In the eyes of many, getting a mortgage is an incredibly complex process. All lenders have their own unique lending criteria and applicants can often feel like they’re jumping through endless hoops to try and obtain a mortgage directly with the lender of their choice.
That’s where a Mortgage Broker in Manchester like us comes in. Our team of experienced Mortgage Advisors may be able to help, no matter the mortgage type. We help First Time Buyers in Manchester, those looking to Remortgage in Manchester & even the Self-Employed in Manchester.
Depending on the lender you go with, some credit scores are harder to pass than others. They each target specific parts of the market. It would seem to be the case that generally, lenders with the lowest rates have tighter lending criteria than others might have. Due to this, most customers will find they don’t match the criteria of every lender.
Margins are usually tight when lenders offer very competitive deals. It’s a top priority to ensure customers don’t fall into arrears, so that the lenders may remain in profit. Due to this, qualifying for them can prove difficult.
These lenders of the High Street with the cheapest of deals will utilise other means of maximising their earnings from borrowers. Once a lender has agreed to give you a mortgage, they’ll no doubt try and sell you other products that they offer, in order to make more commission. These products may include Bank Accounts, Unsecured Loans, Credit Cards & Insurance.
Occasionally, mortgages with the lowest rates of interest are bundled with higher setup fees. It’s usually best to ignore products like these and leave the recommendation to a trusted and experienced Mortgage Broker in Manchester. One of our Mortgage Advisors in Manchester will recommend the product that best suits your circumstances, saving your time and saving your money.
Lenders may also try and take advantage of customers when their initial deals near their endpoint. Some lenders still let borrowers move onto a Standard Variable Rate (SVR), in hopes the customer may stick around under their umbrella.
Mostly these days, lenders will offer follow-on deals, often referred to as “Product Transfers”. Whilst these may be easier to arrange with your lender, they’re not often known to be competitive and don’t compare well when looking at deals made available to new customers.
Not all customers are actually able to Remortgage elsewhere, so if your credit history has changed during your mortgage term, there’s a chance your only option will be to remain on your lenders Standard Variable Rate. This may also be the case with changes in circumstances, such as relationship status.
The current economical status can also affect the level of difficulty in obtaining a mortgage. If the economy is going through a tough time, lenders may restrict how much they’re willing to lend out. On the flip side, if things are going well, they may be willing to lend out more.
It’s one of those glass half full scenarios, where some would say qualifying for a mortgage in the modern era is considerably easier, whilst some would argue it’s become more difficult.
Back before regulations were put in place, there were “Sub-Prime” and “Self-Cert” mortgages, readily available to those looking to take out a mortgage. Around the early 2000s, new lenders were popping up everywhere, relaxing their criteria and attempting to seize the opportunity.
Overseas in North America, “Ninja Mortgages” became popular. This stood for “No Income, No Jobs Or Assets”. Thankfully, reckless lending such as “Ninja” & “Self-Cert” are no longer allowed, with only “Sub-Prime” continuing through select lenders.
After the Great Recession (Credit Crunch), lenders took a whole new view on the world of mortgages, tightening their criteria. The required deposit was often 25%, with many struggling to get onto the property ladder because of this. On top of higher deposits, interest rates also went up. This led to many deciding to stick with renting.