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!
18 March 2011
....then we had a budget!
Outside AToM HQ, in the Carfax, we have a distribution box for the WSCT ‘Property Today’ pages. These have been taken in huge numbers over the last few weeks, which give us the impression that people are looking for properties or are monitoring house prices. It’s also been a very busy few weeks in the mortgage market, with rates fluctuating and lenders appearing to be actively lending. Many financial institutions recorded a great month for new business in February, for both purchase and remortgage applications.
Any perceived mini-recovery could possibly stall though, as we approach the forthcoming budget from Chancellor George Osborne.
The pundits have been hard at work trying to predict what the outcome will be and it is a fact that, like it or not, the Government is still faced with a huge task in getting the country back on track financially.
Figures from creditaction for March report:
- £120,660,000 is the interest the Government has to pay each day on the UK’s net debt of £2,244.2bn (which includes financial interventions).
- 212 mortgage possession claims will be issued and 163 mortgage possession orders will be made today
- 337 people every day of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 59 seconds during a working day.
- 1,603 Consumer County Court Judgements (CCJ's) were issued every day during Q4 2010 and the average judgement amount was £3,245.
Mortgage lenders took 7,900 properties into possession in Q4 2010 according to the Council of Mortgage Lenders. This equates to 87 properties being repossessed every day. In terms of payment difficulties, 169,600 mortgages ended Q4 2010 with arrears equivalent to at least 2.5% of the outstanding mortgage balance.
There are more credit cards in the UK than people according to the UK Payments Council.
The typical first-time buyer deposit in December was 23% (£35,020).
Yes, some of these figures make for grim reading, but they give an idea of the pressures the Government has to deal with in the upcoming budget and balancing the already fragile economy with the impact they will present.
Any perceived mini-recovery could possibly stall though, as we approach the forthcoming budget from Chancellor George Osborne.
The pundits have been hard at work trying to predict what the outcome will be and it is a fact that, like it or not, the Government is still faced with a huge task in getting the country back on track financially.
Figures from creditaction for March report:
- £120,660,000 is the interest the Government has to pay each day on the UK’s net debt of £2,244.2bn (which includes financial interventions).
- 212 mortgage possession claims will be issued and 163 mortgage possession orders will be made today
- 337 people every day of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 59 seconds during a working day.
- 1,603 Consumer County Court Judgements (CCJ's) were issued every day during Q4 2010 and the average judgement amount was £3,245.
Mortgage lenders took 7,900 properties into possession in Q4 2010 according to the Council of Mortgage Lenders. This equates to 87 properties being repossessed every day. In terms of payment difficulties, 169,600 mortgages ended Q4 2010 with arrears equivalent to at least 2.5% of the outstanding mortgage balance.
There are more credit cards in the UK than people according to the UK Payments Council.
The typical first-time buyer deposit in December was 23% (£35,020).
Yes, some of these figures make for grim reading, but they give an idea of the pressures the Government has to deal with in the upcoming budget and balancing the already fragile economy with the impact they will present.
11 March 2011
Why use a Mortgage Broker?
There are many mortgage lenders actively looking to increase their volume business by offering superb products and rates, but there’s also some who have good PR companies who portray a positive lending attitude.
You would think in the current climates, with mortgage volumes reasonably low, that new applications submitted to lenders would fly through and come to a quick and easy completion. Unfortunately, in some cases, it’s not so.
These are the daily trials and tribulations of dealing with some major mortgage lenders who simply do not appear to want to lend.
We’ve heard many stories recently from customers who have initially gone direct to a high street lender, but then wished they had not! Should your application meet all the requirements and the lender has no further questions or requirements, then a mortgage offer should be quickly produced.
However, if, for whatever reason, a lenders underwriter decides to request one further bit of information, or needs additional clarification, then the fun begins.
You may receive a call or an automated email detailing additional requirements and once you’ve provided the information, you enter a service standard queue (usually 48 hours) and assuming of course that the information returned does not get lost and is directed to the right department! Should the lenders underwriter decide they are happy with the additional information, your application may proceed. But, the new information provided could provoke further questions or requirements, and so the cycle begins again!
They say buying a house is the second most stressful event in your life after having children. I’d say that it’s nearly on level par in the current market conditions.
What this all demonstrates is the value of dealing with a specialist independent mortgage brokerage as we will take this painful flack on your behalf. In most cases, we will have a relationship with the lender, understand their requirements and ensure all the correct information is submitted from day one. There really is no better time to utilise the expertise and staffing levels we can provide for you. Let us take the strain on your behalf to push the mortgage through to an early completion. And, if a lender does decline to proceed, we can quickly try to find an alternative lender to suit your requirements, with the minimal of fuss.
You would think in the current climates, with mortgage volumes reasonably low, that new applications submitted to lenders would fly through and come to a quick and easy completion. Unfortunately, in some cases, it’s not so.
These are the daily trials and tribulations of dealing with some major mortgage lenders who simply do not appear to want to lend.
We’ve heard many stories recently from customers who have initially gone direct to a high street lender, but then wished they had not! Should your application meet all the requirements and the lender has no further questions or requirements, then a mortgage offer should be quickly produced.
However, if, for whatever reason, a lenders underwriter decides to request one further bit of information, or needs additional clarification, then the fun begins.
You may receive a call or an automated email detailing additional requirements and once you’ve provided the information, you enter a service standard queue (usually 48 hours) and assuming of course that the information returned does not get lost and is directed to the right department! Should the lenders underwriter decide they are happy with the additional information, your application may proceed. But, the new information provided could provoke further questions or requirements, and so the cycle begins again!
They say buying a house is the second most stressful event in your life after having children. I’d say that it’s nearly on level par in the current market conditions.
What this all demonstrates is the value of dealing with a specialist independent mortgage brokerage as we will take this painful flack on your behalf. In most cases, we will have a relationship with the lender, understand their requirements and ensure all the correct information is submitted from day one. There really is no better time to utilise the expertise and staffing levels we can provide for you. Let us take the strain on your behalf to push the mortgage through to an early completion. And, if a lender does decline to proceed, we can quickly try to find an alternative lender to suit your requirements, with the minimal of fuss.
04 March 2011
Fantastic February!
The Bank of England’s January lending figures report that the number of remortgages rose to 33,498. This is nearly 10% above the six month average. These statistics suggest an increasing wariness of future mortgage rates and in addition, the fact that fixed rate mortgage interest rates were relatively low in January.
Mortgages for property purchases also increased, to 45,723, slightly below the six month average of 46,686. Total lending to individuals increased by £1.5bn.
I suspect these figures to be vastly different for February as some lenders increased fixed rates due to the fluctuation in the money markets and many customers will have raced to secure low rates before they were withdrawn.
Nationwide has reported that house prices increased by 0.3% in February with the average UK house price now standing at £161k. This is 0.1% lower than this time last year. The lack of first time buyers and easily accessible mortgages are still major factors with regards to prices and activity in the housing market.
AToM had a fantastic February for new business received. Applications were up 68% compared to February 2010 and resulted in our best month since June 2009 for new business. This was mainly due to our top four lenders – GE Money, who offer mortgages to the employed with some allowance for previous credit problems. Bank of China, who had a market leading lifetime tracker rate residential mortgage (they also cater for Buy to Lets). Platform (part of the Co-operative Bank Plc) who are actively lending in the Buy to Let market, with small arrangement fees. And AToM’s “Complex Prime”, a number of funders who look to assist those who have been declined by the high street lenders credit scoring systems for no apparent reason. This could include not being on the voters role, having to little (or too much) credit, securing a charge on more than one property, lending into retirement and many other reasons. Whatever your mortgage requirements, speak to an independent mortgage adviser!
Mortgages for property purchases also increased, to 45,723, slightly below the six month average of 46,686. Total lending to individuals increased by £1.5bn.
I suspect these figures to be vastly different for February as some lenders increased fixed rates due to the fluctuation in the money markets and many customers will have raced to secure low rates before they were withdrawn.
Nationwide has reported that house prices increased by 0.3% in February with the average UK house price now standing at £161k. This is 0.1% lower than this time last year. The lack of first time buyers and easily accessible mortgages are still major factors with regards to prices and activity in the housing market.
AToM had a fantastic February for new business received. Applications were up 68% compared to February 2010 and resulted in our best month since June 2009 for new business. This was mainly due to our top four lenders – GE Money, who offer mortgages to the employed with some allowance for previous credit problems. Bank of China, who had a market leading lifetime tracker rate residential mortgage (they also cater for Buy to Lets). Platform (part of the Co-operative Bank Plc) who are actively lending in the Buy to Let market, with small arrangement fees. And AToM’s “Complex Prime”, a number of funders who look to assist those who have been declined by the high street lenders credit scoring systems for no apparent reason. This could include not being on the voters role, having to little (or too much) credit, securing a charge on more than one property, lending into retirement and many other reasons. Whatever your mortgage requirements, speak to an independent mortgage adviser!
25 February 2011
Fixed rates are on the up!
The mortgage market has been very volatile over the last few days and the cost of fixed rate monies (SWAP Rates) have increased rapidly. This has meant many lenders have withdrawn products with little notice and subsequently increased their rates. The most notable being Nationwide who increased fixed rates by 0.30%. Others are expected to follow suit.
So it begs the question, if fixed rates are on the increase and inflation is on its way to an estimated 5% (was 4% in January), when will the Bank of England increase its base rate? The pressure is certainly on to contain inflation and avoid larger and more damaging rate rises in the future. The pundits had previously predicted a rise in May; however, this could now be bought forward. One member of the MPC (monetary policy committee) has even suggested this week that there should be an immediate small rise. Keep an eye on the press, but if you’re looking to change your mortgage onto a fixed rate, don’t delay!
The Financial Services Authority (FSA) has been flexing their muscles with lenders recently. DB Mortgages, part of the Deutsche Bank Group have been fined £840k for irresponsible lending practices and unfair treatment of those who fell in to arrears. DB Mortgages specialised in the sub prime arena offering mortgages to customers who had CCJ's, Defaults, etc. It is understood that £1.5m has been put aside for customers redress. Despite the sub prime lender crash of 2006/7 (lenders effectively withdrew entirely from assisting those with financial issues), there are lenders today actively lending in this arena assisting those with credit impairments (albeit with stricter lending regulations than in 2007!).
Finally, if you are a Halifax mortgage holder, and took a mortgage between September 2004 and September 2007 via their Bank of Scotland brand, you might be interested to note that Lloyds Banking Group, their parent company, is making a provision of £500m for goodwill payments in relation to an agreement with the FSA over wording that could have caused confusion in mortgage offers sent out during this period. I won’t go in to the specific details but suffice to say you don’t need to do anything as, from April, they will be contacting over 600,000 customers who may have been affected.
So it begs the question, if fixed rates are on the increase and inflation is on its way to an estimated 5% (was 4% in January), when will the Bank of England increase its base rate? The pressure is certainly on to contain inflation and avoid larger and more damaging rate rises in the future. The pundits had previously predicted a rise in May; however, this could now be bought forward. One member of the MPC (monetary policy committee) has even suggested this week that there should be an immediate small rise. Keep an eye on the press, but if you’re looking to change your mortgage onto a fixed rate, don’t delay!
The Financial Services Authority (FSA) has been flexing their muscles with lenders recently. DB Mortgages, part of the Deutsche Bank Group have been fined £840k for irresponsible lending practices and unfair treatment of those who fell in to arrears. DB Mortgages specialised in the sub prime arena offering mortgages to customers who had CCJ's, Defaults, etc. It is understood that £1.5m has been put aside for customers redress. Despite the sub prime lender crash of 2006/7 (lenders effectively withdrew entirely from assisting those with financial issues), there are lenders today actively lending in this arena assisting those with credit impairments (albeit with stricter lending regulations than in 2007!).
Finally, if you are a Halifax mortgage holder, and took a mortgage between September 2004 and September 2007 via their Bank of Scotland brand, you might be interested to note that Lloyds Banking Group, their parent company, is making a provision of £500m for goodwill payments in relation to an agreement with the FSA over wording that could have caused confusion in mortgage offers sent out during this period. I won’t go in to the specific details but suffice to say you don’t need to do anything as, from April, they will be contacting over 600,000 customers who may have been affected.
18 February 2011
Still tough for First Time Buyers...or is it?
First Time Buyers are hitting the press again, with reports from rightmove.co.uk suggesting that first timers now account for less than a quarter of all potential house purchases in the UK.
However, lenders are beginning to take on this problem. Many are launching products specifically aimed at First Time Buyers and some of the major builders are also looking at ways to get people on to the property ladder. Even the government has recognised that there is an issue and is holding talks with Lenders, Builders and other industry leaders this week to try and find a solution. Although, with the recent major financial cuts across the country, one wonders how this area might be financially supported.
First Time Buyers will usually require a minimum 10% deposit. Some lenders will allow a 5% builders deposit, but this must be confirmed as a gift and non repayable. Some lenders will allow the deposit to come as a gift from the Bank of Mum and Dad, again as long as it is confirmed this is non repayable.
Rates have reduced lately, with the likes of Santander, NatWest, and a few others lowering interest rates on their 90% products in a bid to assist. However, you are still looking circa 6% interest rates for a fixed rate and most lenders now require the mortgage repayment method to be capital and interest, rather than just interest only for those borrowing more than 75% of the property value.
Some lenders will allow a loan of up to 95% of the property value, if parents or another immediate family member will act as guarantor. Those guaranteeing, in the main, will need to show evidence of affordability for both their current residential mortgage and the one they are intending to guarantor.
Even some Building Societies are offering 90% loans, with possibly higher levels to existing long term account holders. Customers, in the main, need to be located near to the branch of the lender. Variable and tracker rates are also being offered (circa 4.5%) depending on the lender. Income multiples tend to be slightly restrictive though with some offering 2.50 to 3 x joint income, or up to 3.75 x single income. However, they are showing a willingness to assist First Time Buyers and in the current market, that can only be a good thing.
However, lenders are beginning to take on this problem. Many are launching products specifically aimed at First Time Buyers and some of the major builders are also looking at ways to get people on to the property ladder. Even the government has recognised that there is an issue and is holding talks with Lenders, Builders and other industry leaders this week to try and find a solution. Although, with the recent major financial cuts across the country, one wonders how this area might be financially supported.
First Time Buyers will usually require a minimum 10% deposit. Some lenders will allow a 5% builders deposit, but this must be confirmed as a gift and non repayable. Some lenders will allow the deposit to come as a gift from the Bank of Mum and Dad, again as long as it is confirmed this is non repayable.
Rates have reduced lately, with the likes of Santander, NatWest, and a few others lowering interest rates on their 90% products in a bid to assist. However, you are still looking circa 6% interest rates for a fixed rate and most lenders now require the mortgage repayment method to be capital and interest, rather than just interest only for those borrowing more than 75% of the property value.
Some lenders will allow a loan of up to 95% of the property value, if parents or another immediate family member will act as guarantor. Those guaranteeing, in the main, will need to show evidence of affordability for both their current residential mortgage and the one they are intending to guarantor.
Even some Building Societies are offering 90% loans, with possibly higher levels to existing long term account holders. Customers, in the main, need to be located near to the branch of the lender. Variable and tracker rates are also being offered (circa 4.5%) depending on the lender. Income multiples tend to be slightly restrictive though with some offering 2.50 to 3 x joint income, or up to 3.75 x single income. However, they are showing a willingness to assist First Time Buyers and in the current market, that can only be a good thing.
11 February 2011
Buy to Let increased to 85% LTV
Kensington mortgages have launched an 85% loan to value product for Buy to Lets (investment properties for letting out). They will consider First Time Buyers looking to become first time landlords and now also allow applications on new build flats. Good niches and a bold statement of intent to lend! They are currently the only lender requiring a 15% deposit for Buy to Lets, but I expect others will follow suit shortly.
I was astounded to see recent figures from creditaction reporting that Banks and Building Societies had written off £9.9bn of loans to individuals over the last 12 months (end of Q3 2010). That’s nearly £20m a day! In addition, the Government is paying a jaw dropping £120m a day in interest alone on the UK’s net debt (£889bn excluding financial interventions). These are scary figures indeed. But to add to the reality, individuals currently owe more than the entire country has produced during the last four quarters. It’s therefore no wonder that the lending market is in the state it’s in and provides some understanding in to the pressures facing the Government and Bank of England when considering rate changes.
As I write this article a few days before the paper is printed, I am unable to comment on this week’s Monetary Policy Committee (MPC) decision on whether or not to increase the Bank Base Rate. However, out of the nine MPC members for January, two voted for an increase. This is an increase on previous months and we may not be too far away from seeing a rate increase. Some estimates suggest May.
Finally, there has been speculation in the financial press lately regarding the Mortgage Market Review (MMR) which is an FSA initiative to make, in their words, the mortgage market more professional and transparent. Much of this, together with another of their initiatives is the Regulatory Distribution Review (RDR) part of which is designed to encourage our sector towards a fee charging route in all financial advice areas whereas, today, most income for advisors is from introductory fees incorporated in the product sold, paid by the providing financial institution. Watch this space in months to come but it seems fair in many ways that, given the professional qualifications mortgage advisors now need to obtain to give advice, a fee reward is not unreasonable for the amount of work and research undertaken in advising and recommending a mortgage product.
I was astounded to see recent figures from creditaction reporting that Banks and Building Societies had written off £9.9bn of loans to individuals over the last 12 months (end of Q3 2010). That’s nearly £20m a day! In addition, the Government is paying a jaw dropping £120m a day in interest alone on the UK’s net debt (£889bn excluding financial interventions). These are scary figures indeed. But to add to the reality, individuals currently owe more than the entire country has produced during the last four quarters. It’s therefore no wonder that the lending market is in the state it’s in and provides some understanding in to the pressures facing the Government and Bank of England when considering rate changes.
As I write this article a few days before the paper is printed, I am unable to comment on this week’s Monetary Policy Committee (MPC) decision on whether or not to increase the Bank Base Rate. However, out of the nine MPC members for January, two voted for an increase. This is an increase on previous months and we may not be too far away from seeing a rate increase. Some estimates suggest May.
Finally, there has been speculation in the financial press lately regarding the Mortgage Market Review (MMR) which is an FSA initiative to make, in their words, the mortgage market more professional and transparent. Much of this, together with another of their initiatives is the Regulatory Distribution Review (RDR) part of which is designed to encourage our sector towards a fee charging route in all financial advice areas whereas, today, most income for advisors is from introductory fees incorporated in the product sold, paid by the providing financial institution. Watch this space in months to come but it seems fair in many ways that, given the professional qualifications mortgage advisors now need to obtain to give advice, a fee reward is not unreasonable for the amount of work and research undertaken in advising and recommending a mortgage product.
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