He will have a 10 per cent deposit from the sale, but needs to arrange a mortgage quickly as his job starts in four weeks and he needs to be set up in his new home by then.
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He has two arrears behind him after a difficult year. What are his options?
Roger Morris is managing director of em-
“The key issue for Rhydwyn here is the timescale. He has a tight schedule, which reduces the flexibility in the options available to him. Not only does he need to find a lender that is able to offer a quick turnaround, but he also need to find a product that accepts two arrears due to his recent credit history.
The fact he has a 10 per cent deposit available is positive as it means he only needs to find a product that offers 90 per cent loan-to-value (LTV). I would recommend Rhydwyn look at GMAC-RFC Partners as it provides instant offers with automated valuation up to 90 per cent LTV. Partner’s online applications, electronic identification and the fact it offers binding decisions would result in a swift mortgage offer; crucial for Rhydwyn’s case.
Partner’s Level Two non-conforming product also accepts up to three arrears in the last 12 months and, with em-’s free valuations and no application fee, Rhydwyn’s initial outlaying costs are reduced.”
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Thomas Reeh is chief executive at blackandwhite.co.uk
“Depending on Rhydwyn’s overall credit history he may well be able to raise the mortgage from his existing lender. If the two arrears are his only problem and can be explained to the lender’s satisfaction, it would probably be his quickest, easiest and cheapest option as his current lender would know all about him.
However, if there are defaults and other credit issues he could source his mortgage from any number of non-conforming lenders like Money Partners, Mortgages plc and Advantage, whose rates are very competitive for some one with just two arrears.
If his arrears are more than three months old, Rhydwyn could expect to get a two or three-year fixed rate somewhere between 6.50 per cent and 7 per cent. The issue of timing depends on the lender chosen, but there are certainly non-conforming lenders which can get an offer out in less than two weeks and complete within days of that.”
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Richard Smith is a consultant for pi financial dixon sutcliffe & co
“The client is limited by time and therefore needs to utilise the experience of an independent mortgage adviser who will know the current market and be able to give advice on a suitable lender.
The application would need to be with a lender who utilises online automated valuations, which will, in many cases, give an instant decision allowing a mortgage offer to be produced quickly, possibly the same day.
The interest rate that the applicant would be offered does depend on their previous credit worthiness and therefore any arrears would indeed cause an increase in the rate of interest charged. This would, of course, be conditional on when the arrears occurred, as the more recent the arrears happened, the higher the interest rate is likely to be.”
