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

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

22.02.19 | Written by: Erin Gallacher

The client: A self-employed IT contractor who lives with her parents. Her mortgage application which she made directly to a high street lender was turned down because of her poor credit record.

The client has a history of making late, minimum payments to her credit cards. Desperate to move out, she approached us for a solution.

The property:
The client wanted to buy a 3-bedroom end of terrace house in a popular Bedfordshire town with an asking price of £260,000.

The finance:
The client’s mother had given her £20,000 to use as the deposit which meant she needed to borrow 90% LTV. We warned our client that although she could expect to borrow up to 4.5-5 times her income, a poor credit report would mean a mortgage with a higher than normal interest rate.

The solution:
First of all, we asked to take a look at her credit report so that we could work out which lender to approach. She was happy to share this information and it enabled us to contact a lender which we thought would be the best match given her circumstances.

As anticipated, the lender issued an Agreement in Principle, and so the client gave us the go ahead to submit the full application. Because she had been honest upfront, the lender was able to underwrite the case very quickly and she was delighted to receive a formal mortgage offer just one week later.

We are now liaising with all parties – our client, the lender, the estate agent and the solicitor – to ensure that the mortgage application completes as quickly as possible. Our client is now looking forward to moving into her new home. Here are the details of the deal:

Property value: £260,000

Loan amount:
£240,000

LTV:
90%

Rate:
4.89% fixed for 2 years

Term:
30 years capital and interest repayment

Mortgage payment:
£1,278 pcm

Lender arrangement fee:
£995 added to the loan amount

Consultant: Erin Gallacher, 01625 416392

 

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ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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