Sometimes a case study can help brokers more than an overview of the underwriting criteria.
This week we are focussing on Shawbrook and I hope some of these case studies help you identify opportunities amongst your current cases and clients.
Scenario: Divorce settlement and high rise property. Client completed on a secured loan four months ago for debt consolidation, but then needed a new loan due to a messy divorce settlement. Client had good income, though due to divorce had missed some recent credit card payments. Client was struggling with other lenders due to recent secured loan and the nature of the security property which was an apartment in an 18 story block in London.
Result: Shawbrook completed on this case at a rate of 8.9%.
Scenario: BTL refurb – no tenant. This BTL case involved a client with three investment properties who needed to raise funds to pay for home improvements to the security. It was light work consisting of redecorating and central heating. Due to the works that needed to be carried out there was not going to be a tenant in place on completion.
Result: Shawbrook completed on this case at a rate of 8.45% with a letter from the agent confirming rental/demand. This was an exception due to the clients overall investment experience & the modest LTV.
Scenario: Recent mortgage and credit card arrears. Client needed to borrow £70k to clear all credit to save over £1k per month in outgoings. Client had a good credit score, although he had been one payment down on his mortgage (within the last 12 months) and one down on a credit card.
Result: Shawbrook completed the case for the amount required and the client was delighted as other lenders were charging higher rates or capping their advance at 65%, when he required 70%.
Scenario: Very recent purchase. Client needed to borrow £20k to reimburse him for improvements made to his property. He had only lived in the property for 6 weeks and was struggling to get his current mortgage lender to agree to a further advance.
Result: Due to strong score, good income and overall client profile Shawbrook agreed to the full loan, without the client having lived in the property for 3 months. This was a referred case agreed at 8.9%.
Shawbrook will lend for transfer of equity and have seen an increase in this type of case recently.
Shawbrook will also consider cases from clients where they are on a rolling contract via an agency, provided they have been in continuous employment via the same agency for 12 months.
Shawbrook lends for business purposes and will do a second charge on BTL properties.
Talk to us about your cases which may not fit criteria but where you think it makes sense to lend.
We are always happy to refer common sense applications even if they don’t fit criteria or another lender might help.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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