On the 20/03/2013 the Chancellor announced a new scheme to boost the housing market.  The government have allocated £12bn of guarantees to enable £130bn of mortgage lending over three years.

The Help to Buy Scheme is designed to promote lending at high to value, including 95% mortgages with a maximum purchase price of £600,000. It will include first time buyers, home movers and remortgages though this criteria could change.

At present on a 95% mortgage some lenders protect themselves from the increased risk of loss on repossession by insisting the purchaser paying a Higher Lending Charge.  This insurance policy will pay the lender the difference between the amount borrowed and the sold price in case of repossession.

The Help to Buy Scheme lessens the risk to the lender as the scheme underwrites 14.25% of the value of the property. On a purchase price of £120,000 the purchaser would still fund a £6000 deposit while government would underwrite £17,100 against default.

The three hoped for benefits of this scheme are:

1)       More lenders will be encouraged to lend at 95%.

2)      The lenders will offer more competitive rates.

3)      Higher lending charge will not be required.

This scheme is aimed to be introduced in January 2014 but as there are ongoing negotiations with the FSA and lenders so this could easily get deferred.

We will update on the progress of the Help to Buy Scheme in future blogs.

Why use Neil Soundy Financial Services for your mortgage advice.

We will give you expert impartial advice on the mortgage market.

Your initial consultation is free with no obligation.

View the video on our homepage that explains how we can offer at least twice the choice of mortgages compared to a standard mortgage broker.

For client reviews go to our testimonial page

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.

By Neil Soundy

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We can discuss your current situation and the options available to you before arranging a free no-obligation meeting.

We have listed below Santander’s basic buy to let lending criteria.

If you answer yes to any of the following questions,

unfortunately Santander will decline the application.

1. Are any of the applicants aged under 21?

2. Are any of the applicants aged over 70?

3. Does any applicant reside outside of the UK/

Does any non-UK applicant not have permanent rights to

reside in the UK?

4. Do either of the applicants not have a current UK

residential or Buy to let mortgage?

5. Has your applicant(s) more than three Secured

Credit commitments or more than two existing Buy to Let Mortgages?

Will your applicant have more than two properties

mortgaged with Santander that are or will be let?

6. Is this a regulated Buy to Let mortgage?

7. Is the property value below £75,000?

8. Will the LTV be greater than 75%?

9. Will the application include any borrowing for

debt consolidation?

10. Will the property be subject to mandatory licensing

as a HMO (House in Multiple Occupancy)?

11. Is the application for a property subject to

planning restrictions preventing occupation for

52 weeks a year?

12. Will the property have four or more tenants or

require more than one tenancy agreement?

13. Did the (proposed) tenant(s) previously own the property?

14. Is the property leasehold, where the leaseholder

retains a controlling interest in the freehold?

15. Is the property a freehold flat?

If you cannot say yes to all the questions, contact us so we can source a but to let mortgage for you.

Why use Neil Soundy Financial Services for your mortgage advice.

We offer at least twice the choice of mortgages compared to a standard mortgage broker.

View the video on our homepage that explains how mortgage advice has changed.

We will give you expert impartial advice on the mortgage market.

Contact us today for a free no obligation initial discussion or meeting

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

The Financial Conduct Authority does not regulate some forms of buy-to-lets.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.

By Neil Soundy

Request Call Back

We can discuss your current situation and the options available to you before arranging a free no-obligation meeting.

There are only two lenders who offer 100% mortgage supported by parents.

They are Aldermore Bank who launched their mortgage in 2011, which has just been joined by the Bath Building Society.

Both lenders operate a similar scheme, where a 100% mortgage is advanced to the purchasers but security is provided by a second charge of 25% of the purchase price on the parent’s property. The benefit of this route to the parents is that they do not need to fund any deposit money or meet any monthly payments.

The drawback is that in the event of non-payment of the son’s / daughters mortgage their property can be repossessed. I would always recommend the parents take legal advice regarding the implications of the second charge.

I have listed below brief information regarding both lenders. (Based on a purchase price of £120,000)

Aldermore Bank                                               Bath B/Society

Rate                                       5.48% (6.00% apr)                                            5.29% (5.80% apr)

Fixed                                     3 years                                                                  3 years

Arrangement Fees               £1298                                                                    £700

As an alternative to these schemes is the Woolwich Family Spring Board Mortgage or a straight forward 95% mortgage provided by Monmouthshire Building Society, Principality Building Society or Leeds Building Society.

Why not contact us to discuss your options. We can then review your circumstances and match you to the most appropriate lender.

Why use Neil Soundy Financial Services for your mortgage advice.

We offer at least twice the choice of mortgages compared to a standard mortgage broker.

View the video on our homepage that explains how mortgage advice has changed.

We will give you expert impartial advice on the mortgage market.

Contact us today for a free no obligation initial discussion or meeting

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage

Request Call Back

We can discuss your current situation and the options available to you before arranging a free no-obligation meeting.

THIS MORTGAGE GIVES THE ABILITY TO BUY A HOUSE WITH JUST A 5% DEPOSIT.

The Principality Building Society has launched a 95% mortgage to join a small band of lenders at this high loan to value.

The major benefits to this mortgage product are :

1)      Competitive interest rate of 4.99% (apr 5.1%)

2)      Only a 5% deposit is required

3)      Open to first time buyers and homemovers

4)      No product fee

5)      Low booking fee of £99

My concerns about the scheme are that you are committed to the product until 28/02/2018. Should your circumstances change and you cannot port the product to another property you will have to pay a penalty of 5% of the outstanding mortgage.

Lending is restricted to Wales and postcode areas SY,HR,CH1,CH2,CH3 and CH4

UPDATE 24/04/2013

Monmouthshire have launched a a new 95% mortgage at a lower rate of 3.75% for three years (4.80% apr). Then 4.99% variable.

http://www.ns-fs.co.uk/95Percent-MORTGAGE-WITH-THE-MONMOUTHSHIRE-BUILDING-SOCIETY

There are a few other lenders offering 95% mortgages.

Clydesdale Bank, Leeds Building Society, Melton Mowbray Building Society, Monmouthshire Building Society, Newcastle Building Society and Nationwide (via their Save to Buy Scheme)

Note. All mortgages are subject to a full lenders underwrite and assessment.

 

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

The Financial Conduct Authority does not regulate some forms of buy-to-lets.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage

Request Call Back

We can discuss your current situation and the options available to you before arranging a free no-obligation meeting.

New lenders are now entering the mortgage market offering a fresh approach and are looking to lend. (For more information on SPV mortgages visit my earlier blog post)

Unlike other established commercial banks, Shawbrook Bank will consider interest only periods of up to 10 years on certain property types including all residential investment units to 75% LTV, 70% LTV on semi commercial and 65% LTV on commercial investment units.

 Types of Security accepted

Multi unit residential investments on one title

• Student BTL
• HMO
• Limited company without an SPV
• Commercial investments
• Mixed use commercial and residential investment units
• Modern factories and warehouses
• Offices
• Industrial units
• Repair Garages
• Hotels, guesthouses, bed and breakfast with more than 6 letting rooms or with a restaurant/bar
• Public Houses

Lending on HMO’s is particularly useful for Cardiff where the Council has introduced additional licensing for buy to let properties Cathays.

Why use Neil Soundy Financial Services for your mortgage advice.

See client reviews on our home page.

Your initial consultation is free with no obligation

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

The Financial Conduct Authority does not regulate some forms of buy-to-lets.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Request Call Back

We can discuss your current situation and the options available to you before arranging a free no-obligation meeting.