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Mortgage for self-employed first-time buyer with bad credit

The Problem

A self-employed first-time buyer with five loan defaults (the last one registered in December 2012), needed to borrow £156,250 at 85% LTV. After being turned away by their bank, they approached Ingard’s Mortgage and Protection Advisers to find out if we could help.

Our Mortgage Adviser felt confident that a handful of high street lenders may see past the historic adverse. However, when conducting the required initial research we found that the customer had only been working as a self-employed tradesman for less than two years and therefore only had one year’s accounts.

This greatly narrows the number of lenders who will lend funds to the customer because they have a limited amount of proof to show that their business would continue to grow. Plus, they would need to prove that they would be able to afford the mortgage if their profits were to decrease.

The Solution

Our Mortgage Adviser asked the customer to send a copy of their last 3 month’s bank statements, business accounts and credit report. This allowed us to see if the customer would be eligible for a mortgage with one of the specialist lenders who we work closely with.

After carefully reviewing the customer’s documents our Mortgage Adviser felt confident that the customer would be able to obtain a mortgage through Pepper Homeloans, an Australian lender who has only entered the UK mortgage market in recent years.

After receiving a positive response from both the customer and the lender, the Mortgage Adviser submitted a Decision in Principle to the lender which passed straight away. Our Mortgage Adviser then collected additional documents from the customer on behalf of the lender.

Pepper Homeloans carried out full underwriting prior to valuation, so there was no risk of the customer losing any money if the lender decided that they didn’t want to proceed. As soon as the valuation report was received, the lender issued a mortgage offer. Within 15 working days, the mortgage went from application to mortgage offer, proving that there are many options for customers who may not quite fit the standard high street mould.

Here to Help

If you have any questions or would like help finding the best mortgage, loan or insurance deal, then call us on 01702 533 400 or request a callback

This case study is for illustrative purposes only.