Mortgage arrears are at their lowest level since 1994 and mortgage possessions have never been as low since records began in 2008.
This is the result of interest rates remaining at an all-time low, meaning mortgages are more affordable than they have been for an awfully long time.
This is good news.
You’d be forgiven for thinking that because of this, the number of County Court Judgement’s (CCJ’s) would also be at an all-time low. Yet, nothing could be further from the truth.
The number of CCJ’s registered against consumers has risen to the highest level in over a decade during the first six months of 2017, according to figures released by the Registry Trust.
In the first two quarters of this year, 592,552 CCJ’s were registered against consumers in England and Wales. This figure is up 41% on the same period in 2016 and is the highest half-year figure since before the financial crisis.
Delve a little deeper into the statistics and you also discover that the average value of CCJ’s decreased for the ninth consecutive year, falling 18% to an historic low of £1,509.
So what’s going on?
The facts show that more CCJ’s are being issued for smaller amounts than ever before. Why is that? If you think about modern lifestyles, we all now have more calls on our money than we used to have say 10 or 20 years ago.
Today, we have regular payments being made for mobile phones, broadband, satellite TV, video and music streaming services…The list goes on. In days gone by, these services simply did not exist.
So, if consumers default on these monthly payments, service providers are quick to take action. For example, as many lenders will confirm, missed mobile phone payments are often a root cause of CCJ’s.
This trend of low value CCJ’s shows no signs of abating, which can be a real problem when it comes to getting a mortgage. A CCJ takes 6 years to be wiped from a credit record and while it’s there, it makes it very difficult to obtain credit. It does not matter that the judgement was only for a few hundred pounds; it’s still a blot on an applicant’s credit record.
We are seeing more and more clients approaching us with these sorts of Credit blips.
Whilst the number we are seeing has increased, for each one we see there could still be 3 or 4 that wrongly believe that these credit issues will prevent them from getting a mortgage. Some have decided that their search is pointless before they’ve even tried or worse still they’ve visited their High Street Bank and thought “if they can’t help nobody can”.
This is just not the case.
This is where the experience, knowledge and competence of an Independent Mortgage Professional comes in. Only a small proportion of brokers that look at mortgages have any experience of dealing with cases like these, we do.
Optimum Independent Mortgage Advisers are proficient in placing mortgages where the applicants have had some adverse credit or credit blips. We know and have established underwriting relationships with those lenders that will consider these applications whilst still doing so at competitive rates.
Where credit issues are more serious we know those lenders who will assess each application on its merits and take a sensible view, taking into account all the circumstances presented.
We can’t guarantee that a lender will provide finance if you have had credit issues but we can make sure that your application is put before those lenders who are most likely to assist. Lenders that have assessed cases from us of a similar nature in the past and who will view our proposals as positively as possible. Ultimately, giving you the very best chance of securing finance.
Use our knowledge and experience to find mortgages that suit your individual circumstances and we can give you impartial advice on the pros and cons of each deal available.
Contact our Mortgage & Protection Adviser, Mark Alefounder on 01206 366700 or via email at [email protected] to arrange your appointment today.
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