Mortgage News

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  • Claymore
    replied
    Originally posted by sam_cat View Post
    No, thank you!
    Ditto! Keep the posts coming.

    Leave a comment:


  • sam_cat
    replied
    Originally posted by loanarranger View Post
    Now you are making an old man blush , but thank you both for your kind comments it is very much appreciated.
    No, thank you!

    Leave a comment:


  • loanarranger
    replied
    Now you are making an old man blush , but thank you both for your kind comments it is very much appreciated.

    Leave a comment:


  • sam_cat
    replied
    Originally posted by Claymore View Post
    Going by the stats on the number of people viewing Loanarrangers thread, I would imagine there is a huge amount of Landlords that actually value his updates. I know I do!
    Yes, Read every update as I feel it gives a useful insight into what is going on in the market..

    Leave a comment:


  • Claymore
    replied
    Going by the stats on the number of people viewing Loanarrangers thread, I would imagine there is a huge amount of Landlords that actually value his updates. I know I do!

    Leave a comment:


  • STBaker
    replied
    Thank you loanarranger for your timely updates on mortgage market developments. I greatly appreciate your posts and insights, which I think not all members value no pay attention to. Looking forward to further updates !

    Leave a comment:


  • loanarranger
    replied
    First may I thank you for your posting, always good to get Forum readers making comments on my postings under Mortgage News.

    I believe your last sentence reflects the views of many , the costs of early redemption penalties could indeed make it prohibitive to switch thereby hedging against the potential risk of higher funding costs and in many instances when the time does come toremortgage the criteria for borrowing will have shifted significantly resulting in a double whammy. Certainly not an ideal situation for all affected.

    Leave a comment:


  • STBaker
    replied
    I think that its highly unlikely that UK rates will go up any time soon for many reasons. However, the way I see it the driver of higher borrowing costs will be due to both US & UK governments issuing more bonds & guilts - i.e. in line with Trump's and Hammond's recent announcements. They sort of shoot themselves in the foot by announcing this, but I gather there was no other choice. The yields on the bonds have already increased over the past 3 weeks from all time low. The likes of Barclay's, Lloyds, HSBC's, etc get their funding from the wholesale markets, although long dated, this will trickle down into higher mortgage costs to catch up with the spread vs UK yields. Even if the bank's base rate stays unchanged, I believe we'll see rates pickup from the current low's as soon as Q1 next year .... wish I could lock all my mortgages into 5yr fixes, early repayment charges bite.

    Leave a comment:


  • loanarranger
    replied
    Leeds BS make changes to their rental stress calculations

    Leeds Building has announced a number of criteria changes in response to the PRA’s new underwriting standards for buy-to-let mortgages.

    The changes, which come into effect on 1st January 2017, include an affordability stress test rate of 5.50% for purchase and capital raising remortgages, and 5.00% when there is no additional borrowing.

    The income coverage ratio for buy-to-let and holiday let mortgages will go up from 125% to 140%, and the ICR will take into account mortgage interest tax relief.

    An ICR assessment will not be required for existing Leeds Building Society BTL customers who have come to the end of their existing deal and there is no additional borrowing.

    Leeds has also removed minimum income requirements, which were previously £25,000 pa or £40,000 for joint applicants.
    Additionally, its entire range will be available up to 70% LTV.

    Leave a comment:


  • loanarranger
    replied
    Paragon makes further changes to Rental stressed criteria

    Further to my note on Paragon and its stance on rental stress criteria , they have announced further changes following the Prudential Regulatory Authority proposals.

    Paragon is making changes to its affordability assessment for buy-to-let mortgages in response to the PRA’s new underwriting standards which will be implemented in April 2017.

    Paragon is adopting a graduated interest coverage ratio, tailored to the tax status of the individual landlord.

    As a result, the ICR will not change for landlords who are unaffected by the tax changes. Landlords paying basic rate income tax and corporate landlords will continue to be assessed at an ICR of 125%. Where it is identified that a landlord will be paying a higher rate of tax, a higher ICR of 140% will be used when assessing affordability.

    The revised approach to affordability also includes changes to the reference interest rate used in the affordability calculation. For all products other than longer term fixed rates, the reference or stressed rate will be set at 2% above product rate or 5.5%, whichever is higher. For longer term fixed rates the current stressed rate is 4% or the product rate if higher.
    John Heron, Director of Mortgages, said: “Government policy towards the Private Rented Sector will increase costs for landlords and it is clear that this will need to be reflected in lender affordability assessments.

    “The PRA’s supervisory statement released in September this year is helpful in ensuring that lenders approach this in a consistent fashion.
    “The changes that we’re announcing today are designed to tailor affordability to each landlord’s individual circumstances, whilst keeping the application process straightforward for brokers and their customers.”

    Leave a comment:


  • loanarranger
    replied
    Just like a London Bus , wait 30 minutes and two come together

    Announcement from The Mortgage Works indicates that the changes are gaining apace.

    "We're amending our BTL rental stress rate

    From Monday 19 December, we'll be making changes to our Buy to Let rental stress rate for new mortgage applications.

    A stress rate of 5.50% (or pay rate +2% if higher) will now apply on all applications, unless:

    #

    The product term is fixed for 5 or more years or;

    #

    The application is a remortgage of up to 65% LTV without capital raising

    The current stress rate of 4.99% will apply in the two scenarios above. For applications where overall Buy to Let lending with the Nationwide Group exceeds £1m, a stress rate of 5.99% will remain in place.

    There won't be any impact as a result of these changes for customers seeking a product switch or transfer of equity, providing no additional borrowing is involved."

    Leave a comment:


  • loanarranger
    replied
    Virgin Money make changes to Buy to Let Mortgages

    Virgin Money is making changes to their Buy to Let lending policy which will take effect today, *Monday 5 December.*

    Interest coverage ratio*
    Their interest coverage ratio will increase from 125% to 145%.
    Interest rate stress*
    They will change their interest rate stress from Buy to Let Variable Rate +1% (currently 5.74%) to 5.50% for all tracker and fixed rate products of less than five years.
    The stress rate for five year fixed rate products will be the higher of the product rate or their Buy to Let Variable Rate (currently 4.74%).
    Maximum mortgaged properties
    They will no longer accept applications from customers with more than 11 mortgaged properties in total in their portfolio.*
    The maximum portfolio limit of £2 million and/or four properties with Virgin Money will remain unchanged.*

    Leave a comment:


  • loanarranger
    replied
    Hi Gordon

    Firstly thanks for posting a response to my updating on Mortgage News.

    You make very valid comments regarding rate increases in the US , however their own financial dynamics are at variance with those affecting the UK with a booming economy and reduced unemployment, even house prices which have been pretty dormant for some considerable time are now increasing across the entire country: I accept that interest rates will increase 17/18 due to the expected increase of inflation however the overall economy in my honest opinion could not handle any reflective substantial increases in rates without having a serious affect on the economy , housing etc. My prediction is that Bank Base will possibly reach 2% towards the middle of 2018 , unfortunately I dont gamble and I am certainly not George Soros.

    Leave a comment:


  • Gordon999
    replied
    Goldman Sachs forecasts US interest rates to rise 4 times before end of next year , should we expect the UK interest rates to follow ?

    " Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said that the market has rising expectation for the growth in the U.S with the stimulus policies of President-elect Donald Trump. Inflation and treasury yield rate are expected to see a rise. It is anticipated that the Federal Reserve will increase the interest rate once this year and raise the interest rate by three times next year, with 25 bps each " .

    Leave a comment:


  • loanarranger
    replied
    Apologies too quick on the send button before I returned to doing the Xmas tree.

    "There is more to come for the buy-to-let sector next year. The Bank of England is bringing in tougher rules for buy-to-let lenders which are likely to make it harder to get a mortgage from next year while the Financial Policy Committee has also just been handed powers to cap buy-to-let lending if it thinks the market is overheating.

    Indeed, earlier this week the Financial Times reported that rumours had surfaced that the PRA has told three lenders they have enough buy-to-let loans and should think twice before extending finance to landlords in future. "

    Leave a comment:

Latest Activity

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  • SDLT and purchase reservation fees
    by ritfor
    Hello folks,

    For second homes:

    Purchasing a property for 33k. Reservation fee 6k. Total 39k = No SDLT.
    Purchasing a property for 35k. Reservation fee 6k. Total 41k = 3% SDLT.

    This is correct isn't it?

    Thanks.
    20-06-2020, 12:03 PM
  • Reply to SDLT and purchase reservation fees
    by combo75
    I don't know, my head is spinning.

    I have just been to look at a 4 bed Student let terraced house, currently let out £1850pcm.

    The current landlord is diabolical and the students are complaining about the state of the place. It needs quite a bit of updating but it's not a...
    02-07-2020, 18:27 PM
  • Reply to SDLT and purchase reservation fees
    by BTL investor
    hech123,

    You could be right, the truth is that nobody knows what’s going to happen that’s why the experts are predicting different outcomes but I struggle to see how me purchasing a property today for £200,000 with £7,500 of stamp duty and receiving a pre-tax and pre-expenses rental...
    02-07-2020, 11:41 AM
  • Reply to SDLT and purchase reservation fees
    by BTL investor
    combo75 I don’t see the attack on landlords coming to an end anytime soon, both labour and conservative governments have spent the last 3 or 4 decades funding free homes to asylum seekers, single mothers and pretty much anyone that doesn’t want to go to work to buy their own home or pay their own...
    02-07-2020, 11:11 AM
  • Renovation Loan for a Right To Manage Company
    by AlleyRTM
    Hello,

    I am a director of a Right To manage company, and we need extensive renovations to our roof, and other parts of the building.

    Does anyone know of a way to gather the funds to pay for this, like a loan or grant?

    Is it possible for an RTM company to take...
    30-06-2020, 04:39 AM
  • Reply to Renovation Loan for a Right To Manage Company
    by loanarranger
    Good point hech123, I would add that even if a bank were prepared to lend as unlikely as it is , why on earth would the Directors be prepared to give their Personal Guarantees forsuch borrowings. I fear that the liability rests in seeking a surcharge for the respective leaseholders to fund the costs...
    02-07-2020, 09:32 AM
  • Reply to Renovation Loan for a Right To Manage Company
    by hech123
    I would imagine not. You should get it from the leaseholders, it is there responsibility. You may get a loan at high rates if there is any value in the Freehold if you own that but if you are just a RTM company with no assets then getting a loan would be extremely difficult . Really you should have...
    02-07-2020, 08:37 AM
  • Reply to SDLT and purchase reservation fees
    by hech123
    I very much doubt the market is going to have a correction downwards, I am really not even sure why any experts are predicting this. Large house price falls usually fall exponential growth in houses making them very unaffordable. Add to this that banks are well capitalised and looking to expand lending....
    02-07-2020, 08:32 AM
  • Reply to SDLT and purchase reservation fees
    by combo75
    Hi BTL, I am in the same position as you and I am sitting on quite a bit of money for deposits. But I am not willing to pay £16-22K in SDLT towards buying a property.

    I have noticed that a lot of property seen in my area is coming down but not by enough.The furlough scheme is keeping everything...
    02-07-2020, 08:25 AM
  • Reply to SDLT and purchase reservation fees
    by ritfor
    Apologies Gordon, I should have said that the property would be in need of refurbishment....
    01-07-2020, 17:31 PM
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