The most common application problem encountered by potential borrowers this year is multiple mortgages, according to advisory firm Unusual Mortgages.
It surveyed 100 mortgage applicants who were not able to find their ideal mortgage directly through a high street lender and had decided to approach an IFA instead.
The leading ‘unusual’ reason for people taking mortgages over the last 12 months was multiple mortgages - with 20 per cent of respondents - followed by problems with employment status (16 per cent), debt consolidation issues (14 per cent), income and affordability checks not being passed (12 per cent) and rejections based on divorce and separation (10 per cent).
Chris Morgan, lead adviser at Unusual Mortgages, pointed out that just because the first mortgage lender or adviser turns an application down, it does not always mean a deal cannot be arranged.
“Sometimes applicants do not fit into tick boxes and electronic processing systems, so find a financial adviser that will treat you as an individual and use their knowledge to run bespoke research on your behalf.”
| Top 10 unusual mortgages 2016 |
1. Multiple mortgages (20%) |
2. Employment status (16%) |
3. Debt consolidation (14%) |
4. Income and affordability (12%) |
5. Divorce and separation (10%) |
6. Adverse credit (8%) |
7. Expatriate mortgages (7%) |
8. Capital raising for unusual purpose (6%) |
9. Second home (4%) |
10. Borrowing into retirement (3%) |
Back in July 2014, Ipswich Building Society targeted “mortgage misfits” such as small business owners and the self-employed with a new range of deals.
Since then, various mutuals and specialist lenders have attempted to cater for those borrowers rejected by mainstream banks and building societies.
This year has seen the emergence of several new providers aiming to serve the self-employed or those with adverse credit, promising individual underwriting and more flexibility.
peter.walker@ft.com
