Miscellaneous

Why Was My Mortgage Declined?

 

Why was my mortgage declined?

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Did you know that, on average, 340 mortgage applications will be declined today?

Small comfort, especially if it was you who received the No.

Specialist lending is an area of growth, it is rising from the need for solutions to consumer problems that the high street lenders cannot hope to solve. These high street names have massive reserves, as dictated by Regulation.  The media-hype leads us to believe these lenders want to help, however, this is a far cry from the truth, the simple fact is that they do not want risk, they will not consider risk, and they will not lend where a risk may even be of their own perception and making.

Yet the very fact they perceive there is a risk, does not, however, mean the risk is real.

As peoples’ lives change and evolve, mortgage and loan applications will continue to increase in complexity, and complexity does not sit comfortably with risk appetite, nor tick-a-box criteria checklists. Therein lies the problem… You cannot fit a round peg into a square hole – you need a corresponding round hole for everything to fit well.

Anyone classed as complex, outside-the-box, or having minor adverse credit, now has the chance to obtain mortgages and loans that until recently, were simply not available mainstream.

How are needs changing? Here are a few thoughts for you, in answer to the question “Why was my mortgage declined?”

  • Since 2008 (the year of the Crash) there has been a 25% increase in self-employed workers
  • Over 1 million people are now on Zero-Hours contracts
  • 1 in 7 people will be over 75 years old by the year 2040
  • On average, 3,311 County Court Judgements were registered every day during 2017
  • Consumer debt is growing, it has already reached £1.59 Trillion

Credit blips, missed or late mortgage, loan, credit card or utility bill payments, are becoming ever-more common.

Here at Step-Up Loans, we are proud to boast that as an Independent, we have access to the whole marketplace of lenders, not just a few favourites or a restricted panel. If it can be done, we are able to do it, whether it is for personal use or business purposes. Whether employed, self-employed, zero-hours or a contractor. Whether you are 21, 61, or 81. And in certain cases, whether you are not a homeowner but are able to have a Guarantor who is.

Your best plan is to call us directly – Everyone is different, everyone has a story to tell.

Let us listen to your story and find the solution that’s needed.

Let us say “Yes, we can help” – Have you had a mortgage application declined?

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp, BBM or Viber, 07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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6 reasons why

6 Reasons Why You Should Consider A Second Charge Loan

6 reasons why you should consider a second charge loan.

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Interest rates.
These are much more competitive than you may realize, and are often comparable to regular mortgage rates, with a choice of variable or fixed rate options.

Affordability assessment.
Second charge lenders may be more flexible than first charge lenders. Both types of loan are heavily regulated, with the intention of providing the best advice for you, the consumer, however, second charge underwriting often follows a less stringent set of rules, and the lender underwriters are able to treat you as a human, not a number.

Adding a partner.
It is often possible to add a partner to a second charge, allowing income to be considered for both parties.

Loan purposes.
Requirements such as home improvements, debt consolidation, tax bill payment, school fees, holiday home purchase, all of these and many more, are acceptable purposes.

Interest only.
Interest-only products are available at very competitive rates, and, as there is no structured capital repayment built-in, these can be a very affordable alternative in many cases.

Completion times.
Dedicated and experienced underwriting teams work very hard to turn around cases in record times. Secured loans are very much faster than mortgages and remortgages.

Let us say “Yes, we can help” – 6 reasons why you should consider a second charge loan

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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Avoiding loan fee fraud

Avoiding Loan Fee Fraud – What You Need To Know

Avoiding loan fee fraud.

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The FCA is warning consumers about avoiding loan fee fraud.
The Financial Services Authority has issued a public warning after consumers lost three and a half million pounds in fraudulent loan applications last year.
The regulator says it has seen a big increase in this type of fraud, with the number of people complaints about such scams rising by 44 percent from 2016 to 2017.
These scams typically target those who are in distressed financial circumstances and looking for a short-term loan.
When searching for loan providers online, customers are contacted by an unregistered firm informing them that they have been approved for credit, provided they pay an upfront fee.
The FCA says some customers are persuaded to pay multiple fees, with the average loss being £740.
The regulator added that research shows that seven out of ten consumers (72 percent) had not heard of such lending scams. It urged people to check that a loan provider is authorized by the FCA.
An FCA officer said: In 2017 there were 4,700 reports of loan fee scams made to Action Fraud. It has now overtaken investment fraud as the most common scam reported to the FCA. Scammers often target the most financially vulnerable, on lower incomes and with poorer credit ratings.
This issue is somewhat complicated by genuine loan brokers charging a fee for their services, but fees are not normally paid upfront, other than the cost of a property valuation. Such brokers should be fully authorized with the regulator, and if the loan does not then materialize, consumers have a right to redress. StepUpLoans.co.uk and Step-Up Finance are fully authorized and regulated by the FCA (Register number 303044) and our details can easily be found on their website. All of our Lenders are also fully authorized, and therefore accountable.
Many thanks to the FCA for the information contained in this post.

Let us say “Yes, we can help” – Avoid Loan Fee Fraud

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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Interest Rates

Interest Rates

Interest Rates

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This is very worrying about Interest Rates.

70% of Brits can’t state what the current Bank of England Base Rate is, according to new research from a major online money website.

Just 1 in every 100 Brits understands how a hike of the current 0.5% rate would affect their mortgage repayments.

23% of respondents said they didn’t know how it would affect their pay packet, and 41% believe their pay would not be affected at all.

And when asked what the term ‘interest rate’ meant, 55% admit to not knowing at all, while 8% believe it is the value of how much interest their bank has in them. Very worrying…

81% of 18-24-year-olds did not understand the term ‘interest rate’, compared to 57% of 45-54-year-olds.

40% of men were able to identify the current Base Rate compared to 25% of women, and 32% of women admitted their partner is more knowledgeable on the topic, compared to just 7% of men.

When asked who in their household was the most knowledgeable about rates as a whole, 43% claimed it was themselves – yet the majority of people who answered this way (63%) actually got the current rate wrong, or didn’t know it at all…

There was also a clear gap between different areas of the UK – People in the South West were the most knowledgeable, with 45% of respondents correctly stating the Base Rate, followed by 35% in the South East and Northern Ireland. However, only 14% of those in Wales were able to provide the right figure, the lowest of all the regions surveyed.

A spokesperson for the website said: “…we’re encouraging people to take control of their finances today and learn how any future changes could affect their money”.

And here, at Step-Up Loans, we agree.

“The Bank of England Base Rate is the official interest rate set by the Bank of England’s Monetary Policy Committee. Banks and Building Societies use the Base Rate to calculate interest rates for some mortgage and loan products. The Bank of England Base Rate is currently 0.50%

All clear?

Let us say “Yes, we can help” – Interest Rates

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp, Viber  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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Secured Loan

Secured Loan

Secured loan

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When is it time to think of a secured loan? Well, if you thinking of raising money for household maintenance, repairs, extensions or perhaps personal costs or a large tax bill, then, for most people, a remortgage is probably the first thought. Remortgaging has hit a 9-year high and can allow often allow you to switch to a product more suitable for your financial situation, often improving your payable interest rate. However, borrowers with bad credit, very small mortgages or who are self-employed, may discover that the application process and fees incurred from a remortgage can offset these advantages.
A second charge mortgage/loan, often known as a secured loan, is an additional loan paid alongside an existing mortgage, often with another lender being used. So, what are the benefits of a secured loan?

Low Credit Score
Previous or current adverse credit such as County Court Judgments (CCJs) or defaults on payments, will likely cause either a rejection by a lender or higher interest rates when applying for a remortgage. Second charge loans offer a viable alternative for those with adverse credit, as many lenders do not rely on credit scoring alone to approve loan applications – there is a degree of human underwriting involved. They offer a more bespoke approach based on your individual circumstances, which means they can make decisions based on the whole picture providing it can be evidenced that the loan is affordable to you. Second charge mortgages are regulated by the Financial Conduct Authority meaning you are offered the same protections as those provided in connection with first charge mortgage lending.
We have access to a recently launched second charge product from one of our many lenders, that has no minimum credit score, considers each application on a case-by-case basis and accepts CCJs and defaults either below £350 or over 2 years old.

Self-Employed or Fluctuating Income
It can also be difficult for self-employed workers, zero-hour contract applicants or those with a fluctuating income to apply for a remortgage due to the tougher regulatory stance now being taken by lenders, on both income and your ability to repay a loan. As with those with a poor credit rating, second charge loans are often a way of assisting self-employed borrowers providing you are able to evidence your income. We have access to a second charge lender that only requires one year’s self-employed trading history and will consider undistributed profit and projections.

Speed and Cost
Another benefit of a second charge loan is the speed and cost of the application process when compared to that of a remortgage, which could incur large costs such as an ‘Early Redemption Charge’ (ERC) potentially running into thousands of pounds as a penalty for ending your current mortgage product early. With a secured loan there are options to pay survey fees upfront or add them to the borrowing, and there are no conveyancing or solicitor costs, unlike a remortgage. Where speed is important, where time or deadlines are tight, or you need to raise money quickly, remortgaging can be a lengthy process, most commonly taking between one to two months providing that the application runs smoothly and doesn’t have any problems. Complications such as a rejected application may be more common with self-employed and low credit score applicants. Hence, the benefits of a secured loan with funding in a matter of a few days, perhaps a couple of weeks, make clear and logical sense when compared to a remortgage.

Let us say “Yes, we can help” – Secured Loan

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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Bank of Mum and Dad

Bank Of Mum And Dad

Bank of Mum and Dad

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You have probably heard of what is often referred to as the Bank of Mum and Dad stepping in to help their children get on the property ladder? But did you know this unusual `bank’ was reported to be the ninth-biggest lender in the country last year? That’s quite a surprise for many people.

However, it’s probably not news to you that many first-time buyers struggle with raising large enough deposits and meeting the regulatory affordability criteria of the lenders in the marketplace – therefore many are being helped by their parents using their own parental savings, liquidating bonds and releasing equity to gift deposits.
But… sometimes families who are desperate to help their children get their first home, simply don’t have these options and cash resources to dip into. So, what other options are left for them?
Have you ever considered Second Charge loan to release home equity instead of using cash savings?

Research has revealed that the Over-50’s in London account for 65% of owner-occupied housing wealth – that’s an astonishing amount of housing equity tied-up in bricks and mortar. This embedded equity is perfect to help with the first-time buyer problem.

So, if you or your relatives want to help, but simply don’t have the cash resources available – a Second Charge mortgage, also known as a Secured Loan, may be the perfect workaround and keep the entire family happy. Bank of Mum and Dad is able to help, whilst the next generation is able to get on the housing ladder with a gifted deposit.

With interest rates comparable to normal mortgage rates they can be a cost-effective way of borrowing. It is also perfect where you might already have an existing mortgage, particularly with high early-redemption penalties, or an attractive interest rate that you don’t want to lose.

As an additional benefit, they’re quick – usually a two to four-week completion average, but can be as little as days, therefore allowing plenty of time for `the kids’ to get sorted with a gifted-deposit mortgage.

Let us say “Yes, we can help” – Bank of Mum and Dad

Office Telephone: 01379 644061

Office Mobile: SMS, Text, WhatsApp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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funding home improvements

Funding Home Improvements

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When did you last think of Second Charge mortgages for funding home improvements?

Second Charge mortgages can be the ideal alternative to a re-mortgage or unsecured loan if these don’t suit your circumstances, or where you would fail an application due to underwriting criteria.

This is why they can be really useful for when you want to carry out home improvements.

Here’s how we helped someone fund a home improvements project in just 7 days from the application being received to funds being released.

Situation
A client needed £35,000 for funding a home improvements scheme. This included replacing and insulating the roof, rebuilding the staircase and converting the loft into an en-suite bedroom – converting and transforming the property from a 2-bed  into a 3-bed house.

Challenge
The client had sufficient equity in their first charge mortgage, however, did not want to raise additional finance through a further advance or a remortgage due to high redemption penalties that would be incurred by changing the existing arrangement.

Solution
In just 7 days…
The client received their funds – a £35,000 Second Charge mortgage… and they were able to complete the project.

Let us say “Yes, we can help” – Funding home improvements

Office Telephone: 01379 644061

Office Mobile:  SMS, Text, WhatsApp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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Unusual cases

Unusual Cases

Unusual cases

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Here are some straightforward, yet unusual cases and examples, of recent second charge loans.
Maybe you are in a similar position? If so, do get in touch.

Interest-only loan – where it reverts to capital and repayment after 5 years.
Mrs. T. had gone self-employed and wanted to reduce her outgoings in the short term but repay the entire loan over the full term. This was arranged and at a very competitive price within her budget.

Large consolidation loan – The customer failed affordability for a first mortgage application.
In general, our lenders disregard all consolidated credit from their affordability calculations and will consider up to 100% debt consolidation. This is a common issue which can often be accommodated with a second charge loan allowing you to remortgage, usually penalty-free, within in a year or so, when mainstream lenders are able to assess a case and meet lending criteria.

A remortgage solution – Often a remortgage would force a borrower to lose their interest-only product and could force them to take higher mortgage rates or even need to downsize immediately. A second charge could raise the cash needed and keep outgoings low. Therefore the borrower could stay in their home until they were ready to downsize in a few years time and pay off the interest-only mortgage at that point, remaining in control.

Borrowers still on work probation period – This can often push a remortgage option outside of lender criteria, as the lender requires an employment history track-record of stability for long-term lending. The options are therefore very limited. We have access to a number of lenders which consider work probationary periods, also special considerations for contractors and rolling contracts.

Newly self-employed business – Often there is the need to use dividend income from a previous business to demonstrate a loans’ affordability. Example: A client wanted to raise £100,000 deposit for a Buy-to-Let purchase, however, there was a complex mixture of employed and self-employed income, plus a recent change of business status. Although the proposition made perfect sense, a first charge lender would be unwilling and unable to consider the complexity, therefore a second charge loan was a perfect solution.

Maybe you are in one of these above positions? Situations can be really niched or mildly complex, yet there are solutions available.

Let us say “Yes, we can help” – Unusual cases

Office Telephone: 01379 644061

Office Mobile: SMS, Text, Whatsapp, BBM or Viber,  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

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second charge loan identifier

Second Charge Loan Identifier

Second charge loan identifier:

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Sometimes, a second charge loan can be a better solution than a remortgage, but it’s not always easy to know when. That’s why we’ve put together the second charge loan identifier.

When a second charge loan works better than a remortgage:

When you are on a low SVR or base rate tracker mortgage which is too competitive to remortgage away from but still want to raise additional funds.

When you are on an Interest-Only mortgage; A remortgage will force you onto Capital and Interest, often raising payment to an unaffordable level.

An excellent solution for recently self-employed people, and those who need to work off projected figures to prove income.

For those with adverse credit in the last 3 years.

For those who wish to raise money on Buy-to-Let properties.

A Second Charge can be used for almost any purposes (consolidation, business purposes, tax bills, etc)

Product overview: 

Loan amounts from £10,000 – £2,500,000

Low interest rates

Up to 95% of property value, sometimes 100%

Adverse credit registered over 12 months ago may be ignored

Fixed rates are also available

1st and 2nd charge BTL loans available

There is the ability for cases that are outside criteria to be referred

Interest-Only products are available

Can raise money on residential property for business purposes

Let us say “Yes, we can help” – For second charge loan identifier assistance

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp or Viber  07951 238527

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Self-Build development loan

Self-Build Development Loan

The Self-Build Development Loan

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Here is a great product for you, or those who want to build a house in their garden.
The problem many borrowers have is lack of development experience, or the loan is deemed as `regulated’ so there is a lack of lenders.

This new product availability ticks lots of boxes as follows:

  • Available on regulated cases
  • You don’t need to be an experienced developer
  • Ground-Up developments including:
    o Self-build
    o Barn conversions
    o Extensions increasing property by more than 50%
    o Basement excavations
  • Up to 50% of the purchase price
  • Up to 25% of site value if already owned
  • Up to 100% of build costs
  • England Scotland and Wales

There are many other types of loan product available for non-standard or unusual reasons, including an Open-Ended loan, with no expiry date, and suitable for land or property regardless of condition – ideal for refurbishment of a property that is deemed Uninhabitable; no kitchen, no bathroom, rising damp, wet/dry rot, Etc.

Let us say “Yes, we can help” – Self-build development loan.

Office Telephone: 01379 644061

Office Mobile:  Call, SMS, Text, Whatsapp or Viber  07951 238527

THINK CAREFULLY BEFORE SECURING ANY LOAN AGAINST YOUR HOME

For your no-obligation quote, click HERE…

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