A fantastic product has been launched aimed at First Time Buyers. The 95% loan to value product has a discounted rate for two years from the lenders variable rate and no lender arrangement fees on completion. Comparing this to an average range mortgage, this is a saving of around £1k. The lender has no early redemption penalties so the customer can move away at any time and it has a £500 cash back. This is a good entry product for those looking to get on the ladder with just a 5% deposit and great to see lenders are seriously looking to assist first time buyers positively.
Contractors have also been targeted. For those working on fixed term contracts, who have a minimum of 6 months left on the current contract and a good history, it is possible to get up to 90% of the property value. In the main, the lenders will work on daily rate, multiplied by five days and forty eight weeks to work out income. This is then used in the lenders affordability calculations. Some lenders have no early redemption penalties so the customer can move away at any time.
The newly launched Foundation Home Loans have already made some changes following their launch criteria on their Buy to Let offerings. The specialist lender will now allow applications from customers who are in rented accommodation (but own other properties), have income from various sources (i.e. pensions, investments, etc) and deposits are now allowed to be gifted from immediate family members. All positive enhancements.
And, finally…having spent a fantastic day at the inaugural British Specialist Lending Senate at Brooklands Hotel last week, attended by over forty lenders, brokers and specialist mortgage packagers/distributors, I can safely say that this area of the market is set for huge growth over the coming months. As volumes increase on the high street, more customers will be turned away and thus need the assistance of a specialist party to achieve their financial needs. The computer says ‘no’ scenario is not a normal phrase within this sector as many lenders credit search rather than credit score. Therefore human acceptance is the key to decision making on each case’s merits rather than ticking a box on a computer screen. This can only be a good thing for the end consumer and reiterates that there is life after the high street.