Obtaining a Mortgage, whatever the situation, can be a hassle. At our Mortgage Broker in Middlesbrough, we aim to make it so as your Mortgage journey is as stress-free as possible. With many applicants we have seen both past and present, don’t know where is best to start due to the many lenders out there who all have different criteria.
Due to this, some credit scores are easier to pass due to specific scoring that is aimed towards the market. It is an often occurrence that the lenders with the lowest rates have the tightest lending criteria which means most customers may not match the majority of lending criteria that is out there.
When lenders offer the chance to take up the competitive deals, the margins for these are very narrow. To make it so as these lenders are still gaining profit, they make sure to take customers that have the highest chances of being successful when paying back their mortgage and not fall into arrears.
And whilst the deals are cheap for the customers, there are still other ways of gaining a maximised profit from borrowers. When the mortgage has been agreed on then this will lead to other products being offered so that more commission is taken. This can include such things as Bank Accounts, unsecured loans, credit cards and Insurance.
Low rates may seem a good idea at the time but they also come with high set up fees. It can sometimes be an advantage to just ignore these products. If you choose to go forward with your mortgage application with one of our Mortgage Advisors in Middlesbrough then they will be able to recommend the product that represents the best value for money for you by taking everything into account.
Lenders further maximise their opportunities to get more out of their customers when the initial deals are coming to an end. The most common option for this is a follow on deal, also known as a ‘Product Transfer’. Whilst these are easy to take up, they offer nothing of substance and aren’t as greater value than the deals which are available to new customers.
Alternatively, when a borrowers’ deal is about to finish, most will be moved onto the lenders Standard Variable Rate if left unnoticed. When it comes to Standard Variable Rate mortgages, not all customers are eligible to Remortgage for numerous reasons such as less income coming into a household, a relationship breakdown and if the client has had a default or CCJ since they took the mortgage out.
Backtracking to the lenders’ criteria, depending on factors such as the economy can affect the difficulty of gaining your mortgage. If the economy is doing well, lenders may be more open and lenient. This is why it’s easier in some years to get a mortgage and in others, not so much.
An example of incredibly easy mortgages would be ‘sub-prime’ and ‘self-cert’ mortgages that were readily available to the majority of the general public in the mid 2000s. During this time lenders were able to set out more relaxed criteria.
After the ‘Credit Crunch’, lenders restricted such things as ‘self cert’ mortgages and tightened criteria. Often, a 25% deposit was required and for many people, it became a lot harder to step onto the property ladder. Alongside this, interest rates were also high as well which gave customers more reason to rent.
There are a lot of ways in which a customer can obtain a mortgage with the help of an experienced Mortgage Advisor in Middlesbrough. Together we will be able to look over credit scoring of certain lenders and look over more fine details such as ensuring the formatting of your address is consistent across your accounts.
If you don’t qualify for a mortgage yet you can still get the foundations ready so that when the time is right you are in a much stronger position to go ahead when you choose to start your mortgage journey.