Case Study: Private Mortgage with Adverse Credit Issues and Payday Loan History
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Client Background: We worked with a private residential buyer seeking a mortgage to purchase a residential property just outside of London. He had been rejected due to having a history of adverse credit issues.
Property Information: The home in question was a private property on London's outskirts, being purchased as a long-term private residence. Our client had a 30% deposit available and needed to mortgage the balance.
Financial Requirements: In total, the client required a mortgage to the value of £350,000 to purchase his home. The preferred term when working through monthly repayment cost illustrations was a 30-year mortgage.
The Revolution Brokers Solution:
The Revolution Brokers team consulted with our client to understand the background behind his adverse credit problems. A previous lender had rejected his application since his credit file showed multiple defaults, as well as payday loans.
On inspection, the defaults occurred over a year ago, and he had since repaid his financial obligations. The payday loans fell into the same period, with all of the missed payments in a 36-month window.
During this time, the client was dealing with some challenging family situations and severe ill health of both parents and had struggled to cope with the financial burden - hence falling into arrears and having since made good on all outstanding debts.
Following a discussion with our recommended lender, they were able to make an exception and accept the mortgage application. We will revisit this in two years to assess whether there is a more competitive refinancing option available.
Property Valuation: |
£500,000 |
Total Mortgage Borrowing: |
£350,000 |
Loan to Value Ratio: |
70% |
Negotiated Interest Rate: |
4.42% - to refinance in two years. |
Mortgage Term: |
30 years |
Monthly Payment Value: |
£1,720 |
Arrangement Costs: |
£1,495 |
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Read moreFCA disclaimer
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.
We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.