Let me tell you about a couple of my clients. Let’s call them Mr and Mrs W. They’ve been home-owners for around 5 years and have good jobs, steady incomes and an impressive amount of equity in their current home. And yet……….when they made enquiries with their current lender about taking out a new mortgage (small increase, nothing shocking) they found out two things:
1) They wouldn’t be able to have an interest only mortgage regardless of the fact that they’d had one for several years and paid down the repayment every year on time and
2) They wouldn’t be able to borrow the additional funds they required because of the ‘stricter criteria’ now in force.
And they’re not alone. You see, Mr and Mrs W are typical of people who suddenly find that they wouldn’t qualify for a new loan and, shockingly, it’s estimated that up to 40%* of all home-owners may fall into this ‘trap‘.
The system has become much more inflexible in recent months and there are much stricter judgements of affordability (remember bank statements can be scrutinised now with everything from petrol to childcare being considered).
After they had advice from us, we found a solution that worked for them and allowed them to move to a larger home for the family.
Read more of our Case Studies.
If you find yourself in this situation or don’t want to tackle the mortgage maze alone please get in touch.
* Source BBC News 24th April, 2015