27 February 2014

AToM = GE Top Volume Producer for 2013!

The mortgage market is a flurry of activity currently and competition in the sector is rife.  Lenders are looking at a variety of ways to sneak ahead of their competitors.  One such example relates to the Help to Buy New Build schemes.  When the scheme was launched, the customer would take a percentage of the property, normally up to 75 per cent.  Customers would put in a 5 per cent deposit and the government would cover the remaining 20 percent as an equity loan, repayable after ten years or on sale of property.  One lender has launched a product that will now allow a remortgage up to the full 95 per cent of the property value to remove their shared equity loan.  This is new to the market and shows an ambition to think outside the box and cater for customers who may otherwise have minimal options at the end of the equity loan period.
Some rates have started to creep up….. over the last week we’ve seen Metro Bank and Accord Mortgages increase selected rates by 0.2% and both Halifax and Santander increased some rates by 0.1%.  Not time to hit the panic buttons just yet, but good to note the movements in the market.   In fact some lenders have actually reduced a selection of rates, so always review the options available across the whole of the market.

Finally, AToM has been recognised as a major contributor to two specialist lenders.  GE Money Home Lending has awarded AToM as their top volume producer for the whole of 2013! Part of the GE Group, they specialise in lending to those who require large loans, over £250k, and to those who may have had a credit issue in the past.  Precise Mortgages, who also lend in the specialist sector, as well as Buy to Lets has confirmed AToM as their top volume producer across all products for the last six months!  Both lenders have a fantastic suite of products and we look forward to continuing to grow with them both.  Have a great weekend!

13 February 2014

Weeks to get an appointment with your Bank?

We have had many mortgage customers approach us who have become frustrated in recent times.  Mainly with two things:  firstly, that some of the local banks or building societies cannot see mortgage customers for a matter of weeks (we heard one was booking four weeks ahead!) and secondly, each appointment often takes well in excess of an hour.  Sadly, for whatever reason, that lender could not offer the customer what they wanted and so they went to another and sat through another hour or so only to find they could also not then offer what was required, and so on.  This is a large consumer commitment to time but without a satisfactory solution.  This is where independent and whole of market brokerages come into their own.  They will be able to offer you access to a number of lenders, including the high street names, if appropriate, and you only need to have one conversation with the same person.  In addition, they should have access to lenders who will manually assess your needs rather than a ‘computer says no’ type scenario, if required.  If I can also ‘plug’ a little, we also have access to a number of limited access lenders and exclusive products not readily available to the wider mortgage market!
With this in mind, we have seen lenders reviewing criteria options over the last few weeks.  For those looking at investing in property to rent out, Buy to Let mortgages are now available with just a 15% deposit.  For those looking to get on the ladder with a small deposit, or even remortgage with little equity in the property, this is now possible right up to 95% of the value of the property.   Some lenders have reviewed options for those wishing to by their council property and Right to Buys seem to be back in fashion.  Shared ownership options (buy part of the property, rent the rest) are also on the increase in both demand and supply, especially on newly built properties.  Finally, the lenders in the specialist sector are catering for many options.  Terms and conditions apply, but whatever the scenario, make sure you review all the options available to you!   

06 February 2014

New regulations from 26th April - MMR

On April 26th 2014, a new regulation will govern the mortgage market entitled the Mortgage Market Review (MMR).  Those who have recently arranged a mortgage will have seen that there is already a vast amount of regulatory paperwork involved in all aspects of the mortgage process.  This will not change.  But the amount of detail involved will increase somewhat.
Affordability has always been a key element when arranging a mortgage.  The MMR takes this a step further in also requiring a lender to predict affordability into the future.  Will any material changes occur in the next five years, how much will you spend on seasonal commitments this year, are you intending to expand your family?  These are just some of the more intrusive questions that are to be explored when budgeting for a mortgage.

Lenders have always stress tested affordability when arranging mortgage loans.  Now it is projecting to ensure the customer will be able to meet all future commitments over the next five years.  Difficult task!
But this also means that from April onwards, what was once an affordable mortgage may suddenly become unaffordable due to the perception the lender has on consumer spending habits, historically and projected for the future.   

The lender has always endeavoured to protect their investment to ensure they can get their money back should a customer not pay the mortgage.  The new rules mean they also now need to report on this to the regulator and confirm all projections and detailed calculations.

Even if a customer has life cover, income protection cover and any other insurances, these monthly payments are deducted from actual income as a monthly expense!  This could have an adverse affect on affordability and despite a lower risk and having been protected for a number of outcomes the customer may not achieve the mortgage despite their commitment to the cause!

Today, it’s about affordability.  From April, the lender is predicting the next five years affordability, risk assessment, future spending behaviours and more.   Whilst you might think you are superb candidate to raise a mortgage to purchase your dream home, the lender is being forced to think and project your assumed ongoing risk and affordability, amongst other considerations, before making their decision on whether to lend to you, or not.