‘Secret’ high street rates for past credit issues.

Jul 9, 2021

Josh found us through Facebook and had been quoted rates over 5% for his first mortgage due to past credit issues. We halved the rate and here’s how.

In my spare time, I answer people’s questions on Facebook about mortgages. It’s a pretty sad busman’s holiday of a hobby, but every now and again it produces a real win. Josh messaged me directly after I’d responded to his question on a Facebook group. Not only did it turn out that he lived less than a mile from me, but we have friends in common! The stakes were pretty high to get a result for him.

The Challenge

 

Josh, like me, runs his own business. We both work in industries which have luckily boomed during COVID. As a result he was finally in a position to secure the family home he’d always planned for. The only issue was that two obstacles stood in his way, his credit history and the estate agent…

The estate agent in question was one of the big national estate agencies with their own mortgage service. They were demanding he used their broker, despite this ‘request’ contravening the estate agents’ code of conduct.

Out of principle, Josh was against this. To make matters worse they had taken a month to try and find him a mortgage. When they did, it was with a specialist adverse lender VIDA homeloans, with a rate an interest rate over 5%…

 

 

The Solution

 

After exchanging messages Josh and I had time to talk about where he was up to with the estate agents broker. What challenges he was facing and how they were currently trying to solve them. Josh had a default which was just over 3 years old and his income for the most recent year was much higher than previous. The other broker was lining up lenders that use the most recent year’s income, in order to get the mortgage amount Josh needed. This meant the choice of lenders was slim.  Combining that AND Josh’s defaults left him with few lenders, who only offered the eye watering rates I mentioned above.

 

Looking at the Bigger Picture

As I often do, we spent 10 minutes or so discussing his goals. Why was Josh looking to buy now, what was he looking to get out of the house he was going for? Josh told me that he and his partner Olivia had been living with family in order to save for the deposit. They were desperate to capitalise on a property during the stamp duty deadline. They had saved so hard for a sizeable deposit. The first thing that struck me, was this was not a solo project. Josh’s partner Olivia was currently on maternity leave and was also desperate to get into their own home.

It turned out that Josh assumed Olivia’s income could not be used for the mortgage because she was on maternity leave. He had only requested the mortgage to be just in his name with the estate agent broker.

Eureka!

It is not only possible but really quite easy to use income for someone on maternity leave. After discussion, Josh advised he would actually prefer a joint mortgage, but didn’t realise this was possible. Using Liv’s maternity income changed the game. Even with an average of Josh’s last 2 years self employed income, lenders could offer them enough money. This opened up over triple the number of lenders and, lo and behold some high street ones that could potentially accept Josh’s past defaults.

I hung up the phone for 5 minutes, ran some numbers and within half an hour we had found a mortgage for Josh at a rate of 2.7% – less than half he’d quoted elsewhere

 

The Moral of the Story

Never be pressured into using a service. See more about your consumer rights in choosing a mortgage broker in our News and Views article.

A good mortgage broker is more than a personal shopper, who just seeks out what you have asked them for. They will challenge your preconceptions, but only to come up with better alternatives. Assuming this is done politely and with good intent when you first speak with a broker, this is perhaps the best indicator that they know their onions. We are very happy to say, it has saved Josh and Olivia over £5,000 in interest alone over the next 3 years. We wish you many years of happiness in your new home!

 

Sound Familiar? Get in touch!

If your past credit is making a mortgage difficult, just click the  ‘Book a consultation’ button below and see what we can do differently.

 

The Client’s Verdict

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

Financial protection: The key options that could protect your lifestyle and family

Financial protection could provide you with a cash boost when you need it most, and there’s more than one type to consider. Last month, you read why financial protection provides a crucial safety net should you face an unexpected shock. Now, read on to find out more...

Landlords, could your loved one face a tax bill if they inherit your portfolio?

Building a property portfolio could provide you with an income stream and greater long-term financial security. It can also make your finances more complex, including when you’re deciding how to pass on assets to your loved ones. With house prices rising, many...

Why tariffs and a trade war could mean your mortgage interest rate rises

As inflation stabilised following a period of prices rising more rapidly than usual, there were expectations that the Bank of England’s (BoE) base interest rate would be cut throughout 2025. However, a potential trade war could mean the opposite happens and lead to...

Bank of Family is now funding more than 10% of buyer deposits

Parents and other family members are increasingly funding deposits as house prices soar and younger generations struggle to save the money they need. According to a March 2025 article published by MoneyAge, 10% of buyer deposits are now funded by loved ones following...

Financial protection: How it could help you bridge an income gap

You don’t know what’s around the corner, but that doesn’t mean you can’t prepare for it. A financial shock could derail your short- and long-term plans and might mean you face additional stress at an already difficult time. So, creating a financial safety net that you...

The pros and cons of borrowing more through your mortgage

Looking for a way to fund a large expense? Whether you want to make home improvements or buy a new car, your property might provide an answer. Depending on your circumstances, you might be able to borrow more through your mortgage. This would increase the overall size...

Your options if your interest-only mortgage ends soon

An interest-only mortgage could help you manage your budget more effectively, but it can also present a challenge when your existing deal expires. You might be wondering what your options are and how they could affect your long-term finances. While interest-only...

5 top tips for securing a mortgage

Applying for a mortgage, whether you’re buying your first home or remortgaging, can feel like a daunting task. While you might be putting it off, tackling it sooner could save you money and make it well worth your while over the long term. As mortgage advisers, we’re...

3 ways your property could be taxed as a homeowner

The UK property market has been a source of frustration, and the Labour government has identified the sector as a major barrier to economic growth. One of the areas that may be reviewed is how property is taxed. Indeed, the Institute for Fiscal Studies suggested tax...

The homebuyers checklist: 8 essential tasks to complete if you’re buying property

Buying a new home can be an exciting time, it could represent a new chapter of your life, whether you’re moving to a new location for work or searching for a property that will give your growing family more space. Yet, it can feel like there’s a lot to juggle too, so...

Celebrating more 5-star reviews than any other independent broker in Bristol!

Contact us today to find out why we've received over 650 hundred 5-star Google reviews

You have Successfully Subscribed!