Positive news for the Self Employed and also Ex-Pats!

The self employed have had a good week on the mortgage side.  Specialist lender, Precise Mortgages has changed criteria and will now allow customers to use just last years accounting figures as income for a mortgage.  Previously the lender, and most lenders, would look at two or three years figures and average over the period.  However, whether the customer has been trading one year, or twenty, the lender will now work on just the last years figures.  This is available right up to 85% of the property value and only via a small and select number of companies, including AToM. 

A number of lenders have joined the current price rate war over the last few days.   Metro Bank, Virgin Money and Leeds Building Society joined a number of other lenders who have cut rates substantially.  We even saw a six year fixed rate launched, under 3% interest rate, but sadly this was only available for three days before being withdrawn  - probably due to huge demand 

Others have also launched short term availability schemes. Accord Mortgages have launched a '10 day sale' on some of their products covering both their Residential and Buy to Let schemes.  These include lower lender fees, enhanced cash backs and low fixed rates options.  But be advised that these products will require your mortgage adviser to submit a full application before midnight on 1st October!  Terms and conditions apply, etc.

Finally, we are delighted to be one of only seven companies in the UK who can offer a new product range aimed at Ex-Patriots from Skipton International.  For UK Nationals  living abroad, looking to buy or remortgage an investment property in England and Wales, up to 75% of the property value, Skipton International will consider lending up to £1.5m with rates starting below 4% and no lender arrangement fee (for a limited time).  This really is a superb offering and if you know someone who may fit this criteria, please get them to contact us to find out more!         

The market is seeing a 'rate price war'!

It's always good to see a lender reduce their rates.  Over the past few days, a number of lenders have taken action and cut a number of rate offerings.  Some examples include Accord Mortgages who reduced some rates on selected fixed rates by up to 0.40%, Woolwich sliced a life time tracker rate by a huge 0.76% and other selected rates by up to 0.50%, the Halifax took 0.3% off some rates and the Coventry Building Society reduced some fixed rates by 0.20%.   All good news for the end consumer and might be a good time to look around if you are considering making changes to your mortgage.

The Ex Pat market is awash with enquiries from those living overseas looking to purchase back in the UK, in the main for a property to rent out.  Although it is a restricted market in terms of lender appetite, there are a number of specialist lenders who will consider, depending on the country of residence and nature of employment, with loans of up to 80% of the property value.   Normally a minimum valuation amount will be required, circa £150k and a minimum loan of £100k.   Most lenders will also require customers to be property owners in the UK or have had a mortgage within the last three years.

Finally, August has been a flurry of activity and caught many of us out, which is a pleasant and great surprise!  Of those approaching AToM, many are seeking straight forward simple human assistance having become confused by the huge amount of information currently available on the internet, or they've been turned away from the normal high street lender for no apparent reason, apart from maybe being told 'credit score'.  The majority are after the superb low rates currently available and also speed.  Many high street lender products are available through mortgage brokers and can often be dealt with much more quickly than with the lender directly.  But do also remember that lenders are incurring huge delays with processing and underwriting at the back end.  In addition, August’s great business volumes won’t have helped clear the back logs! 

The Mortgage event of the Year...

The great and the good of the industry descended upon London’s ExCel last week for the annual Mortgage Business Expo.   Around 70 exhibitors offered their wares to mortgage brokers, intermediaries, financial advisers, solicitors and others who attended the largest trade mortgage event in the calendar. 

The two day extravaganza was well received in its new venue (previously Olympia) and despite the slightly longer journey, attendees enjoyed the fantastic facilities available at the gigantic centre.

Big players such as Nationwide, Virgin Money and Halifax had their latest products and rates on offer which were well received especially as most have recently been reduced.  However, noticeable absentees included Barclays, Natwest and Santander, leaving a rather large gap from the high street contingent.

This left room for the smaller, lesser known lenders to promote their offerings.  They may not be processing the volume of cases like the high street lenders, but they have a huge appetite to lend and offer niche products to cater for a variety of customer profiles.

Thriving areas also included short term funders/lenders specialising in Bridging Finance and a number of Commercial lenders were also in attendance as funding becomes somewhat more available to businesses.

Our trade association AMI (Association of Mortgage Intermediaries) held numerous seminars covering various issues including Mortgage Market updates and it’s estimated that over 1,750 people attended the two days.  Well done to the organisers!

AToM were the only Specialist Mortgage Packager/Distributor onsite who offered all areas of the mortgage finance sector.   If you follow us on twitter, you will see our stand (@atommortgages).

For those who don’t know AToM, we have a shop front in the Carfax, Horsham.  But we also process cases for lenders via exclusive products and to a database of over 8,000 mortgage brokers, intermediaries and IFAs.   In short, we are a one stop shop catering for all types of people whether it be a straight forward and clean credit history application, right through to complex deals needing a manual assessment on a product exclusive only available via AToM.  As the name suggests, All Types of Mortgages!  So why not give us a try!

2012 - a year for Specialists

A very Happy New Year to you all! Let’s hope 2012 brings us all something to be upbeat about! Although lending volumes are predicted to remain much the same as in 2011, I do predict that the mix will change slightly. We will see more specialist lenders offering products aimed at specific types of customers. This is a good thing as this will help those who may not currently be able to get a mortgage such as those with multiple incomes from various sources, those who have had financial issues, those looking to buy their Local Authority houses, and so on. Lenders may also consider more complex scenarios working on an individual basis and pricing.

The cost of borrowing funds between lenders has risen over the last few months and as such, the cost of fixed rate monies has risen. Remember, these rates are calculated on a different basis to tracker rates. In the main, the former is based on SWAP rates, the latter on Bank of England base rate. With the Euro Zone issues still hanging over all of us, the cost of borrowing funds between lenders was always likely to rise. However, some experts predict that the cost of fixed rates monies is unlikely to decrease again once risen. Back to wishing I had a crystal
ball!

Lenders have already started adjusting their product offerings. Coventry Building Society is the first to pull all of their products! At the time of writing, I have not seen the new products to be launched, so cannot comment specifically. However, lenders product withdrawals pre Christmas all resulted in higher rates. Will they follow suit, or maybe set the trend for attracting business in the ‘January Sales’?

The Nationwide House Price Index suggests that house prices declined by 0.2% in December, but
increased by 1% in 2011 as a whole. The price of a typical home is now £163,822. London saw the strongest growth in 2011 (5.5%), but less regional variation in house prices compared with previous years. The South East saw an annual growth of circa 2%.

Finally, AToM had a very good final quarter to 2011 and were pleasantly surprised at how busy we were between Christmas and New Year. Hopefully, this is a sign of good times ahead and a positive 2012 for us all.

Complex Mortgages are not frowned upon these days!

Some while ago, I mentioned that AToM had re-launched its ‘Complex Prime’ proposition. Complex Prime looks at mortgage applications which, for whatever reason, do not fit the normal high street credit scoring/tick box mentality or need something of a more complex underwriting nature.

A recent example we came across was a young chap at the age of 76. Obviously well into retirement and enjoying a pension of around £75k per annum. Very nice! He wanted to move properties and needed a loan of around £150k to purchase a property valued at £700k. Because of his age many lenders had turned him away. And because he, according to many lenders, had no ‘earned’ income, found most doors shut. However, we were able to offer a mortgage over a 10 year term on a Capital Repayment basis, on the understanding that his wife would receive 60% of his pension income, should the unfortunate happen to the husband. The rates were competitive and fees attractive.

Another example was a gentleman looking to re-mortgage a holiday home that was only allowed to be let out for 11 months of the year. Many lenders prefer second properties to be let out on an Assured Shorthold Tenancy agreement, usually contracted for 6 months at a time and renewable. However, with holiday lets, the agreements tend to be weekly. So, again, the lenders available were restricted, but we managed to place with a small building society offering attractive rates and fees.

Other examples include applicants with no credit: too much credit: a desire to pay up front or add additional security in the form of another property increasing their ability to borrow more.

These are just some of the benefits of using an independent mortgage brokerage and especially if they are ‘whole of market’, and who can deal with any lender and are not restricted to a panel of lenders.

AToM now has seven lenders on its Complex Prime panel already looking exclusively at these scenarios, with other lenders shortly to join. These lenders may not be household names, but you’ll probably find they are extremely helpful and will look at most scenarios, manually, with no credit scoring and have an appetite to lend!