Near Prime case study: How Atom helped when high street lenders wouldn’t

Our Near Prime mortgages are specially designed to assist those with less-than-perfect or recovering credit to get onto or move up the property ladder. Here’s how our product helped a young family, who had cleared their debt, make buying their “dream home” a reality after years of renting.

Meet the buyers

David, a civil servant, and Stephanie, a regional recruitment manager, are a couple in their thirties, with a young son. They have stable, long-term employment, with a household income of £90,000. After years of renting, they wanted to provide a stable future for the family by buying a house, which would also be an asset they could hand their son in later life.

What was the problem?

After making poor financial decisions back when they were students, the couple had built up a debt of around £22,000 at its peak. They had also incurred some defaults in the process. However, as they got older they were able to be more responsible, clearing their debt in 2019, saving a deposit for a house and improving their credit score.

Unfortunately, despite taking steps to become more financially stable, their previous credit history still meant that high street banks would not consider them for a mortgage, even the bank that they had been with for many years. The defaults on their credit file were not due to be removed until 2027, which meant that they faced extra years having to rent before being accepted for a loan.

Considering the situation, David said: “By the age of 26 and 27, we had good jobs and weren’t taking out any debt, we had been paying it back. We were very different people to the students that wracked up that debt, but continued to be punished for our past.

“The banks won’t look at that wider picture when it comes to credit. We even had a call with our main bank and they wouldn’t even consider us — they said no after just one phone call. Things aren’t always as black and white as what a credit score suggests, and lenders need to recognise that there are people out there who deserve a second chance.”

How did the broker and Atom find a solution?

David and Stephanie found a property in their dream location that was available at a fair price, so they reached out to Marney at Magee Mortgage Solutions in Newtownabbey in the hope that they could secure a mortgage deal with the help of a broker. They explained their situation and were surprised that she said she could help them.

While Marney explained that the defaults on their record meant that high street lenders would not be willing to consider them, she was aware that there were other lenders who were more willing to cater to the needs of those in their scenario.

One of the options that Marney presented was a Near Prime mortgage from Atom bank. She explained that Atom bank doesn’t focus purely on credit scores when evaluating an application, so they would have more wiggle room through a Near Prime mortgage to secure a deal.

David and Stephanie still looked at some of the other specialist lenders on the market, as well as Atom bank, but found that their lending criteria were stricter. This led Marney to be most confident that Atom bank would be the lender most likely to accept them.

What was the result?

The couple took out a Near Prime mortgage of £145,000 with a two-year fixed interest rate and moved into their dream three-bedroom semi-detached home in February this year, putting down a 15% deposit of £25,000.

On getting a mortgage, David said: “After we applied, the rate that we got with Atom was maybe 1.2% higher than what was on the high street at the time.

“While the higher interest rate might scare people off, in reality, it’s not that much more expensive. On paper, it was £75 a month extra, but that was a no-brainer to get on the property ladder three years before we expected to.”

“Marney was fantastic. Had it not been for her knowing the Atom bank Near Prime criteria and putting us forward, we’d have missed out on the property we desperately wanted.”

Speed to offer

Having had an offer in just three days, David was impressed by the speed that their application moved to offer, and the relief that it provided having been turned down so many times before. He said: “The stress of applying is magnified when you have a bad credit file, and this is obviously worse when it takes weeks to hear back.

“We put the application with Atom in assuming it would take a week or two, given the poor credit file. To hear back that in just two or three days that we had a Decision in Principle alleviated so much stress. It gave us confidence and settled our nerves as it’s a scary process and you naturally prepare for the worst. Once the decision came through we got very excited, we had met the criteria!

“Overall, the process was so quick. We spoke to Marney, provided our information, put the application through and it was back in a matter of days.”

App experience

David praised the Atom bank app during the application process. He said: “It’s fantastic. You get access to the app very early on in the application and it breaks the timeline down into what’s being done, what stage you’re at and what’s coming next.

“Often people are left in the dark. They don’t know what the lender is doing, so there’s a lot of uncertainty. However the Atom app keeps you in the loop and helps massively when you’re having a discussion with your broker about next steps.”

He also found the app useful in tracking payments after completion: “Once you have a mortgage it tells you your essential information. I can open at any time and I can clearly see what my next payment will be and what the interest rate is. I love it.”

Possibility of moving to a Prime mortgage

Unlike many lenders, if a customers’ credit situation improves over the course of the mortgage, Atom will look to move its Near Prime customers on to a Prime mortgage when their fixed rate ends should they meet the criteria.

David commented: “That’s a great option to have. We’re on a two year fixed rate, so hopefully we’ll be able to move onto a Prime product with a better rate when it ends.”

If you’re in a similar position to David and Stephanie, with less-than-perfect or improving credit, our Near Prime mortgages might be just what you need.

Head to our Near Prime page to search for a broker who works with us, or, speak to your current broker about our products.

You may also wish to check out our wider range of mortgage products to find one.