Why Isn’t it Easier to get a Mortgage in Nottingham?
Hardships of getting a mortgage | Mortgage Broker in Nottingham
When it comes to mortgages, all lenders have their own specific lending criteria and often, many people get frustrated when going direct to a Lender for their mortgage for the following reasons.
Some Lenders’ credit scores are easier than others depending on which one a person approaches – Lenders with the lowest rates often have the tightest lending criteria. Each one is targeting different parts of the market making some more ‘niche’ than others so the difficulty will also depend on the client’s situation e.g. if they are a first time buyer in Nottingham or remortgaging in Nottingham.
When lenders choose to offer competitive deals, their margins are very tight. This is so that lenders are at less risk of losing out through consequences of lending to the wrong customers who has the possibility of falling into arrears. Therefore, making it difficult to qualify with certain lenders.
Lenders and misleading products
There are High Street Lenders with the cheapest deals hold other ways of trying to maximize their earnings from borrowers. Once your mortgage has been agreed they will proceed to try and ‘cross-sell’ other products that they offer which will make them more commission. These products include Bank Accounts, unsecured loans, credit cards and Insurance.
Our Mortgage Advisors in Nottingham will make sure to recommend the product that represents the best value for money because they make sure to take into account everything that will be matched up to find your most suitable Lender. At our Mortgage Broker in Nottingham, we know that sometimes it’s best to ignore the mortgage products with the lowest rates of interest as they come with high set up fees.
Another issue which can arise with lenders is the matter of taking advantage of customers when their initial deals are coming to an end. Some lenders still let borrowers drift onto Standard Variable Rate hoping clients stick with them. A common tactic with lenders in contemporary settings is offering ‘Follow-On’ deal, also known as a ‘Product Transfer’. Whilst these are enticing, they are rarely the most competitive and aren’t anywhere as near as good as the deals made available to new customers.
Also, on the subject of Standard Variable rate mortgages, of course not all customers are actually eligible to Remortgage elsewhere; perhaps circumstances have changed e.g. a relationship breakdown; maybe there is less income coming into the household now than at the point of application; or if an applicant has had a default or CCJ since they took the mortgage out or the value their home has dropped since they bought it.
Returning the Lenders’ criteria, depending on how the economy is performing as a whole can affect how easy or hard it is to get a mortgage. When the economy suffers lenders are able to tighten their criteria and vice versa. Some would say sometimes it’s can be too hard to qualify for a mortgage, then on the flipside, too easy.
An example of times when it has been considered too easy could be the mid-2000’s when ‘Self-Cert’ mortgages were readily available to the majority of the public which is easily recognised as reckless lending.
To regain control lenders switched the tables and began tightening their criteria, more often than not, 25% deposits were required and made it almost impossible to get onto the property ladder. If by chance, a person did manage to get a mortgage rate then interest rates were high also, further deterring people from buying.