Case Study – Residential Purchase with a £30,000 Default

Case Study – Residential Purchase with a £30,000 Default

Client’s Situation

man struggling to support debtOur client has lived in rented accommodation with his partner for the last 3 years paying £750 per calendar month rent.

They saw a property for sale through a well known Nationwide Estate Agent who referred them to their in-house mortgage broker who wasted 3 months of our clients’ time trying to obtain them a mortgage.

A chance conversation with one of our existing clients led to them being referred to Manchester Mortgages.

Previously one of our clients had a mortgage and a secured second charge on a property that he owned with his now ex-wife but when they divorced and sold the family home the sale proceeds were only enough to repay the main mortgage.

This left our client with a £30,000 debt which he and his ex-wife agreed to repay between them at £304 per month. However, his ex-wife soon stopped paying her contribution and our client approached the second charge company which agreed to accept payments from him at £104 per month.

However, due to his ex-wife not paying this led to a default of in excess of £30,000 being placed against his name.

He and his new partner wished to purchase a property together and had a 15% deposit. Our client had maintained his loan payments and also all his other credit commitments were up to date.

The Problem

The large default still showed as a secured charge on his credit file and the loan company would not amend the file to show it was now an unsecured loan (it could now not be classed as a secured loan as the property it was connected to had been sold).

Therefore there were two issues which reduced the number of available lenders: the size of the default and the fact that it still showed on file as ‘secured’.

The Solution

Approved stampAfter researching the market we found a lender willing to accept the client’s default and to accept that the loan was now unsecured and to lend the full mortgage amount required which meant our clients could purchase the property.

The lender was a well known High Street lender who accepted all of the above and offered our clients a 2 year fixed rate of 2.14% (yes you read it right – 2.14% !!!) with no arrangement fee.

Although this lenders’ standard variable rate is presently 3.99%, at the end of the fixed rate of 2.14% Manchester Mortgages will be able to arrange another competitive interest rate with this lender without the need for our clients to be credit searched and checked.

Conclusion

house with 3 bedroomsThanks to our Whole of Market status and extensive knowledge of lenders’ criteria our clients are now the proud owner of a 3 bed property with mortgage payments of £675 per month.

Our clients also know when their fixed rate ends Manchester Mortgages will arrange another competitive rate with their existing lender.

To the best of our knowledge the Estate Agents in-house mortgage adviser is still trying to place this mortgage !

Summary

Who says miracles do not happen – a 2 year fixed rate mortgage at 2.14% with a £30k default with a High Street lender says they do !

Whatever your circumstances please contact us on 0161 706 0242 to discuss your requirements, or use the form on our Contact Us page and we’ll call you. You never know – you might be our next miracle !

 

Manchester Mortgages is a trading name of Mortgages 4U (North West ) Limited which is authorised and regulated by the Financial Conduct Authority (FCA register number 301076). Registered in England & Wales No. 4729252. Registered office: 7 Randale Drive, Bury, BL9 8HZ.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.