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The Borrower
The client is a single, first-time buyer working for the NHS, looking to purchase her first home with a limited deposit in South East England, where property prices are higher than the national average. The applicant also had a more challenging credit profile requiring a lender who did not entirely rely on credit scoring.
The Situation
The client was a younger applicant working in the NHS as a trained medical professional, in the early stages of her career looking to purchase her first home through a Shared Ownership scheme. As a sole applicant, the client's loan-to-income LTI ratio sat at nearly 5 times income, a level that many high street lenders would have struggled to accommodate. Their credit history added a further layer of complexity, with a historic default and a CCJ relating to a parking ticket, registered within the past year, which had further impacted on her credit score. The Shared Ownership property was located in an area of the country with average house prices of £434,000. This presented an opportunity for our borrower to purchase her first home with a modest deposit in an area of the UK which would be out of reach for most first-time buyers. The option of borrowing up to 95% of the loan to share value meant that her dream of owning her first home could become a reality. In addition, the housing association had vetted the client prior to applying for a mortgage to confirm her income and credit profile was not a barrier to purchasing a shared ownership property. Any one of these factors might have been an issue to a mainstream lender. But with West One, these challenges were not prohibitive.
Our Solution
We were able to offer our Prime Plus Shared Ownership mortgage product up to 95% of the share value, a product which allows CCJ’s and defaults under £500 as standard, and can also accommodate higher value CCJ’s over 12 months old as well as up to 5 times income as standard.
The borrower required a £190k mortgage at 58.5% LTV of the open market value which was available on a 40-year term allowing annual overpayments of up to 10%. On the credit side, the recent CCJ fell under our £500 threshold, so it was disregarded, and the historic default was similarly explainable and deemed non-critical within the wider context of the application.
The Benefit
The benefit of working with West One on this case was our ability to offer tailored Shared Ownership products up to 100% loan to share value, looking beyond the credit score, historic default and recent CCJ. This is the kind of case that many brokers might briefly glance at before rejecting it – but there are definitely many cases just like these that just need a specialist solution. Homeownership is not automatically out of reach just because of a low credit score.
The Result
The client completed their purchase and got onto the property ladder with a limited deposit as a first-time buyer, something that had looked far from straightforward given recent credit history. But thanks to a more holistic approach to the case – in which it became evident that the borrower could afford the share of the property they wanted to purchase – they have now become a homeowner.
If you have a client facing a similar scenario with a recent credit blip, low credit score, or one that requires a shared ownership purchase above high street LTI multiples, get in touch with the West One residential team on 0333 123 4556 or at mortgagesales@westoneloans.co.uk and we would love to help.
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