45% LTV, Bad Credit & furloughed... Chances of mortgage acceptance?

jamielutz1987 · 25 June 2020 at 4:12PM

MadMattUK said:

Underwriters seem to be slow at the moment, but with that LTV you will get through, you might pay a slight premium in interest, but it should still go through.

@MadMattUK Out of interest, what do you mean by having to pay a premium?

[Deleted User] · 25 June 2020 at 4:17PM

jamielutz1987 said:

MadMattUK said:

Underwriters seem to be slow at the moment, but with that LTV you will get through, you might pay a slight premium in interest, but it should still go through.

@MadMattUK Out of interest, what do you mean by having to pay a premium?

Interest rates factor in risk, poor credit is a risk factor so you might pay a premium for that by having a higher interest rate. So two people borrowing the same amount, on the same LTV, over the same period with the same income, however the one with poor credit might get a rate that is 0.5% more than the one with good credit or have to go to a poor credit lender, who charge higher interest rates.

jamielutz1987 · 25 June 2020 at 4:25PM

MadMattUK said:

jamielutz1987 said:

MadMattUK said:

Underwriters seem to be slow at the moment, but with that LTV you will get through, you might pay a slight premium in interest, but it should still go through.

@MadMattUK Out of interest, what do you mean by having to pay a premium?

Interest rates factor in risk, poor credit is a risk factor so you might pay a premium for that by having a higher interest rate. So two people borrowing the same amount, on the same LTV, over the same period with the same income, however the one with poor credit might get a rate that is 0.5% more than the one with good credit or have to go to a poor credit lender, who charge higher interest rates.

Not with Halifax (or other high street lenders). Their mortgage rates are as published, you either get it or not, there's no loading based on individual credit profiles.

MovingForwards · 25 June 2020 at 4:42PM

Even my sub-prime lender lists it's interest rates for all the bad credit profiles it will take on, so people know in advance what they could be offered.