How important is your credit history and what’s the significance of your credit file ?? In this revealing case study, Manchester Mortgages look at a real-life case that highlights just how important these two items are when applying for a mortgage.
Our clients were brothers in their twenties living at home in Sale and looking to buy a property together in Manchester.
One of the brothers had a good credit history but the other brother had experienced a problem with his bank who had made an error on his credit file when closing down a loan he had repaid.
Even though his bank admitted their mistake both verbally and in writing their actions meant that his credit file was damaged and various lenders declined their mortgage applications.
Originally they wished to put down a 10% deposit but the problem with the credit file meant that lenders would only accept a deposit of 15% – luckily the brothers had the additional funds.
Manchester Mortgages obtained agreement from two lenders – one a High Street lender, the other an adverse lender.
By using their expertise Manchester Mortgages were able to obtain a two year fixed rate of 2.72% with the High Street lender with no arrangement fee and a valuation fee of £ 200 payable – the mortgage payment was £ 560 per month on a repayment (capital & interest) mortgage over 35 years.
The fixed rate for two years with the adverse lender would have been 5.19% with an arrangement fee of £ 1,495 and valuation fee of £ 445 payable – the mortgage payment would have been £ 795 per month.
Our clients are now the proud owners of a 3 bed house in Manchester.
Manchester Mortgages used their experience to obtain the brothers a High Street interest rate which will save them £235 per month on their mortgage payments for the next two years – that adds up to a massive saving of £ 5,640 and that’s not counting the £1,495 arrangement fee and £ 445 valuation fee that would have been payable to the adverse lender – therefore a total saving of £ 7,580
Any entry on your credit file be it good or bad stays on your record for six years – always try to maintain a good credit file – register with companies such as Noddle to obtain your free credit report www.noddle.co.uk
Whatever your circumstances be it having a good or poor credit history credit history please contact Manchester Mortgages on 0161 706 0242 to discuss your requirements