Many customers see the process of obtaining a mortgage as a stressful and difficult one. All lenders have their own specific lending criteria and applicants can often feel like they’re stuck in an endless cycle trying to obtain a mortgage directly with the lender of their choice.
When you reach this point, it’s important not to get yourself down and instead seek the help of a professional in the field, like a Mortgage Broker in Manchester. No matter the situation you are currently faced with, our trusted team of experienced Mortgage Advisors may be able to help. We help First-Time Buyers in Manchester, those looking to Remortgage in Manchester & even the Self-Employed in Manchester.
Depending on the lender you end up taking out a mortgage with, some credit scores are a little trickier to pass than others. This is because whilst a lot of lenders will cover general grounds, though some will be targeting specific niche markets.
It would seem to be the case that generally, lenders with the lowest rates will have stricter lending criteria than lenders that may have higher interest-rates. Due to this, most customers will find they don’t match the criteria of every lender that they come across.
When lenders offer very competitive deals, the criteria margins tend to be a lot tighter. This is to ensure customers don’t fall into any kind of debt, which should be a top priority so that the lenders may remain in profit. Due to this, qualifying for them can unfortunately present itself as quite the challenge.
These lenders of the High Street who are offering the cheapest of deals will try to use other means of maximising their earnings from borrowers. Once a lender has agreed to give you a mortgage, it is not uncommon for them to try and sell you other products that they offer, in a bid to try and make them more commission than they’re already getting from the mortgage. The products they may try to sell you include Bank Accounts, Unsecured Loans, Credit Cards & Insurance.
Every so often, mortgages with the lowest rates of interest are bundled with higher setup fees. The recommended best practice usually is to ignore products like these and leave the product recommendation in the hands of an open & honest professional with experience in mortgage advice. This is somewhere we can help.
Our trusted and dedicated Mortgage Advisors in Manchester will be able to recommend the product that best suits your individual circumstances, saving both your time and your money.
Lenders may also try and take advantage of customers when their original mortgage deals are starting to reach the end of their term. Some lenders still let borrowers move onto a Standard Variable Rate (SVR), in hopes the customer may stick around and continue to take out mortgages and other services under themselves.
Mostly these days, lenders will offer follow-on deals, often called “Product Transfers”. Whilst it may be an easier option in arranging one of these with your lender, in some cases these deals may not compare well when looking at deals made available to new customers. As such, it’s always worth exploring your options elsewhere before deciding on something.
In truth though, not all customers are actually able to take out a Remortgage somewhere else. If for some reason your credit history has changed during your mortgage term, there’s a chance your only option will be to keep on using your lenders Standard Variable Rate. This may also be the case with changes in personal circumstances, such as relationship status.
The status of the economy at the time can also affect the level of difficulty in obtaining a mortgage. If things are looking pretty rough for the economy, lenders may restrict how much they’re willing to lend out to their customers. On the flip side, if things are going well, they may be willing to lend out a little more than they otherwise would’ve.
It’s a scenario where there are both positives and negatives to the same situation. Some would say qualifying for a mortgage in the modern era is considerably easier, whilst some would argue it’s become more difficult than it ever was in the past.
Back before regulations were put in place, we would regularly see “Subprime” 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 to make money wherever they could.
Overseas in North America, something known as “Ninja Mortgages” became popular, which stood for “No Income, No Jobs Or Assets”. Thankfully, mortgage types such as “Ninja” & “Self-Cert”, of which were incredibly reckless, are no longer allowed, with only “Subprime” continuing through specific lenders.
After the unfortunate case of Credit Crunch, lenders took a whole new view on the world of mortgages, tightening their mortgage lending criteria. The required deposit was often 25%, with many struggling to get onto the property ladder at all because of this. On top of higher deposits, interest rates also went up, leading to many deciding they would much rather stick with renting.