AToM awarded 'Best Residential Mortgage Packager' 2016!

I am delighted to commence this week’s column with the fantastic news that AToM has received a national mortgage lender award!  We have been awarded ‘Best Residential Mortgage Packager’ by the lender Precise Mortgages, for the fifth year in a row!  It’s rare for lenders to issue awards, so this is really special and great recognition. We have a super team at AToM and this award is real credit to the hard work the staff have put in during the recent tough market conditions.

As a Mortgage Packager, not only do we work with the general public, but nationally too with many Accountants, Mortgage Brokers, Independent Financial Advisers and Estate Agents. With over 8,000 registered introducers on our databases, lenders use AToM to offer their mortgage products seeking quick distribution and marketing to all of the above. This often means that we see exclusive deals, new lenders and product innovations, ahead of the general marketplace.  AToM also collates information for the lenders, obtains employer or accountant references, instructs valuations, obtains mortgage offers and in some cases has the lenders own underwriters in our offices, enabling a quicker turnaround.

With this in mind, actually placing a mortgage with a lender is not normally difficult. The hardest part, in the recent climates, is getting the mortgage through to completion! To assist this, try not to give lenders an excuse to decline your application or refuse to lend to you. Try to pay bills on time, don’t miss payments, and especially not mortgage payments!  Any missed (or sometimes late) payments will be registered on your credit file and this is normally used as the basis of a decision to lend to you, or not!  Ensure you disclose everything upfront as lenders hate surprises!  Remember that lenders can re-credit search/credit score you right throughout the whole mortgage process.

So in short, we are a little bit like Doctor Who’s Tardis. The AToM shop front opens onto a business which has much, much more going on behind the scenes!

Buy to Let mortgages in high demand

Buy to Let mortgages seem to be the flavour of the month again.  With the rental market remaining buoyant and showing no signs of declining, lenders are reacting to the huge demand for investment / buy to let properties.  This sector has also experienced a recent mortgage price war and some major criteria changes as lenders seek to attract more of this business type.  Mortgages can be achieved up to 85% of the property value.  But, as with all mortgages, the smaller the deposit, the higher the 'risk' and therefore the higher the rate.

Buy to Let properties will often provide a modest monthly return over and above the mortgage payment.  The additional amount can be used to supplement income, or, with flexible mortgages, can be used to “overpay” the mortgage and reduce the term.   Most lenders in this sector will require the rental income to exceed the mortgage payment by up to 125% and may use a higher stress test rate to calculate this.  Remember that, whatever the deal, lender terms and conditions will always apply and there are no guarantees of continued rental or capital growth.

More generically, many of us will review car insurance, home insurance, gas and electricity suppliers to find the best rate on the market and tell everyone when they have made even a small saving. Given this, it is astounding just how many people  leave their mortgage with their existing supplier and some don't know what rate they are paying!  Most lenders look to attract new customers, but are less likely to offer attractive options to retain them. This, in the main, is due to the different fees and charges that can be added to the new mortgage at the outset. In the current climate, the lenders bottom line tends to be more profitable with new clients, rather than old.  There are many good rate options available currently and most with minimal costs to move. So don’t feel loyal, if a better option is with another lender - think of number one!

Interest Only takes another blow

Over the last few months I’ve mentioned Interest Only quite a bit.  Interest Only is one option to pay your mortgage, but it does exactly as it says, you only pay the interest on the loan.  So at the end of the term, say 25 years, you still owe exactly what you started with.   Normally a savings plan is also set up to build funds over time to match the mortgage amount at the end of the term.

This might be right for certain individuals who have careers that pay out a lump sum after a term, or for someone who gets many bonuses.  But unfortunately, that will no longer be a mortgage option you can get through Nationwide.  They have pulled out of offering Interest Only across their entire range of products.  The country’s biggest Building Society has said that it has taken the decision to remove this option as they were only processing 3% on this type of product.   In the scheme of things, very small and what happened to customer choice? 

The mortgage market is awaiting the imminent final release of the FSAs Mortgage Market Review (MMR) which highlights areas due for change and implementation of stricter rules across the market.  Interest Only was mentioned in the consultation stages, but it does appear that an over-reaction has occurred across the market place with many lenders restricting the amount that could be borrowed on Interest Only and Nationwide’s move could/will lead to others following suit and removing the option entirely.  No one wants to be the last man standing!

There’s no denying that this product has sadly been abused by some across the country in order to keep customers costs down and no suitable repayment vehicle being set up.  However, not all should be tarred with the same brush.  Many customers have reasonably performing endowments and investment returns that will repay any Interest Only mortgages and cause no risk at all, mainly thanks to the advice, recommendation and the brokers ‘knowing their customer’.  

In addition, lenders are consistently writing to all customers on Interest Only to ensure that a suitable repayment plan is in place and those who are no nearer to the end of their term should have sorted alternative arrangements.  Are you one of them?  Act now.

Without doubt this move has sent shockwaves through the industry and if others do follow suit, many customers could simply become mortgage prisoners with nowhere to go.

So much more behind the scenes!

I am delighted to commence this week’s column with the fantastic news that AToM has received another national mortgage industry award! We have been voted the ‘Best Mortgage Packager’ by MYIntroducer.com 2010. These awards are amongst the only ones in the industry truly determined by customer votes. Most awards have a panel of judges who vet and nominate. This is our second award for 2010 already having received the ‘Treating Customers Fairly’ accolade from the Mortgage Finance Gazette. We have a super team at AToM and this award is real credit to the hard work the staff have put in during the recent tough market conditions.

As a Mortgage Packager, AToM sticks out from the crowd somewhat. A Mortgage Packager not only works with the general public, but nationally too with many Accountants, Mortgage Brokers, Independent Financial Advisers and Estate Agents. As a Mortgage Packager, with over 10,000 registered introducers on our databases, lenders use AToM to offer their mortgage products seeking quick distribution and marketing to all of the above. This often means that we see exclusive deals, new lenders and product innovations, ahead of the general marketplace. As a Mortgage Packager, we also collate information for the lenders, obtain employer or accountant references, instruct valuations, obtain mortgage offers and in some cases go right through to requesting funds and instructing completions.

Some of these lenders will work through limited distributions, enabling them to control their business volumes. In other words, it’s up to AToM to identify the cases that may, or may not, fit the lenders criteria quickly and direct them accordingly. As a result, lenders may not need to employ as many staff to man the phones or underwrite cases. Thus containing their costs. Some lenders choose to distribute through just nine sources, of which, thankfully, AToM are one. Others will use preferred Mortgage Packagers to distribute specific tranches of their products, and so on.

So in short, we are a little bit like Doctor Who’s Tardis. The AToM shop front opens onto a business which has much, much more going on behind the scenes!