Specialist Lending Explained

What are specialist mortgages?

High street banks can offer tempting deals at competitive rates, but they tend to use a ‘one size fits all’ way of measuring applicants. Because of this, not everyone is eligible for these mortgages. Specialist mortgages are designed specifically for people who wouldn’t be eligible with a high street bank, for example someone with bad credit or a self-employed worker.

Specialist mortgages are also available for more bespoke customer requirements, such as:

• Guarantor Mortgages

• Joint Borrower Sole Proprietor Mortgages

• Tier 2 Visa Mortgages

• Zero-Hour Contract Mortgages

They can also help with lending requirements for specific government-backed schemes, including:

• Shared Ownership Mortgages

• Right to Buy Mortgages

When you’re looking for a mortgage solution that might be a bit more complex, you’ll need the help of an experienced mortgage broker who can help prepare your mortgage application and find you the right specialist lender.

That’s where we come in! Our mortgage team thrive on tricky situations. Make an enquiry and we’ll contact you to discuss your circumstances and take a deeper look at what options are available.

What are specialist mortgage lenders?

Specialist lenders and specialist mortgages aren’t as widely known as the big banks and building societies, but they exist to help people who’d otherwise struggle to get a mortgage with a mainstream lender. 

High street banks are more rigid in terms of who they'll lend to, so if you have certain types of bad credit or a more complex income stream (freelancer, contractors etc.) then it's more difficult to get the approval you need.

Anything less than a spotless credit report and a simple 9-5 income can be enough for a high street bank to reject you. That's why so many who are self-employed and people with adverse credit struggle to get a mortgage with the usual banks. A computer sees an unstable income as ‘high risk’, usually making for an automatic “NO”.

Specialist lenders offer bespoke services for people who don't fit the narrow criteria of the high street banks or building societies. They use human underwriters (someone that weighs up the risks associated with lending to you) and assess each application on a case-by-case basis. They look for the story behind the numbers and are set up to deal with applications that aren't straightforward. 

Because they’re more niche, they aren’t usually available directly to you as a borrower. They won’t come up in online comparison sites and your banks won’t tell you about them - they only work through specialist mortgage brokers, like us. 

There’s not a lot of visibility of the specialist mortgage market, so we’re doing something about it.

Are specialist mortgages the same as subprime?

No way! You might be feeling sceptical about getting a mortgage from somewhere that’s not a high street bank, but specialist mortgages are not the same as the old subprime mortgages that caused the 2008 financial crisis. 

Before 2008, mortgage applicants were able to self-certify their own income without any background checks or affordability tests. This meant that people were borrowing WAY more than they could afford. 

Back then, lenders weren’t tightly regulated. They approved lots of mortgages as they expected borrowers who couldn’t pay would simply sell their house at an inflated cost rather than defaulting on their mortgage. But house prices fell, and many people were unable to make repayments. 

Getting a mortgage today is a far different experience. You can’t self-certify your own income, and lenders require a lot of information from you about your financial circumstances. Your affordability will always be thoroughly checked when you apply, and you’ll only get a mortgage if a lender is certain you’ll be fine paying it back. 

So they’re legit?

Absolutely! There’s a big misconception that specialist lenders only cater for people who’ve been irresponsible with their money. But that’s not true. Specialist lenders are regulated in exactly the same way as the high street banks - adhering to strict guidelines set out by the Financial Conduct Authority and the Mortgage Market Review. 

All lenders, whether high street or specialist, will thoroughly ‘stress test’ your ability to pay. They’ll look at hypothetical situations and see if you could still pay your mortgage if something unexpected happened. And as specialists use human underwriters, they’ll be looking even more closely to make sure you’re safe to lend to. 

There’s still a lot of stigma when it comes to credit issues. People can fall into bad credit for a number of reasons, whether it’s job loss, sickness, or even a forgotten parking ticket. This doesn’t mean that they can’t be trusted and should be punished for years to come. Many of our customers have worked tirelessly to turn their lives around and were still rejected from the high street before coming to us. We’re shining a light on specialist lenders and letting more people know that there are other options out there. 

Are specialist lenders more expensive?

The old saying goes “the greater the risk, the greater the reward”. Specialist lenders are willing to lend to those turned away from the high street, and their service is far more tailored and personalised, so their rates reflect this.

For example, most big banks need you to have at least three years’ accounts if you’re self-employed, but many specialist lenders will consider you with one year or even less. That’s a bigger risk to them, so the interest rate will usually be higher. 

Specialist lenders also position themselves as a go-between; a bridge to help people onto the property ladder where the high street would have rejected them. Think of it this way, if your credit score was low right now, you probably wouldn’t qualify for a high street mortgage. But another two years down the line, your credit would improve and so you’d have more options open to you. Specialist lenders provide that opportunity to build a roadmap back to the high street, and so their rates reflect this shorter relationship. 

But just because you need a specialist lender, doesn’t mean you can’t get a competitive deal. Working with an independent mortgage broker like Haysto will not only give you access to these lenders (that you wouldn’t have on your own) but our Mortgage Experts also have great relationships with them. They’ll know which mortgage fits your needs and can put together a fab application.

If you get in touch a member of our mortgage team can explain how our service works in more detail.

How do I find a specialist lender?

Specialist lenders won’t turn up on online comparison sites and your bank isn’t likely to tell you about them. Nearly always, you’ll have to work with a specialist mortgage broker to get access to them. 

A mortgage is a big financial commitment and there’s a huge amount of options and choices in terms of lenders and products. When adding complex financial situations on top of this, most specialist lenders need customers to work with a dedicated mortgage advisor.

A specialist mortgage broker (like us!) uses knowledge and expertise to help customers navigate their way through what can be a confusing process, getting them the right mortgage with the right lender.

Do I really need a mortgage broker?

If you’re confused about your mortgage options and worried about getting accepted, speaking to a specialist mortgage advisor is the best place to start.

Buying a home is probably the biggest purchase that you’ll ever make, so it’s important to fully understand your options, get clear advice, and feel confident you’re getting the right mortgage. If you have any added complexity on top (bad credit or self-employed) then getting expert help is a no-brainer.

A good mortgage broker will ease the stress by taking care of admin tasks like researching mortgages, putting your application together, and dealing with the lender. All these tasks can feel like a full time job if you do it yourself. Brokers live and breathe mortgages, so they’ll know which deals are the right fit for you and how to get the most competitive rates. 

A report from the Financial Conduct Authority showed that 75% of people who took out a mortgage through a broker said they got a better deal than if they were doing it alone. Expert advisors can also help you consider options you’ve not previously thought of, giving you the best chance of becoming a homeowner, whether through a specialist or high street lender.

All our Mortgage Experts are fully qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

Why should I pay for a mortgage broker?

Most brokers will charge for their services. They’ll usually let you know straight away how much they charge and when you’ll need to pay. While it can seem like another cost on top of an already expensive process, using a broker really will save you money in the long run.

While it might be tempting to use an estate agent's in-house broker, they usually have the seller's best interests in mind, rather than yours. A quick sale can take priority over finding the right mortgage for you.

We're not the cheapest, but other brokers can’t do what we do. When you work with Haysto, you’re paying for your Mortgage Expert's time and expertise. The fee you'll pay reflects the complexity of your situation, but working with a specialist saves you far more money in the long run. If we can’t help you, you don’t pay a penny. 

Our team has spent years getting to know specialist lenders - the ones that use human underwriters and treat customers as individuals. Our experts have seen it all and have a proven track record of getting mortgages for people who've only ever heard "NO". Just look at our Trustpilot reviews. We’re worth it.