It’s true; we’re still here. Surprise, even shock and horror for some, I expect. In the main, our sector is flourishing once again.
Those who still believe we don’t offer a service, and who have probably never tried us, may as well just switch off now and maybe our paths will cross in another time-zone.
For the rest of us, the next 12 months will show an increase in lenders wanting quick and efficient distribution via specialists, an appetite for your ‘not so squeaky clean’ customer and the knowledge and experience on how to present a case correctly with the minimal of effort and time to achieve an offer and subsequent completion.
Near prime, almost prime, credit repair – whatever the politically correct terminology is – is currently enjoying a growth spurt.
This could include defaults, CCJs and even missed mortgage payments in the last couple of years. Most issues over two-years-old tend to be ignored. These are relatively easy to source with some lenders and, in the main, are subject to credit score.
However, of late, we’ve also seen the non-credit scoring manual underwriting of the building societies seeking some of the action, of which I will return to later.
Many consumers have had an issue or two over the last 24 months. You only have to cough these days with a utility provider or mobile phone company and you have a default added to your previously clean record.
Normally, one or two defaults are accepted and, if under £1,000, rates can be available at around 4.29% upwards depending on credit score and up to 85% LTV is possible and a max of 75% LTV for interest only.
First-time buyers normally should not have collected any credit issues in the last 12 months and then only minimal blemishes in months 13 to 24 and they may, possibly, achieve up to 80% on a repayment mortgage.
If the adverse incurred is higher, then you tend to find that the loan to value offered will be lower, usually a maximum of 75% if issues in last 24 months are over £1,000. If the credit history is worse than that, then you may be looking at 70% downwards depending on how bad the credit score is.
There is only one or two lenders in the market that will review debt management plans (DMP), IVAs or bankruptcies and these tend to have maximum LTVs of 50-60%.
I always find it hard to understand that lenders will look at applicants who incurred defaults or CCJs by letting their debts slip, but won’t assist those who have tried to obtain help and entered a DMP, so sometimes avoiding defaults or CCJs altogether.
The best thing to do if your client has no idea of their adverse is to get their credit report. The myth that packagers always blanket credit search customers is not true.
We did have access to full credit reports way back when from certain lenders, but those days have long gone and so have those lenders.
These days, each lender has a different credit scoring DIP system and it is not possible for us to access the full information, because we are not a lender and do not actively subscribe to posting monthly credit behaviour information, as a lender would.
Rather than just dipping with anyone, the full credit report upfront will enable us to source a home quickly and with minimal footprints.
This sector of the market is rapidly expanding and will continue to do so throughout the year.
Most lenders are using the experience of the specialist packager/distributor to act on their behalf, market their products and present cases ready to offer.
It really is time to embrace our sector in order to assist your customer and the increase in demand that is coming upon us all.
Dale Jannels is managing director of AToM
