Article by Sam Griffin - 17th September 2020

Limited Time Mortgages - Check Your Credit Report First

Freshly baked doughnuts. Clean, untrodden snow. And now mortgages can be counted among the finest things that last fewer than 24 hours. TSB and other lenders have begun offering limited time, one-day-only, 'get ‘em before they’re gone' mortgages to first-time home buyers.

Typically seen as the ‘riskiest’ group to lend to, first-time buyers had to watch in June as mortgage lenders retreated away from that part of the market to focus on safer customers – those with lower loan to value ratios, higher credit ratings, and more secure financial positions.

But the advent of limited time mortgages is a hopeful sign of returning lender confidence.

Why are lenders offering limited availability mortgages?

Since the UK housing market reopened in May, property transactions and prices have been steadily rising. This is good news for lenders, but the pandemic’s uncertainty has damaged their confidence when dealing with the less financially secure: first-time buyers.

First-time buyers and high loan to value ratios are two factors that make lending even more risky at the best of times, but with the furlough scheme coming to an end and house prices facing potential collapse, lenders are playing it safe by offering few, but tightly controlled mortgages to this group.

This means that first-time buyer, high LTV mortgage borrowers are ravenous for suitable deals, but left with little choice.

So, to avoid being totally overwhelmed by enquiries, TSB has taken measures to ensure they can lend to this group responsibly and profitably. In this case, by adding a time restriction to their mortgage deal.

On Friday 11 September only, TSB offered a mortgage specifically aimed at first-time buyers looking for a 90% LTV ratio. The standard variable rate is 3.49% and is fixed for five years. Maximum amount and term are £350,000 and 30 years.

Other lenders have also been offering limited time exclusive mortgage offers, such as Accord Mortgages and Coventry Building Society. Virgin Money are trying to combat the uncertainty by fixing their 90% LTV mortgage interest rates for seven to ten years.

Depending on the success of these novel mortgage deals, we may start seeing them made available more frequently.

What does this mean for my Credit Report?

Typical mortgage advice still stands. Ensuring that your Credit Report is accurate and healthy before applying remains solid advice.

The stakes, however, are higher with these limited time mortgages. Being declined has always been unfortunate, but it now also means that, not only do you risk losing the property, but also the mortgage itself. Where you would’ve previously had the opportunity to look over your application and Credit Report to figure out what went wrong before re-applying, now you would have no such luxury.

If there was ever a time to check your Credit Report, it’s before you apply for a mortgage.

This involves checking your account repayment history to see how your credit agreements have been reported. Each month will be recorded to show how you’ve managed your payments, and this information is vital for a large part of the credit checking process.

Your lender will want to see a long history of well-maintained credit agreements, across different account types. Lenders will look at your borrowing history to gauge your creditworthiness – the more reliable you seem, the better.

It’s worth checking this for yourself so you can be confident that you are putting your best foot forward when you submit your application.

In addition to checking your repayment history, you can also make sure your local council has correctly reported your Electoral Roll listing. A long-standing Electoral Roll listing can be used gauge your stability - further boosting your chances of a successful application.

Any court records will be reported too – such as CCJs or insolvencies – and these will drastically harm your chances of being accepted as lenders see them as major red flags.

All of this information – and far more – can be found on your Credit Report.

You can easily check your Credit Report online, and it’ll likely be instant (subject to passing reassuring security checks). This means you can still see the information that matters most, even moments before you submit your application.

There’s no need to feel rushed when it comes to applying for your mortgage, as your Credit Report should be available to you whenever you need it.

Not only that, but once you’ve got your Credit Report, you’ll be able to download a PDF copy. If your mortgage broker needs it before you submit your application, you can share it with them - usually all on the same day.

How do I check my Credit Report?

There are different Credit Reference Agencies (CRAs) in the UK, meaning you actually have separate Credit Reports. As they operate independently from one another, each CRA can hold different information. For this reason, it’s best to check your Credit Report at each Credit Reference Agency to ensure that you see everything they’re holding for you.

This way, you can be confident that you’ve seen everything a mortgage lender will see when they run a credit search on you.

checkmyfile makes this process quick and easy. Your Multi Agency Credit Report is the most detailed in the UK, including your full information from all three Credit Reference Agencies: Equifax, Experian, and TransUnion on one easy-to-use to use platform.

You can try checkmyfile free for 30 days, then just £14.99 per month. Cancel online at any time.

The UK's First Provider Of Online Credit Reports

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