Mortgage underwriting is an exercise in risk mitigation. The cheapest rates are only available where lenders have mitigated the most risk. This includes your personal circumstances, the type of property you want to mortgage and every little detail of your financial track record. These lenders will decline to lend if there’s even a tiny issue that happened years ago.
The cheaper the rate, the fewer people will qualify. Lenders filter out any problem that might cost them money, effectively you’ll need to be ‘triple filtered’ i.e. ultra squeaky clean!
This means that even a faint smudge on your credit history, a property that has the teeniest of problems (even if they’re easy to fix) and your current fluidity all result in the lender’s computer saying ‘No’.
Bridgers don’t apply same criteria. Don’t’ get me wrong, they’re not stupid and there is a level of risk mitigation in operation, but more liberally.
Mortgage lenders are lending for long term, bridgers for much shorter term. So mortgage lenders are looking into the future assessing your ability to maintain the loan. Bridgers, on the other hand, are only looking 6-12 months ahead depending on the term of the loan. They’re more willing to compromise and will cut you some slack if they can see potential.
Repossession is the ‘nuclear option’ – both lenders can do it, but while some mortgage lenders can offer payment holidays to help with financial hiccoughs, they will still repossess if they see no solution to the problem.
Bridgers aren’t as trigger happy as people think. The best bridgers are investors and would rather work with you to get a positive outcome than pull the rug out from under your feet at the first sign of a problem.
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