Research shows that ‘non-vanilla’ customers are being turned down for financial products and services
“Non-vanilla” customers refer to customers who have unconventional or complex financial situations or needs that cannot be satisfied by standard financial products and services. For example, a customer with a large amount of credit card debt or a self-employed individual with irregular income and only one year’s accounts may be considered “non-vanilla”.
In the mortgage industry, “non-vanilla” customers often require more specialised lending solutions, such as unconventional loans or flexible repayment terms, to meet their financial needs. These customers may face difficulties in obtaining a mortgage from traditional mortgage lenders, who may not have the capacity or willingness to cater to their unique financial situations.
Here at Greenacre we can help “non-vanilla” customers to secure a mortgage who have been rejected by a high street lender or their main bank. We can direct you to alternative specialist lenders who suit your borrowing needs. We are a Whole of Market independent mortgage broker, offering a choice of around 100 lenders and up to 25,000 different mortgage schemes.
Read our blog on How do you apply for a mortgage in unique circumstances, which includes advice for these with complex financial and personal circumstances.
So, can I get a mortgage with one year’s accounts?
Yes, it is possible to get a mortgage if you only have one year’s accounts, but the process may be more challenging, and the loan options may be more limited. Here are some factors to consider when applying for a mortgage with only one year of financial information:
- Lenders prefer two years of financial information: Most lenders prefer to see two years of financial information when evaluating a mortgage application. This helps them determine the borrower’s stability and ability to repay the loan. However, if you have only been in business for one year, you may still be able to find a lender that will consider your application if you can prove your income, previous salaries and any dividends.
- Self-employed borrowers may face additional challenges: Self-employed borrowers may face additional challenges when applying for a mortgage with 1 year’s financial information. This is because lenders typically prefer to see two years of tax returns to verify income and establish stability. Self-employed borrowers may need to provide additional documentation from a qualified accountant, such as a profit and loss statement or balance sheet, to demonstrate their financial stability.
- Higher down payment may be required: Lenders may require a higher down payment from borrowers with only one year of financial information. This is because the lender wants to reduce the risk of lending to someone who may not have a proven track record of stability. The higher down payment helps protect the lender in the event that the borrower defaults on the loan.
- Higher interest rates: Borrowers with only one year of financial information may also face higher interest rates compared to those with two years of financial information proving their annual income. This is because there is less lenders offering this and the options will be limited
- Consider alternative lenders: If you are unable to secure a traditional mortgage with a traditional lender, you may consider alternative lenders, such as non-bank lenders or specialist lenders. These lenders may be more flexible and willing to consider your application with only one year of financial information. However, it’s important to thoroughly research the lender and compare their rates and fees to ensure you’re getting a fair deal.
- Build a strong application: Whether you’re applying for a mortgage with a traditional lender or an alternative lender, it’s important to build a strong application. This includes having a good credit score, demonstrating stability in your personal and professional life, and providing any additional documentation that may be requested by the lender.
As specialist Mortgage Advisors, Greenacre Financial Services are here to help with mortgages for those in a ‘non-vanilla’ situations.
Can I get a mortgage if I’m in debt?
Yes, you can get a mortgage even if you’re in debt, but it may be more challenging. Lenders consider several factors when determining your mortgage eligibility, including your credit score, income, affordability and debt-to-income ratio. If you have high levels of debt, it may lower your credit score and increase your debt-to-income ratio, making it harder to get approved for a mortgage.
However, every lender has different criteria and standards, and some may be more lenient than others, so it may be possible to get a mortgage even if you have debt. It’s best to speak with a lender or mortgage specialist like us here at Greenacre to determine your options.
Read about Mortgages for contract workers in our blog which include details on who can qualify for mortgages and what type of mortgages are available.
In conclusion, it is possible to get a mortgage with only one year of financial information or if you are in debt, but the process may be more challenging, and the loan options may be more limited. If you’re in this situation, it’s important to consider alternative lenders and build a strong application to increase your chances of being approved for a mortgage.
Don’t give up on your dream home, there are options out there to help ensure everyone has equal access to homeownership. Speak to an expert here at Greenacre so we can help you secure a mortgage – whatever your situation.
For more information about any of our services, including getting a mortgage with one year’s accounts, please do not hesitate to get in touch by calling us on 0203 3939 222.
