Mortgage News

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  • Glover1862
    replied
    Hi LA, I hear it has been extended to October, does that mean if I apply anytime upto October I get 6 months? Or is it that borrows who took the option three months ago get a further 3 months making 6?

    Leave a comment:


  • loanarranger
    replied
    Mortgage Payment Holiday Extension
    07:19 22/5/2020
    It has just been confirmed that the Mortgage Payment Holiday has been extended for another three months, this is positive news for those struggling financially because of Covid19 but as I have mentioned in previous postings will have potential adverse effects on those relatively new lenders whose funding is 100% reliant upon Institutional Funding.
    Once I get feedback from lenders I will update the Forum.

    Leave a comment:


  • loanarranger
    replied
    My motto in life is to treat people as you would expect to be treated, I.e Fairly and complete honesty.

    Leave a comment:


  • jpkeates
    replied
    That's a grown-up long term customer centred attitude.

    Just as you would expect!

    Leave a comment:


  • loanarranger
    replied
    Hi JPkeates , don’t worry about brokers , many of us have been in the thick of it for many years and the trials and tribulations of the current issues makes decisions on funding more challenging.
    All I would say is one’s broker should be there as a sounding board at times like this and be prepared to do research for the client even though in the short term it might not result in business being written, it’s the old fashioned courtesy of helping and giving advice so a considered judgement can be made.
    It shouldn’t always be a case of thinking this could be an income generator or not, Clients are a valued entity and as a broker one takes the rough with the smooth, fail to meet expectations on service and the client will go elsewhere and never to return.

    Leave a comment:


  • jpkeates
    replied
    My, overall, take on all of this is not to do anything with any lender for a while if it's possible to avoid it.
    Which isn't great news for brokers, I know.

    I tried to lock everything in place last year because of Brexit, which has proven to be a benefit in this, completely unexpected, period of change.

    Leave a comment:


  • loanarranger
    replied
    Finally the first signs of lender confidence in both residential and Buy to Let sectors as can be seen in elements of the following update.

    Lenders who have paused accepting new mortgage applications:
    • None
    Lenders who have reinstated lending:
    • Accord Mortgages have from reinstated lending on New Build Purchases up to 85% LTV and on Help to Buy up to 75% LTV however this currently excludes Northern Ireland but that is being looked at
    • The Mortgage Lender (TML) have resumed lending on HMO’s and Multi Unit Blocks

    Changes to income and affordability restrictions:
    • Melton Building Society (MBS Lending) have increased their maximum income multiple to 5 x single or joint income. Help to Buy remains capped at 4.5 x income in line with scheme rules

    Changes to occupation restrictions:
    • None

    Valuations

    Physical Valuation Updates and associated criteria
    • Accord Mortgages have resumed physical valuations in England only
    • Aldermore have said today that they will resume physical valuations on Residential properties in England and that Buy to Lets will follow
    • Bank of Ireland for Intermediaries have resumed physical valuations in England but desktop valuations will continue in other parts of the UK, including Northern Ireland, for Residential properties up to 85% LTV and for Buy to Lets up to 75% LTV for the time being
    • Clydesdale Bank are resuming physical valuations in England from next week and will use a combination of both physical valuations and desktop valuations where appropriate for new business
    • Mansfield Building Society have reinstated physical valuations in England
    • Metro Bank have announced today that they are recommencing physical valuations in England and that they will be working through their pipeline as quickly as possible
    • Newcastle Building Society are recommencing physical valuations in England on Residential Purchases and Remortgages, New Build and Self Build from Thursday 21st Maybut Buy to Let will continue to be done by desktop valuations at this time. They will be working through their Residential pipeline in chronological order
    • The Mortgage Lender (TML) have announced that they are resuming physical valuations in England

    Desktop Valuations
    • None

    Property Restrictions Imposed
    • None

    Property Restrictions Lifted
    • None

    Loan Sizes
    • Melton Building Society (MBS Lending) have increased their loan sizes as follows:
      • Up to 75% LTV - £1m
      • >75% - 80% LTV - £500,000
      • >80% - 90% LTV - £400,000
      • >90% - 95% LTV - £300,000

    Property Values
    • None

    LTV Reductions

    Residential
    • None
    Buy to Let
    • None

    LTV Increases

    Residential
    • Accord Mortgages have increased their LTVs on both Purchase and Remortgages as follows:
      • 90% LTV up to a maximum loan of £500,000
      • 85% LTV up to a maximum loan of £1m
      • 75% LTV up to a maximum loan of £1.5m
    • Clydesdale Bank have confirmed that they will return to 90% LTV from next week
    • Virgin Money will go back up to 90% LTV from next week
    Buy to Let
    • Clydesdale Bank will increase their LTV up to 80% from next week
    • Virgin Money are increasing their LTV back up to 80% from next week
    Product Transfers
    • None

    Leave a comment:


  • loanarranger
    replied
    Cautionary note relating to Affluent Borrowers on Furloughed Income

    Well-paid borrowers who have been furloughed under the government’s coronavirus job retention scheme may struggle to remortgage when their current deal expires, brokers warn.

    Under the scheme, the government will pay 80 per cent of workers’ income capped at £2,500 a month. This is equivalent to £30,000 net income a year. Employers can choose to top up the remaining 20 per cent of employees’ earnings.

    Borrowers who are used to earning, for example, £50,000 a year net income and who took out a large mortgage which is reliant upon their full earnings could find themselves trapped with their current bank and missing out on the best deals.

    Furthermore, workers who remain in their jobs on full pay but rely on variable elements, such as bonuses and commissions, may also struggle to find a new deal when their current product term expires.

    Chris Sykes, mortgage consultant, Private Finance, said: “Product transfer rates are generally in line with a lender’s current range for new borrowers. But a lender that gave you the best rate two years ago, may not be offering you the best rate now. It could be more beneficial for them to move lenders but their temporary income circumstances could be restricting them from doing that.”

    Sykes said borrowers may also have different priorities, other than saving money on their rate, such as raising money to build an extension or consolidate debts they may have built up during the pandemic.

    However, on a lower income these decisions will also have to be put on hold.

    “Borrowers will either have to wait until they are on full income and then move banks, which means moving on to their lender’s standard variable rate, or do a product transfer with their current lender and apply for a further advance later,” said Sykes.

    Brokers frantically sifting through lenders’ terms and conditions drove the search term ‘Covid -19 furloughed workers’ into the top three criteria searches on the Knowledge Bank system during April.

    Mortgage applications for furloughed borrowers are being considered but banks are adopting different approaches in how they treat income.

    Halifax, for example, will consider furloughed borrowers on their lower income. Where a borrower’s affordability is impacted by a short-term reduction in their income, the bank will consider appeals for higher loan amounts if the borrower has access to a contingency fund.

    Sykes said that lenders have also clamped down on borrowers using bonuses and commission to support their income, even if they are no longer furloughed.

    He added: “If you had been furloughed it is unlikely you would have been receiving any additional income and the expectation is that the company which has furloughed its staff will not be in a position to pay out bonuses or commission in the future.”

    This has led to some lenders taking out bonuses and commission completely from their affordability assessments, and others have slashed it to 50 per cent or 25 per cent of what the borrower receives.

    Clearly one hopes that the criteria will be relaxed when normal services resume but knowing the level of credit card borrowings which are in place , no-one can now automatically assume that getting a mortgage irrespective of whether it is a remortgage or purchase can get the level of loan similar to that which existed before the Coronavirus kicked in.

    Leave a comment:


  • loanarranger
    replied
    Positive Announcements from Coventry for Intermediaries

    Coventry for intermediaries has introduced 85% LTV purchases and remortgage to its Owner-Occupied range as well as reducing rates on a majority of products.

    BTL LTV’s have also been increased to 75% for purchases and remortgage, with rate cuts across the range.

    Coventry has also introduced enhanced electronic valuations on both residential and BTL properties combined with physical valuations where necessary.

    They will now allow capital raising on Owner-Occupied mortgages for PAYE clients increased to 75% LTV and for landlords capital raising on BTL mortgages has been increased to 75% LTV – including property related purposes, and not just essential repairs.

    Leave a comment:


  • loanarranger
    replied
    Nat West Tighten Criteria for Self Employed Applicants


    NatWest has changed the way it is assessing self-employed income.

    When assessing affordability, Mortgage Solutions understands NatWest is now using the lower of the average of the last two-years’ net profit; the most recent year’s net profit or the confirmed government income support amount.

    Changes apply to applications that have already been submitted but not yet completed where the broker or borrower informs NatWest of a material change to the application.

    However, the bank is not expecting advisers to proactively review their pipeline.

    Packaging requirements


    NatWest has also made some temporary changes to its self-employed packaging requirements for new business.

    A supplementary information sheet is required as part of the packaging when submitting an application where one or both of the applicants are self-employed.

    Applications without a sheet will not be progressed.

    If income does not satisfy on-going affordability at underwriting stage, Mortgage Solutions understands NatWest has said it will decline the case and will not accept appeals.

    And where a borrower’s income has been negatively impacted by Covid-19, and they are not eligible for Self Employed Income Support Scheme with their revised income failing affordability, NatWest said brokers should not submit applications.

    Leave a comment:


  • loanarranger
    replied
    Halifax tightens criteria for SELF employed & Furloughed Applicants


    Halifax has warned it may require extra documentation and information to support self-employed borrowers, as it provides an update on applications affected by the coronavirus outbreak and lockdown.

    Halifax has said self-employed applications may be referred to underwriters for review.

    The lender will be looking for evidence of the long-term history and stability of the business within the sector, as well as funds to meet commitments and the likelihood of returning to normal profitability and trading in the future.

    Halifax also confirmed it will consider applications from furloughed workers, based on the amount of income currently received.

    Where a borrower relies heavily on bonuses or income, the application may also be referred to underwriters.

    If a customer is affected by a short-term reduction in their income, with affordability below what would normally be expected, the lender will consider appeals for higher loan amounts if contingency funding can be evidenced.

    The lender added that it is continuing to closely monitor the Covid-19 situation to make decisions to support customers.


    Leave a comment:


  • loanarranger
    replied
    Thursday 14th May Mortgage News announcements

    Lenders who have paused accepting new mortgage applications:
    • None
    Lenders who have reinstated lending:
    • Foundation Home Loans have announced that they are resuming lending for both Residential and Buy to Let. Their new range of products will be available from Monday 18th May

    Changes to income and affordability restrictions:
    • HSBC have made the following changes to criteria:
      • Foster Carers income is now accepted but is treated as self-employed income however, they won’t ask to see accounts as they would on normal self-employed cases. They will require a letter from the foster agency confirming the total foster income received for each of the last 2 years at the point of application, the number of children currently in their care and if there are any known foreseeable changes in their level of income. For the affordability calculation, you need to put 100% of the evidenced income in the self-employed net profit fields. You will also need to put the number of children currently in their care down as dependents
      • Self Employed Income from Limited Companies you are no longer required to provide signed finalised financial accounts. Instead, their underwriting team will validate finalised accounts (whether signed or unsigned) with the information contained in the latest years’ accounts filed with Companies House
    • NatWest are changing the way they assess self-employed income from Friday 15th May for both Residential and Buy to Let applications. When assessing affordability you must use the lower of:
      • The average of the last two years net profit
      • The most recent years net profit
      • The confirmed government income support amount

    Changes to occupation restrictions:
    • None

    Valuations

    Physical Valuation Updates and associated criteria
    • Fleet Mortgages have resumed physical valuations in England for both pipeline cases and new applications
    • Nationwide for Intermediaries are resuming physical valuations in England. For applications on hold that weren’t suitable for Desktop Valuations, they will contact the vendor/applicant directly to arrange to get the valuation booked in
    • Shawbrook Bank are resuming physical valuations and these can be instructed via their Broker Hub
    • The Mortgage Works (TMW) are resuming physical valuations in England. For applications on hold that weren’t suitable for Desktop Valuations, they will contact the vendor/applicant directly to arrange to get the valuation booked in

    Desktop Valuations
    • Buckinghamshire Building Society have announced their new range of products that qualify for Desktop Valuations subject to the property mortgaged being suitable for an AVM
    • Masthaven Bank can now use Desktop Valuations for bridging cases up to 60% LTV

    Property Restrictions
    • None

    Loan Sizes
    • None
    Property Values
    • None

    LTV Reductions

    Residential
    • None
    Buy to Let
    • None

    LTV Increases

    Residential
    • None
    Buy to Let
    • None
    Product Transfers
    • None

    Leave a comment:


  • loanarranger
    replied
    The following note has been reported, if correct it will provide a small crumb of comfort for those taking advantage of the Mortgage Payment holiday, however for every credit there is a debit and this extension mightresult in a number of the lenders who are institutionally funded being forced out of business since the same concessions of having a payment holiday are not extended by the Institutions to their lender clients. If proved correct and similar to what occurred after the Credit Crunch , the number of active lenders will reduce and lending will become more restrictive.

    ”The Financial Conduct Authority (FCA) is considering giving homeowners a 12-month break from mortgage payments by extending the payment holiday period, according to reports.

    This will be done to help homeowners avoid defaulting on their mortgages and having their homes repossessed, The Times said.

    In March, the regulator said it would review the mortgage holiday package in three months and would extend them if it was appropriate.

    Recent figures from UK Finance revealed over 1.2 million people had taken a mortgage holiday since March, with 700,000 of those being granted in April.

    According to guidance from the FCA, borrowers who have taken out a mortgage holiday should not have their credit score impaired and should not be treated differently from those who keeping making payments.

    Borrowers on payment holidays are also allowed to make product transfers during the payment break.

    Leave a comment:


  • loanarranger
    replied
    I am copying an article which has appeared today in one of the leading Intermediary Publications.

    NEWS

    Valuation backlog could take up to two months to clear


    Surveyors predict it will take up to two months before backed up valuations on suspended property transactions are cleared and normal service levels are resumed.

    More than 370,000 house transactions have been paused because of the government’s coronavirus lockdown measures, according to analysis by Zoopla.

    Valuers say it is difficult to estimate how many of these will require a physical valuation because some will already have been surveyed, some will be cash transactions and some may be of a more complex nature that buyers have decided to put on hold during the pandemic.

    However, at least 60,000 of the transactions currently on hold are expected to require a physical valuation according to an industry source. But some firms say the backlog is likely to be much higher. When physical valuations do resume, the surveying workforce is expected to be much smaller and it will take time to get back up and running to full speed.

    Chris Bramham, commercial director, Metropolis Surveyors, said: “I think it will take up to two months to get back to serviceable levels. The industry wants speed from a surveying service but it will be some time before the backlog is cleared.”

    Bramham said it could take even longer if not all valuers returned to work. “Surveyors are an ageing population. Some may decide not to come back.”

    Richard Sexton, director, business development, esurv, said estimating the backlog was not as easy as just counting the number of cases in your own pipeline. Lenders too had a pipeline of unknown cases that, due to lockdown restrictions, they have not progressed to an instruction.

    Talks have already been held with housing minister Christopher Pincher on how the housing sector can safely return to work while observing social distancing measures, according to the Mail on Sunday. Valuers who must carry out physical surveys will be expected to observe strict social distancing measures.

    Furthermore, in the Prime Minister’s update on lockdown restrictions announced on Sunday evening, he said those who could not do their job at home, were actively encouraged to return to work. Surveyors have been left scratching their heads at whether this includes them and are hoping industry guidelines will soon follow.

    Sexton said: “Even when we do return to work, it’s likely furloughed surveyors will be brought back in phases and restrictions may be different depending on where they are in the UK. There will also be less data around when looking for comparables. So getting on top of the backlog depends on how quickly we can unfurlough staff and get them back up to speed.”

    Leave a comment:


  • loanarranger
    replied
    Here are the announcements made for Thursday 7th May:-
    Lenders who have paused accepting new mortgage applications:
    • None
    Lenders who have reinstated lending:
    • None

    Changes to income and affordability restrictions:
    • None

    Changes to occupation restrictions:
    • None

    Valuations

    Property Restrictions
    • Kent Reliance for Intermediaries have the following as exclusions for the types of properties that are not able to benefit from their new AVM model. They are:
      • Residential
        • New-build property or recently converted (built/converted in last 24 months)
        • Properties that have never been occupied
        • Studio flats
        • Flats in blocks over six storeys
        • Flats with suspected cladding or combustible balconies
        • Shared ownership and right to buy
        • Properties with significant land (over two acres)
        • Listed buildings
        • Modern methods of construction
        • Short leases (less than 85 years)
        • Properties adjacent to or above commercial premises
        • Properties subject to renovation/refurbishment
        • No bankruptcies, IVAs or DMPs
      • Buy to Let
        • New-build property or recently converted (built/converted in last 24 months
        • Properties that have never been occupied
        • Properties with over four bedrooms
        • HMOs (including student lets)
        • Multi-unit freehold blocks
        • Studio flats
        • Flats in blocks over six storeys
        • Flats with suspected cladding or combustible balconies
        • Properties with significant land (over two acres)
        • Listed buildings
        • Modern methods of construction
        • Short leases (less than 85 years)
        • Properties adjacent to or above commercial premises
        • Properties subject to renovation/refurbishment
    Loan Sizes
    • None
    Property Values
    • Kent Reliance for Intermediaries have increased their maximum property value to £750,000 using the AVM model. The minimum property value is £75,000
    Desktop Valuations
    • Kent Reliance for Intermediaries have extended their product range to 70% LTV to use an AVM model with no valuation or admin fees and available for Purchases and Remortgage on both Residential and Buy to Let

    LTV Reductions

    Residential
    • None
    Buy to Let
    • None

    LTV Increases

    Residential
    • None
    Buy to Let
    • None
    Product Transfers
    • None

    Leave a comment:

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