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The Current State Of Non Status Mortgages In The UK

by Jim ONeil on May 10, 2011

in Mortgages

Arranging for a loan has historically not been easy for UK borrowers that have a non status credit history. Things have gotten particularly difficult within the past few years, due to changes within the UK mortgage and real estate markets.

Mortgage availability is now restricted for all borrowers, including those of the non status type.

During the real estate market peak, many lenders were eager to make loans to non status borrowers. Some of them were even willing to offer no credit check loans. However, this market subsequently collapsed and this, combined with the credit crisis, caused mortgages to be harder to come by than in prior years.

The number of arrears and defaults by borrowers in the recent past made it hard for lenders to recoup their funding. When the real estate market crashed, some lenders found that properties under their control were in negative equity, which made their situation even worse.

During 2010, homebuyers began to see fewer non status mortgage lenders because many had withdrawn from the market after suffering enormous losses.

It is now difficult for UK non status borrowers to obtain a mortgage due to the limited number of lenders. The few companies still offering this financing have high loans APR designed to protect their level of risk. Someone who is non status will likely be denied a mortgage from a traditional lender and will be forced to seek out this higher-priced home financing.

Only a few lenders are willing to provide no credit check loans for homes to non status borrowers. The income and banking history of the borrower must be strong in order to qualify. With the high price of UK housing, most home buyers will need a mortgage and facing limited options is something that may ultimately impact their decision to purchase a home.


Buy to let investment has become increasingly popular to the UK investor. Buy To Let mortgage lenders differ in approach. Buy to let borrowers do have to jump through some extra hoops to satisfy mortgage lenders. The term of a buy-to-let mortgage is likely to be somewhere in the region of 5 to 45 years. If you are considering buy to let property as an investment then it is important that you have a good understanding of the current market. You should keep on enhancing yourself on the new methods of investment. For this new updates on property education is a must.

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You take out a regular mortgage, when you are ready to rent, you approach your lender for permission to let. Depending on the perceived risk, there may be a fee for this, or you may have to move onto a specific BTL mortgage.


Repopessions's and mortgage lenders:
Help me understand just what is in it for mortgage lenders to reposess a home? They take over property tax responsibilities, HOA fees, up keep on the property and of course no earnings from the house. They are in the business of lending money in order to make money not hold properties. I would think from a business point of view the last thing they would want to do is reposses you.
Are we the public being punished, are they trying to teach us a hard lesson?


What Are Non-Status Mortgages?

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