Fitting criteria is the key to unlocking lenders appetite

Lenders want to lend, but in some cases are not able to, even to existing customers!  Those who already have a mortgage, but took out their original loan before April 2014 (Mortgage market Review!) may not pass the same lenders new criteria.  Reasons can include, original borrowing on a multiple of income, age, small equity levels in property. Lending rules have changed dramatically and more stringent measures are in place, as well as tougher reporting to the regulator. Lenders have to be sure the customer can afford their mortgage for a number of years ahead and stress test against possible rate rises. Seek professional advice if you are concerned or are looking for an alternative lender as some might be considered to be hiding behind the rules!

I was surprised to see that an increase in housing supply has led to two-thirds of homes selling for less than their asking price in July according to the National Association of Estate Agents. They report an 11% increase in the average number of properties for sale per branch last month from 46 to 51, the biggest increase seen in three years. However, increasing supply and declining buyer registrations (possibly as a result of the above restrictive mortgage options) resulted in around 66% of homes sold last month failing to meet their asking price. 

Products though continue to increase and one of the fastest growth markets seems to be in the Ex-Pat sector. A British Ex-Pat in good employment is favoured by a growing number of lenders who are willing to provide a mortgage to help them obtain a Buy to Let property in UK. The rules are tight but there are lenders who will advance up to 75% of the property value. Incomes usually need to be from a recognised multi-national business abroad and in a region upwards of £50000 sterling equivalent. A couple of lenders will also allow Ex-Pats to own a residential property in UK and where their family, usually off-spring, will reside pending their return to UK.   

We are finding that criteria is the key to unlocking lenders appetite and you will not find this on most, if any, of the popular web-site offerings. Talk to your local professional mortgage adviser who will know how to access this important information quickly for you.

Know what's right..

You may have noticed that I have not had a rant for a while, but as it appears that some underhand activity appears to be starting up again I feel obliged to highlight these to both sellers and purchasers alike.

We have had customers approach us recently advising that, when they are ready to make an offer on a property, the Estate Agent has refused to forward the offer to the vendor unless the proposed purchaser obtain their mortgage facilities via the Agents own internal mortgage consultant!

This is not good for so many reasons including the main, it’s wrong! In addition, the vendor wants to sell the property and is not really concerned about which provider arranges the mortgage for their purchaser!

No one is disputing that the proposed purchaser must prove their ability to obtain finance, where applicable. Nor do I argue with the selling Agent’s right to offer their services, as competition is a healthy thing. However, the purchaser must retain the right to decide for themselves who provides their mortgage finance.

The National Association of Estate Agents (NAEA) is the UK's leading professional body for Estate Agents. Most of the independent Agents in Horsham are registered with the body and adhere to the code of conduct - The Property Ombudsman Code of Practice for Residential Sales. Section 6 states:

By law you must not discriminate, or threaten to discriminate, against a prospective buyer of the seller’s property because that person declines to accept that you will (directly or indirectly) provide services to them. Discrimination includes – but is not limited to – the following: - making it a condition that the person wanting to buy the property must use any other service provided by you or anyone else - failing to tell the seller of an offer to buy the property.

Purchasing a home is probably the largest monetary event you will ever incur and you need to be 100% happy in all aspects of the whole transaction. For more information, go to www.naea.co.uk and see if the Agent you are looking to use is subscribing to adhere to these rules and regulations.

Finally, beware, as not all Estate Agents internal mortgage consultants can offer ‘whole of market’ mortgages. Make sure you ask the question! If you’re not being offered ‘whole of market’ and instead are being offered mortgage products from a ‘limited panel of lenders’, you may be missing out on the best product available to you.