Posts with tag: remortgaging

Saffron Introduces Transitional Mortgage

Published On: May 22, 2015 at 11:41 am

Tags: remortgaging,saffron mortgages,transitional mortgages

Those trapped in their current mortgage could benefit from the new transitional home loan launched by Saffron for Intermediaries.

Saffron Introduces Transitional Mortgage

This opportunity allows for remortgaging under the terms of the Financial Conduct Authority (FCA) transitional rules, ahead of the new European Mortgage Credit Directive, which will end this prospect in March 2016.

Saffron’s transitional mortgage has been created for borrowers with a good credit history who cannot pass their current lender’s affordability criteria.

The five-year discounted rate of 3.99%, up to 75% loan-to-value (LTV), will return to Saffron’s Standard Variable Rate (SVR), currently 5.39%. After three years, borrowers with a clean payment history can move into one of Saffron’s retention offers.

Head of Mortgage Sales at Saffron, Anita Arch, says: “The plight of mortgage prisoners locked into existing deals because of the MMR [Mortgage Market Review] affordability rules has been well documented.

“Saffron is therefore delighted to be able to offer a helping hand before the new European Mortgage Credit Directive comes into force next year. Borrowers can remortgage onto an attractive 3.99% five-year discount, which has no early repayment charges and an arrangement fee of just £995, which can be added to the loan.

“We believe this deal will be welcomed by borrowers who thought they had no way out of their existing mortgage and we’re expecting significant interest from brokers.”¹

¹http://www.propertyflock.co.uk/f/51BF94C55

Parents Using Their Children as Guarantors

Published On: May 20, 2015 at 10:24 am

Author: Em Morley

Categories: Landlord News

Tags: mortgage borrowers,Mortgage lending,Mortgage Market Review,remortgaging

Older mortgage borrowers who have been refused a deal from their lender have to rely on their sons and daughters for help.

More and more over-50s are asking their children to be guarantors on their mortgage, after they failed the strict new lending rules when remortgaging.

Parents Using Their Children as Guarantors

Guarantors are in place to meet the costs if the borrower defaults on their mortgage repayments.

Experts say that parents have to “demean themselves”¹ because banks are reluctant to lend into retirement, as they worry borrowers’ pensions will not be sufficient to cover the payments.

Recent research from the National Association of Estate Agents (NAEA) revealed that a third of its agents have seen clients experiencing age discrimination from lenders.

This shocking fact arrives after the introduction of tougher lending rules in April 2014, when mortgage providers were required to prove their customers could afford their loans.

But some banks have taken these requirements too far and are now discriminating against older borrowers, even when they have a solid pension.

Mortgage broker John Charcol’s Ray Boulger says: “Often we find that the parent can actually afford the mortgage, but the lender will not take their income into account simply because of age.”¹

Lisa Harris, of retirement specialists Saga, insists: “These rules need an urgent review.”¹

However, banks say they need clarity on which lenders they can approve loans for, as lending into retirement can be risky.

¹http://www.dailymail.co.uk/news/article-3087045/Now-s-bank-son-daughter-Parents-increasingly-turning-children-mortgage-help-ageist-lenders-turn-down.html

Remortgaging on the up due to rate war

Published On: May 14, 2015 at 9:23 am

Author: Em Morley

Categories: Landlord News

Tags: fixed-rate deals,rate wars,remortgaging

As the mortgage price wars continue, a new report has indicated that one in six homeowners will consider remortgaging their property during the next six months.

Nottingham Building Society suggest that homeowners are looking for average savings of £99 per month, which adds up to around £1,200 per year.

The Council of Mortgage Lenders’ (CML) recent figures show that remortgaging lending was up by 15% month on month. Industry experts suggest that there will be a continued increase in remortgaging on the back of a number of five year fixed-rate deals falling below 2%

Seeking Stability

Research from the CML indicates that many homeowners considering remortgaging their homes are looking for a fixed-rate deal. The study suggests that 12% would want more than a five-year deal. Only 7% of those asked would choose to be on a tracker rates, while another 7% said they would think about a standard variable rate. [1]

Fixed term, five-year deals proved to be the most popular choice for people wanting to remortgage, with 27% of potential customers saying that this was their preferred option. 21% said they would opt for a two-year deal.[2]

Remortgaging on the up due to rate war

Taking Advantage

Ian Gibbons, Senior Mortgage Broking Manager at Nottingham Mortgage Services, believes that the ongoing mortgage competition can only be a good thing for the market. Gibbons said that, ‘the mortgage price war is interesting to existing homeowners who are keen to take advantage of the record low rates.’ He continued by saying that, ‘with interest rates expected to rise in the coming years, then now could well be the right time for many to consider whether there are savings to be had.’[3]

Mr Gibbons suggests that, ‘potentially, savings are higher than the average £99 a month people are looking for. Someone with a £150,000 mortgage who moved from a deal at 4% to one at 2% could be around £3,000 better off.’ He warns however that, ‘to secure the best remortgage deal it is important to look at more than the base rate. You need to search the whole market and to be aware of the product fees that may be charged. A great rate won’t save you much if you have to pay a high fee.’[4]

[1-4] http://www.financialreporter.co.uk/mortgages/one-in-six-consider-remortgaging-as-rate-cuts-continue.html?utm_content=buffer24e9b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer