Fierce competition amongst mortgage lenders in recent years has brought about great news for the consumer – The Banks & Building Societies scrapping for business has only resulted in a greater depth of choice and value, for nearly every type of borrower, from those looking to obtain a mortgage for the first time through to those looking to remortgage their existing one.
In todays market, the traditional one size fits all type of mortgage has long disappeared – individual borrowers now have individual requirements and objectives, not to mention individual credit backgrounds too! It is true to say that regardless of your credit history or personal circumstances, there are mortgage products to suit nearly every type of borrower.
If your mortgage requirements are less than conventional, you may experience difficulties securing mortgage finance through the usual channels, by way of approaching the High Street Banks and Building Societies.
Traditional High Street lenders have long been the preserve of those borrowers with impeccable credit records – many of these lenders will be extremely anxious to deviate from their ideal customer profile. In many cases where a borrower has a blemished credit history, an initial computerised credit scoring system will result in an application refusal.
There are a now a huge selection of specialist/sub-prime mortgage lenders, many of whom that are prepared to consider most types of mortgage application – from those with the most severe of credit records, to those self employed borrowers with little or no proof of income.
In many instances, a borrower will find themselves being redirected to the world of specialist lending after having been turned away by a High Street Bank or Building society for whatever reason. These types of specialist lenders, once regarded as a niche market, have become widely recognised throughout the mortgage industry and provide an increasing important role.
Many specialist/sub-prime mortgage lenders may only be accessed through an intermediary such as a mortgage broker, Independent Financial advisor or mortgage network – Customers must first go via these channels in order to access many of these lenders mortgage products.
Self Employed Mortgages
Self employed borrowers have always been treated differently from their employed counterparts. They have always been penalised for their status in the past, usually in the form of higher interest rates, or an interest rate loading. Self employed borrowers are still today perceived by many Banks & Building Societies as a higher lending risk unless you are able to provide backup of your income in form of two or three years of accounts and six months of bank statements.
There are many specialist lenders who recognise the sheer volume of self employed individuals in the workforce, well over four million and thus make a greater effort in accommodating the borrowing needs of such individuals. They may not offer the lowest rates on the market however their mortgages are still competitively priced and can offer greater degrees of flexibility too.
Buy To Let Mortgages
Buy to let remortgage products have long been the preserve of the specialist lender. The buy to let market has attracted a huge number of landlords in recent years as escalating house prices and a greater need for low risk investment has made property a very viable option in which to invest in.
Many of the mainstream lenders have since jumped on the buy to let bandwagon however it is worth considering that specialist lenders often have more experience of the buy to let market.
Approaching a mortgage broker can often be a great place to start in researching your specialist lending needs. As previously mentioned many of the leading specialist lenders are only available through an intermediary however most mortgage brokers will have access to a wide variety of these different lenders.
A mortgage broker may charge you a fee for there services however this can at times be negotiated in light of the fact that most will also receive a commission from the lender on completion of your mortgage application.
You will also notice when doing your research that most of the specialist lenders are in fact lending arms of the major mainstream Banks & Building Societies.