Specialist Lending Mortgages | Mortgage Advice | Manchester Money
Last updated: 13th June 2023
Specialist Lending Mortgages: What They Are and Who They're For
If you’re in the market for a mortgage and don’t meet the standard criteria for a traditional mortgage, a specialist lending mortgage or (SLM) may be the right option for you. Specialist lending mortgages are offered by specialist lenders who are willing to take on borrowers who may have a higher risk profile or who have unique financial circumstances.
There are several reasons a borrower may require a (SLM). For example, if you have a poor credit history, it may be difficult to obtain a mortgage from a traditional lender. Specialist lenders, on the other hand, are more willing to take on borrowers with a less-than-perfect credit history.
If you’re self-employed, it can also be difficult to obtain a traditional mortgage, as many lenders require proof of steady income. However, specialist lenders are more likely to consider your unique financial circumstances, such as irregular income streams or a lack of financial records.
Another reason you may require a (SLM) is if you have a non-standard income stream, such as rental income from a property. Specialist lenders may be more willing to take into account this type of income when considering your application.
Types of Borrowers
Specialist lending mortgages can benefit a wide range of borrowers. For example, if you’re a property developer and need to borrow a large amount of money to fund your project, a (SLM) may be the right option for you. Similarly, if you’re a high net worth individual and require a mortgage for a high-value property purchase, a specialist lending mortgage may be the best way to secure the financing you need.
Specialist lending mortgages can also benefit borrowers who have experienced financial difficulties in the past, such as bankruptcy or foreclosure. While traditional lenders may be unwilling to lend to these borrowers, specialist lenders are more willing to take on higher-risk borrowers.
Characteristics of Specialist Lending Mortgages
Specialist lending mortgages can vary widely depending on the lender and the borrower’s individual circumstances. However, there are some characteristics that are common to most specialist lending mortgages.
Interest rates on (SLM) are often higher than those offered by traditional mortgages. This is because specialist lenders are taking on borrowers with a higher risk profile, and therefore require a higher rate of return to compensate for this risk.
There may also be additional fees and charges associated with (SLM). For example, some lenders may charge a higher arrangement fee, or require you to pay for additional legal or valuation services.
Advantages and Disadvantages
One advantage of (SLM) is that they provide a viable option for borrowers who may not be able to secure a traditional mortgage. Specialist lenders are more willing to consider your unique financial circumstances, which can increase your chances of being approved for a mortgage.
However, there are also some disadvantages to specialist lending mortgages. The higher interest rates and fees associated with these types of loans can make them more expensive than traditional mortgages. Additionally, some specialist lenders may be less reputable than traditional lenders, so it’s important to do your research and choose a reputable lender.
Choosing a Specialist Lender and Applying for a Specialist Lending Mortgage
When choosing a specialist lender, it’s important to do your research and compare lenders to find the best option for your individual circumstances. Look for a lender with a good reputation and positive customer reviews.
When applying for a specialist lending mortgage, be prepared to provide additional documentation and information about your financial circumstances. This may include bank statements, tax returns, and proof of income.
At Manchester Money we have mortgage advisors that specialise in specialist lending mortgages, so if you have any questions, please don’t hesitate to get in touch. Simply give us a call on 0161 503 9232 or click to send us a message.
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