A new 'Retirement Mortgage' for the over 50s

The Buckinghamshire Building Society has launched a new mortgage aimed at borrowers aged 50 and over who have an interest only mortgage but do not wish to sell their property when their current mortgage term expires. 

The Retirement Planning Mortgage has no maximum age and will allow customers to borrow up to 70% of the property value, 40% of which can be on an interest only basis.

Interest rates are calculated based on the borrower’s individual circumstances but are variable in all cases and start from 5.24%.  A minimum property value of £300,000 applies and this product is only available through a handful of distributors, including AToM.   Terms and conditions apply.

We’re hearing that a number of lenders are struggling to get enough qualified mortgage advisers into their branches in time for MMR (Mortgage Market Review) which comes in to effect on 26^th April.  This means that with such shortages on advisers, some borrowers are having to wait as long as a month to see an in-house mortgage adviser.  Remember that ‘whole of market’ mortgage brokerages could possibly offer these lenders products, and quickly, so review your options.
The number of house purchase loans shot up by 33% on an annual basis in February, according to the Council of Mortgage Lenders.  The value of purchase loans in February reached £7.8bn, an increase of 47% from the same time in 2013.   A total of £3.5bn was advanced to remortgage borrowers in the month, up 29.6% from a year earlier.

Finally, The Newcastle Building Society has launched two new 95% loan to value products with no reservation or booking fees.  With rates starting from 5.39% (and a five year fixed at 5.49%), they will not set the world alight, but do present another option to a consumer needing a manual assessment, rather than a tick box high street lender.  At the same time the Mansfield Building society has reduced its 95% loan to value products by 0.5% down to 4.49% but only for those who live in their designated postcode areas.  Slightly restrictive lending!

Have a great Easter break!

New lender launches whilst others restrict lending

I start this week with both good news and bad. The good news is that the mortgage market is really buoyant with business volumes running high. The bad news is that this is causing a number of lenders major servicing problems as they do not have the staff to handle application numbers. This was evidenced last week in an announcement from Cambridge Building Society who advised they would only accept business from their local community for the foreseeable future. Another, Buckinghamshire based Building Society has closed the doors to new business for one month whilst they catch up on their current pipeline. We are aware of other bank lending institutions who are anything up to 14 days behind but who will not go public to the frustration of those customers and their intermediaries looking to work closely with them. So here is a plea to all lenders asking them to come clean with their current position. There is no shame in being open about it and letting us all know what the real delays are helps everyone manage expectations! That said, there is more good news than bad and there are lenders still actively seeking business. We were visited last week by the CEO of one Building Society who asked if we would be able to introduce £10 million of new business during the remainder of the financial year. Their products are good and rates are quite competitive too.

More good news with a new lender hitting the mortgage market today, the first true new entrant for some time! Magellan offers a new service designed for borrowers who have experienced a one-off life event which has resulted in an adverse credit record. Providing applicants can explain and document the reasons for their financial difficulties and can demonstrate they have had a clean credit history for the last 12 months, Magellan Homeloans will consider their application. This fills a gap in the mortgage market and will, I expect, attract a deal of interest. Their products are only available through a limited number of distributors and AToM are pleased to be numbered amongst them.

Finally, it seems that house prices are continuing to rise, particularly in the South east corner of UK. If you are thinking of moving it is probably a very good time to look.