Exclusively through AToM - Packaging!

It’s been a really busy few
weeks at AToM HQ. For those regular
readers, you will know that AToM does not only arrange mortgages for the
general public who visit the shop front, but we are also a specialist packager/distributor
dealing with mortgage brokers, estate agents and independent financial advisers
nationally. For some lenders, AToM acts
as the administration arm, collating information, instructing valuation and
processing applications right up to mortgage offer status. For other lenders, AToM will be allocated a
tranche of funds to lend on their behalf and AToM advertises them and controls
the administration process. Any mortgage
broker, independent financial adviser or similar, who require these certain products,
will often have to come via AToM to gain access to such products.

One recent example is from a
company called Precise Mortgages. They
have launched a product aimed at the ‘Near Prime’ sector, and this means those
who have had some financial issues in the past.
Their normal core range is available up to 80% of the property value,
but via AToM, customers can achieve 85%.
This is totally exclusive.
The benefit to the lender is that AToM carry out all the work, including taking
telephone calls, requesting information from employers/accountants, collating
documentation, and more. So it’s cost
effective for the lender. In return,
AToM gets ‘almost’ guaranteed business.
A great two way relationship! As
the saying goes, it’s amazing what happens behind closed doors!

Finally, according to
unbiased.co.uk, and since the inception of the credit crunch, there are
approximately 46% of all mortgage borrowers who have failed to review their
mortgage to see if they can get a better deal!
This seems crazy on the face of it unless you are one of the lucky ones
with a rate including just a small margin over the base rate. If you are on a
lenders standard variable rate and this is more than 4% you might be missing a
valuable trick, and the opportunity to fix to avoid the potential pain when,
eventually, rates do start to rise. Seek
independent advice – you are unlikely to regret it. Even if the advice is to stay put!

The Process!

The mortgage process, regardless of whether you are a first time buyer, home mover or simply re-mortgaging, will be roughly the same. On any new purchase, the selling agent will seek to agree a number of deadlines with you, including the arrangement of mortgage finance.

At this point you should make sure that you speak to an independent mortgage brokerage who will assess your overall financial position and discuss your mortgage requirements with you. They are required to provide you with an Initial Disclosure Document detailing who they are; who regulates them; their scope of permissions; whether they use a restricted lender panel or ‘whole of market’; any fees and costs involved including any charged for advice or consultation. This document also advises how to complain if you are unhappy (now or in the future) with the advice provided.

A good advisor will complete a financial fact find ensuring that they fully ‘know their client' and fully understand their client’s financial position and requirements.’ This is necessary before any ‘advice or recommendation’ can be provided. Be patient as this process can be lengthy. It is in your best interests however, ensuring that you receive the best possible advice designed to meet your personal mortgage needs and requirements.

Once you’ve agreed the best mortgage for you, matching your financial needs and aspirations, a decision in principle (DIP) will be completed, usually on-line with the chosen lender. This involves brief personal details, income disclosure and a credit search. Be wary here as too many credit searches will have a negative effect on your credit score. Ensure that the product and lender are right for you before a DIP is conducted.

DIP decisions are often instantaneous. Assuming success, it is then upgraded to full application. Payment for valuation is made (sometimes free) and the valuer confirms to the lender if, in their opinion, the property is suitable security for mortgage purposes. A more detailed in-depth survey (homebuyers report) can be arranged at the same time, but for a slightly higher cost. That said, for older properties it should be considered a worthwhile investment as it could save you thousands in the long run.

The chosen lender will require information on income, identity, proof of residency as part of their due diligence requirements. Assuming no issues arise, a mortgage offer should now be issued. Then, subject to the solicitor’s conveyancing process, you are on the road to completion and, if it is a purchase, you should soon pick up the keys to your new home!

New 95% Loan to Value aimed at First Timers

First Time Buyers have received more attention this week with The Hanley Economic Building Society being the latest to offer an attractive product to this sector.  At 95% of the property value and with a 3 year discounted rate of 4.75% (5.3% APR) and a fee of just £99 upfront and £400 on completion, this is a bold attempt from the lender to attract first timers.  Only six distributors in the UK have access to this product (AToM are one!) and I suspect funds will be utilised on this product pretty quickly for those with just a 5% deposit!  Well done The Hanley!

Leeds Building Society have also been busy in the products department and launched a 1.99% (4.5% APR) fixed rate for two years for purchase or remortgage.  They will lend up to 70% of the property value and will charge a £199 booking fee upfront and £1,800 completion fee. 

On both these products, redemption penalties will apply during the product period and terms and conditions apply!

In other news, according to creditaction, Rightmove has said new sellers raised average asking prices by 0.7% (£1,596) to an average of £233,139 in September. Prices rose 1.5% compared to September 2010.

House purchase approvals (35,226) were higher in August than in July according to the British Bankers Association, and 14% higher than in August 2010. The average loan approved for house purchase in August was £145,500 which is 1% higher than a year ago.

A moneysupermarket.com survey has found that 27% of Brits currently spend over 40% of their wages on paying off non-mortgage debt. The figures show that the average person pays off £322 every month, which is equivalent to a quarter of the average monthly income for a UK adult (currently £1,288). Even more strikingly, 8% of people say that they spend over 80% of their wages on repaying debt.

And finally, a study by Endsleigh suggests that twice as many people living in the UK are renting (45%) compared to those owning their own home (23%). Middlesex is the most popular area, with over three times as many renters (51%) as buyers (16%). It is closely followed by East Sussex (48%), Surrey (46%) and Berkshire (46%) – all of the top 10 regions for renting are in the South.  According to Endsleigh, 62% of renters intend to buy a property in the next five years.