What is ‘specialist lending’?

Specialist lending could help if you are struggling to get a mortgage with a high-street lender

Specialist lending is a phrase you might hear batted about by mortgage advisers, but what does it mean? Here is our guide to everything specialist lending.

Lending is generally split into high-street or specialist. Specialist lending simply means receiving a mortgage loan from a lender who isn’t a high-street bank or building society. High-street lenders generally have less flexible requirements that applicants must meet. In comparison, specialist lenders often take a more case by case view of mortgage applications, meaning they may accept people high-street lenders would turn away.

If we have suggested a specialist lender to you, don’t be alarmed. This is probably just because your circumstances may be better suited to their more flexible approach. Typically, a specialist lender is the best option for you when considering things like age, employment situation and credit history.

How does age have an impact? A specialist lender can be an option if you are looking to borrow a mortgage loan that stretches into your retirement. This is because when you retire your income may change or reduce, therefore there is a risk you might not have enough income to afford the payments.

How does your job have an impact? If you’re self-employed or a contractor, you may find it difficult to get a mortgage from a high-street lender. This is because you will usually need to provide a history of your earnings to prove your income. This can be easier said than done if your work isn’t consistent or you only changed jobs recently. A specialist lender may be more flexible about how you can prove your income, meaning you may be more successful in your application.

How does your credit history have an impact? Your credit report shows a lender your history with paying back loans or agreed payments. If you have a good credit report, it shows you are likely to make your mortgage payments reliably and so lending you money is less of a risk. In contrast, if your credit history includes a CCJ or missed payments, you may find high- street banks aren’t willing to lend to you. However, specialist lenders are often more willing to lend to people with ‘adverse credit’ or bumps in their credit history.

Check My File have a very useful article explaining about adverse credit – https://www.checkmyfile.com/jargon/adverse-credit.htm . If you would like to check your own credit score you can do so by clicking this link – https://www.checkmyfile.com/credit-report.htm?ref=guild&cbap=1 .

All specialist lenders differ in terms of what products they offer and the circumstances they’ll accept, so do speak to us if you think specialist lending might be the route for you.

If you’d like to discuss the options available to you, contact us today.

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