give them a helping hand onto the property ladder when all other avenues are closed to them.
If you have an issue on your credit file, from a missed parking ticket fine to a bankruptcy you will find it more difficult to be accepted for a mortgage by a high street lender. Without the help of an experienced mortgage broker, you are unlikely to be able to track down a specialist deal.
Therefore, anyone who doesn’t tick all the conventional boxes, or has already been rejected by mainstream lenders is advised to seek expert advice from a broker.
Your home may be repossessed if you do not keep up with your mortgage repayments.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
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Create Finance Limited is an appointed representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
Create Finance Limited. Registered Office: 35 Friar Gate Studios, Ford Street, Derby, Derbyshire, England, DE1 1EE. Registered in England Number: 09582938.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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