Couple who have been denied mortgage due to bad credit history buy friend’s £ 158,000 two-bed house with help from specialist lenders
- Kathrynn Topps and Ben Link bid £ 158,000 on a house in Cheltenham
- Ben was turned down for a mortgage due to his bad credit history and payday loans
- The couple turned to the online mortgage advisor who allowed them to buy a property
A young couple who have been repeatedly turned down for a mortgage due to their poor credit rating have revealed how they ended up on the housing ladder.
Ben Link, 30, and his fiancee Kathrynn Topp, 25, decided to buy the property they were renting from their owner, a close friend of Ben’s.
The couple made an offer of £ 158,000 on the property in their hometown of Cheltenham, which was accepted.
But Mr Link was refused a mortgage because of his debts of £ 8,500.
Ben Link, 30, and his fiancee Kathrynn Topp, 25, decided to buy the property they were renting from their owner
Bad credit mortgages
Most lenders require a credit check before granting a mortgage application.
If you have a poor credit history, some high street banks may refuse to lend you. You can, however, apply to Oak Park great for small busineess a specialist lender that caters specifically to clients who have faced illness, divorce, or other difficult life events.
These lenders are more likely to accept people with bad credit and tend to offer more flexibility in affordability ratings.
But they tend to charge above average interest and require larger deposits. They may require a loan-to-value ratio of 80% or less, which means you will need to provide at least a 20% down payment.
Mr. Link has been recommended to various mortgage brokers by his friends.
Three different brokers discussed his financial history with him and, after waiting weeks for a response, he was told his application had been rejected due to his adverse credit.
Mr Link had a bad credit rating due to missed payments on payday and personal loans as well as two county court judgments (CCJs), according to The sun.
In an eleventh hour offering he went to Online mortgage advisor, which matches bidders and mortgage brokers across the country.
Within 24 hours he was contacted by online advisor Jason Pulsford and four days later Jason returned with a tentative offer.
Jason turned the pair over to a lender who arranged and finalized their mortgage.
Mr Link was recommended to various mortgage brokers by his friends but refused help before an online company came to his rescue and gave him a foothold on the property ladder and bought this house (to the left)
First-time buyers in the 1980s deposit smaller deposits
Small deposit mortgages were seen as inherently risky and a symptom of the cheap credit boom that led to the financial crisis.
However, while Northern Rock’s 125% mortgages – which included a home loan and additional borrowing on top – could be a special type of mortgage madness, buying with a small deposit was nothing new.
In fact, the generation of homeowners who bought their first home in the 1980s and 1990s made, on average, smaller deposits than those who bought in the 2000s and early buyers today.
According to figures from the Mortgage Lenders Council, the average value of mortgages for first-time buyers in the 1980s and 1990s was 94%, compared to 85% since 2000.
The couple made an offer of £ 158,000 on the property in their hometown of Cheltenham, but Ben was refused a mortgage due to his debts of £ 8,500.
Ben said: ‘I was starting to feel very hopeless before I spoke with Jason. We hit it off immediately which made the process fun and stress free.
‘He would call us in the evenings to discuss anything we didn’t understand – he even called us while his girlfriend was in labor.
“Our mortgage is now fully processed and we now have the peace of mind that we can finally start planning for our future and making our home a home.
According to The sun, the couple took out a two-year fixed rate mortgage with Vida Home Loans at a rate of 5.05 percent.
They borrowed £ 119,000 with a deposit of £ 39,000.
Has the decline in home ownership been halted?
Homeownership levels are now similar to those observed in the 1980s
One of the defining characteristics of the UK property market in recent years has been the decline in home ownership, blamed on the fact that many hopeful buyers have been shut out of the market.
However, Nationwide, which is Britain’s largest construction company, raised the possibility that this decline has now stopped.
The latest figures from the English-language Housing Survey showed that homeownership levels remained “ broadly stable ” at 62.6% last year, up from 62.9% in 2016, a declared Nationwide.
Homeownership levels are now back to those seen in the 1980s and significantly below the peak of 70.3% in 2003.
First-time buyers have also reached ten years, according to Halifax, while figures from UK Finance showed their mortgages were up 15% in November 2017.
The first buyers have aged, however, and among those aged 25 to 34, around 37% own their own home.
“Growing accessibility pressures” weigh heavily on first-time buyers, Nationwide said.