Affordability has consistently been an issue for customers throughout this year, as the ongoing cost-of-living crisis has increased monthly expenditure for all households at the same time as higher rates have restricted the loan sizes available to customers. However, there are options available in the specialist market to help your clients maximise their affordability, even if they have recent adverse in the last six months.
We work with one lender that has a semi-exclusive product with Brightstar which enables customers to maximise their affordability if they have recent adverse, even if the adverse has been within the last six months. The lenders underwriter will assess viability based upon the clients’ individual circumstances and merits.
There is another lender who covers people in current IVAs, with no minimum period to them to have been in the IVA, and also those in a current Debt Management Plan (DMP) that they could have entered into as recently as three months ago.
Shared ownership is growing in popularity amongst first-time buyers as a means of maximising their buying potential, particularly as higher mortgage rates have made the rental part of shared ownership significantly cheaper than mortgage finance. We are seeing increasing demand from customers for shared ownership mortgages and our lenders are responding with increasingly competitive propositions, which means we now work with lenders that are able to provide shared ownership opportunities to customers with adverse credit and those who receive benefit income.
Maximising affordability often means extending the term and more customers are considering mortgages that involve lending into retirement, subject to the correct planning and provision. Again, this is another area where the specialist lending sector has responded, and we work with a lender that accepts higher levels of adverse credit as part of its lending into retirement proposition to brokers who access it through Brightstar than it does to brokers who go direct. They also do this at the same rates available to direct brokers, but at a lower fee – so there is a big incentive to partner with Brightstar on these cases.
Gina Blagden, Head of Sales