Lender: A regional building society
Product: 2 Year fixed rate
Rate: 4.54%
Mortgage Adviser: https://themortgagebroker.co.uk/about/meet-the-team/caroline-bignell/
Client name: Louis
Mortgage Application date: 22/09/2022
The client had been referred to me from an existing client of mine as he was struggling to get a mortgage based on his personal situation. The difficulty in getting a mortgage was due to multiple risks – known as layered risk – and included the following:
- The nature of the client’s income,
- Adverse credit still showing on his credit file
- The property had boat mooring at the end of the garden – this could cause a problem with lending because of the potential risk of flooding.
Although there are lenders that will facilitate every one of the clients’ circumstances singularly, the layered risk reduces lender opportunity.
Louis’s income is from his limited company. His business is in aviation, they concentrate on repairing, exchanging, lending aircraft spares. He has many big accounts that are mainly in America. Therefore, cash flow to and from his business bank accounts has large fluctuations and is mainly paid into the account in US dollars, then converted to GB pounds. On this point I worked jointly with Louis, his accountant, and the mortgage lender to ensure that before the application, the fluctuating income in US dollars was something they were able to complete their underwrite on and to ensure the affordability was there for the purchase of his new home.
Adverse credit, although this lender is more accepting with historic adverse than some other lenders, in this instance they wanted to understand the details surrounding the adverse credit before they agreed to accepting the case. We provided the background story to the historic adverse credit to the lender so they could assess the risk and were happy with the age of the default, the size of the default and the circumstances surrounding the incident.
Boat Mooring – An additional valuation had to be carried out to ascertain the potential risk to flooding as the property was located close to the sea. This was paid for by the client and the valuation report was sent to the lender to assess and to agree that they were happy with the details provided within the report and that lending on the property would not be affected.
By understanding the risks involved from a mortgage perspective, knowing the full extent of the property and the clients’ circumstances, enabled me to successfully research the correct lender. Having the foresight and understanding of what the lender may view as a risk, enabled me to obtain the relevant information from the client, this made working with, Louis’s accountant, the lenders senior underwriters and Business Development Manager successful, all of this research was carried out before mortgage submission giving us more security that we had found the mortgage option most suitable to the client’s requirements.
I managed to successfully pace the mortgage with a lender based on the research done prior to application saving the client time and money when compared to many other brokers approach of submitting a mortgage application to a lender, in the hope that it would fit their criteria.
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