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  • loanarranger
    replied
    Wednesday 6th May market changes.

    Lenders who have paused accepting new mortgage applications:
    • None
    Lenders who have reinstated lending:
    • Barclays have reinstated the following products:
      • Buy to Let Remortgages up to 75% LTV
      • Help to Buy including Help to Buy London and Help to Buy Scotland
      • Product Transfers and Further Advances on their Residential Reward range up to 80% LTV
    • InterBay Commercial have resumed lending today. There are some restrictions in place around being unable to do physical valuations but we’ll list those out under the relevant headings below

    Changes to income and affordability restrictions:
    • Furness Building Society have told us that on both Residential and Buy to Let cases, the following applies:
      • For Self Employed Applicants, in addition to their existing self-employed criteria, applicants will now need to provide the last 3 months business banks statements in order for them to assess income
      • With regards to furloughed workers they are subject to the following:
        • They will accept of 80% of their basic income up to a maximum of £2,500pm (£30,000pa gross)
        • If an applicant’s employer is paying any top-up amount (up to 20% of an applicant’s salary), this will be considered for affordability as long as there is documentary evidence to confirm this
        • Bonus, overtime or commission will only be considered for ‘key workers’

    Changes to occupation restrictions:
    • None

    Valuations

    Property Restrictions
    • Furness Building Society have put the following exclusions in place for Residential cases utilising their Desktop Valuations:
      • New build property or recently converted (built / converted in last 24 months)
      • Properties that have never been occupied
      • Properties that have 6 or more bedrooms
      • Studio flats
      • Flats in blocks more than 6 storeys
      • Flats with suspected cladding or combustible balconies
      • Properties with more than 1 acre of land
      • Listed buildings or built before 1850
      • Modern Methods of Construction
      • Short leases (less than 85 years)
      • Properties adjacent to or above commercial premises
      • Properties subject to renovation / refurbishment
    • InterBay Commercial have the following exclusions on Buy to Let:
      • Portfolios (unless properties are on separate titles)
      • 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
      • 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
    Loan Sizes
    • Furness Building Society have a maximum loan amount of £500,000 for applications wanting to utilise their Desktop Valuations
    • InterBay Commercial have announced their new maximum loan sizes on:
      • Semi Commercial from £150,000 to £600,000 up to 60% LTV
      • Buy to Let from £100,000 to £700,000 up to 70% LTV
    Property Values
    • Furness Building Society have a maximum property value of £1million for Residential cases going through on their Desktop Valuation
    • InterBay Commercial have a new semi-commercial Buy to Let range for properties up to a maximum value of £1million
    Desktop Valuations
    • Furness Building Society will from today be able to carry out Desktop Valuations on Residential applications up to 75% LTV. These are available in England, Scotland and Wales

    LTV Reductions

    Residential
    • None
    Buy to Let
    • None

    LTV Increases

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

    Leave a comment:


  • loanarranger
    replied
    Tuesdays change announcements, again there is a focus on Residential mortgages but AVM’s are also being reinstated.

    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:
    • Skipton for Intermediaries have announced the following changes to contract workers:
      • If applicant is a independent contractor, they now require a minimum of 3 months left on the current contract, or evidence that the contract has been renewed (previously 2 years in line of work, 1 year contracting)
      • For zero hours contracts they require a copy of the latest contract, dated post 31 March 2020, and the latest bank statement supporting this income as well as two years SA302s. Income used for affordability will be the lower of the latest evidenced income (annualised) of the average of the last 2 years (or lower if this has reduced) as opposed to previously where this was just an average

    Valuations

    Property Restrictions
    • Precise Mortgages have given us their list of exclusions for their AVM’s which are:
      • For Bridging
        • New build property or recently converted (built / converted in last 24 months)
        • Properties that have never been occupied
        • HMOs (including student lets)
        • Multi-Unit Freehold Blocks
        • Flats
        • Holiday Lets
        • Properties with significant land (more than 2 acres)
        • Listed buildings
        • Modern Methods of Construction
        • Short leases (less than 85 years)
        • Commercial / Semi-Commercial properties
        • Properties adjacent to or above commercial premises
        • Properties subject to renovation / refurbishment
        • Development exits
        • Further advances, retentions or stage releases
        • Cross collateral charges
      • For Second Charges
        • New build property or recently converted (built / converted in last 24 months)
        • Properties that have never been occupied
        • Flats
        • Properties with significant land (>2 acres)
        • Listed buildings
        • Modern Methods of Construction
        • Short leases (<85 years)
        • Properties adjacent to or above commercial premises
        • Properties subject to renovation / refurbishment
        • Bankruptcies, IVAs or DMPs are not accepted
    Loan Sizes
    • None
    Property Values
    • None
    Desktop Valuations
    • Kensington have confirmed that their Desktop Valuations have gone live from today
    • Mansfield Building Society have introduced Desktop Valuations for both Residential and Buy to Let
    • Precise Mortgages have put in place AVM’s for both Bridging and Second Charges and brought out new ranges of products for these. They will lend up to the following limits:
      • Bridging - up to 50% LTV and max loan of £275,000 are available on both regulated and non-regulated bridging and Limited Company applications
      • Second Charges – up to 50% and max loan of £200,000 with loans available for any purpose

    LTV Reductions

    Residential
    • Tipton Intermediaries have removed their 90% LTV fixed rates from close of play today due to unprecedented demand as a consequence of many other lenders withdrawing their high LTV products. Their 90% 2 year discounted product is being monitored but is still available currently
    Buy to Let
    • None

    LTV Increases

    Residential
    • Kensington have increased their LTV back up to 75% with the introduction of Desktop Valuations from today
    • Mansfield Building Society will now lend up to 75% LTV on Residential applications
    Buy to Let
    • Kensington have increased their LTV back up to 75% with the introduction of Desktop Valuations from today
    • Mansfield Building Society will now lend up to 70% LTV
    Product Transfers
    • None

    Leave a comment:


  • loanarranger
    replied
    Latest amendments to criteria , the key focus surrounds residential applications:-
    Lenders who have paused accepting new mortgage applications:
    • None
    Lenders who have reinstated lending:
    • None

    Changes to income and affordability restrictions:
    • Leeds Building Society have provided further clarification with regards to the following:
      • Furloughed Workers
        • Will accept 80% of their basic income up to £2,500pm (£30,000pa gross)
        • For cases where the employer will be funding all or part of the difference, these can be considered on a case by case basis and will require evidence from the employer and a referral to a senior underwriter via a BDM
        • Bonus, Overtime or Commission are not acceptable
        • For pipeline cases they will proceed as stated at application stage unless you inform them of a change to your clients financial situation in which case the new guidance will apply. You must advise them as soon as possible of any change in your client’s circumstances
      • Key Workers with Variable Income
        • Variable income sources such as bonus, overtime, shift allowance, commission can be considered for applicants classed as a ‘keyworkers’ due to the current COVID-19 situation
        • This includes NHS staff, care home workers, supermarket workers (including delivery drivers). This list is not exhaustive and other sectors can be considered on a case-by-case basis. Care will be taken to ensure current levels of overtime are sustainable once the impact of COVID-19 reduces.
      • Key Workers with Zero Hours Contracts
        • Zero hour contracts can be considered for applicants classed as a ‘keyworkers’ due to the current COVID-19 situation, this includes NHS staff, care home workers and supermarket workers (including delivery drivers)
        • This list is not exhaustive and other sectors can be considered on a case-by-case basis. Care will be taken to ensure applications are not over-committed and the current situation is sustainable post COVID-19
        • Applicants on a zero hours contract must have been employed for at least 12 months
        • The latest P60 and most recent payslip are required to calculate the income. The income should be the lower of the latest P60 total or the most recent payslip year to date annualised
        • Bonus, overtime or commission must not be used

    Changes to occupation restrictions:
    • None

    Valuations

    Property Restrictions
    • Masthaven Bank have said that the following properties will be excluded from their AVM’s:
      • Properties over £1m
      • Properties adjacent to commercial premises
      • Properties in poor/derelict condition
      • Properties with more than 2 acres
      • Ex-local authority flats
      • Flats in blocks of more than 6 storeys
      • New builds
      • Private sales
      • HMOs, and properties currently vacant awaiting tenants
      • No more than 1 property to proceed on an AVM within a block of flats
    Loan Sizes
    • Masthaven Bank are increasing their loan sizes for cases that can benefit from an AVM to:
      • £350,000 for Residential Remortgages
      • £150,000 for Second Charge Residential – This is not available on Second Charge Buy to Let
    • Teachers for Intermediaries have put in place a maximum loan amount of £750,000 for cases using their new Desktop Valuation service
    Property Values
    • Newbury Building Society will go up to the following property values for AVM’s/Desktop Valuations:
      • £750,000 in Newbury’s core lending area (excluding Central London)
      • £500,000 for New Builds
    Desktop Valuations
    • Masthaven Bank are this week introducing AVM’s for the following, all with a maximum loan amount of £350,000:
      • First Charge Residential Purchases
      • Buy to Let Purchases
      • Buy to Let Remortgages
    • Newbury Building Society have announced that they will accept AVM’s and Desktop Valuations on some Purchase, Buy to Let and Remortgage cases up to 60% LTV and these will be assessed for suitability on a case-by-case basis. They will go up to 95% LTV on Shared Ownership cases
    • Teachers for Intermediaries have today launched their “Digital Valuations”. They are able to go up to 80% LTV for properties up to £1m in value and up to 60% LTV for properties estimated to be worth £1m and £1.5m. This is not available on either New Build properties or Buy to Let cases

    LTV Reductions

    Residential
    • None
    Buy to Let
    • None

    LTV Increases

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

    Leave a comment:


  • loanarranger
    replied
    Thanks Boletus
    This change came with effect from 09:00 today but unfortunately only for remortgages and not purchase applications.

    Leave a comment:


  • boletus
    replied
    Originally posted by loanarranger View Post
    The market continues to change and not for the better judging from the following lender announcements.[*]Kensington have restricted their LTV for all Residential applications to 70%
    https://www.mortgagesolutions.co.uk/...ent-ltv-deals/

    Kensington Mortgages has resumed lending across its 75 per cent loan to value (LTV) residential and buy to let offerings.

    Leave a comment:


  • loanarranger
    replied
    Whilst my postings might have given the impression that the world was about to fall (or at least the Buy to Let mortgage market) I thought I would pass on some positive news.

    Although sadly some niche lenders have for the present withdrawn from the market for both residential and BtL mortgages I am able to confirm that slightly over 85% of those participating in one or both of these sectors remain open for business: whilst the norm maximum for residential purchases are restricted to 90% there are a very small minority of lenders who will consider up to 95% and for Buy to Let it is very much 75% as standard with one exception who still market an 80% , I am refraining from mentioning any lenders given the state of flux that some are presently operating and there may be a very small number of lenders outside the numbers mentioned who have yet to check the information normally supplied to Mortgage Sourcing organisations.

    Focusing on BtL , I can confirm that there are presently at least 24 & 26 lenders open for business depending on whether the funding is for a purchase or remortgage.

    Rates quoted as at today suggests the best 2 year fixed rate as being 1.59% and 5 year at 1.94% , there are numerous alternatives available where product fees might make it more attractive so do not be immediately swayed by the lowest rate , it could bite back as indeed taking note of the Reversionary rate , here there is a disparity amongst the main players. For those not inclined to consider a fixed rate , then the key attention of lenders is towards the short date rates with Tracker Rates as low as 2.49% ,Discounted 2.15% and Standard Variable Rates from 2.65%.

    So all in all the market is to a greater extent open for business but the acid test will be the actual valuations being given via the AVM's or Desktop Valuations until such time as valuers can undertake physical valuations.

    Hope the above is of some help.

    Please note that rates do change and without normal notice being given by lenders so best to check very carefully as to what might be appropriate for you.

    Leave a comment:


  • loanarranger
    replied
    Great way to end a Monday, BM Solutions are returning to lend up to 75% for remortgages with effect from Wednesday 29th April but purchase applications remain at 60%.
    There are a few other positives which I will update tomorrow.

    Leave a comment:


  • loanarranger
    replied
    A lender is set to launch a Vulnerability Calculator to help mortgage advisors provide a more accurate advisory service to assist clients seeking mortgage funding. Clearly I like other brokers cannot give a seal of approval until it is launched but given the genuine uncertainties which everyone is and will be facing anything which can help in deciding what is the most appropriate funding for each potential borrower.

    Here at Viva Retirement we are always trying to push ourselves and the sector to raise standards.



    As the client is at the heart of what we do, we have taken a lot of time to build what we believe is the sector’s first vulnerability calculator.

    We are very proud to say that we will be using this calculator for all business going forward.

    It will significantly contribute to helping identify vulnerability and giving clear instruction to the adviser on how best to deal with clients identified as vulnerable, or at a higher risk of vulnerability, to make sure that the client is looked after appropriately.

    As with most companies, Viva has always had a vulnerability policy in place, but we found that some aspects were very rigid with age being the main driver followed by major changes in client circumstance, while other factors were being left open to interpretation by the adviser.

    In reality, this makes it hard to take into consideration many variable factors that have an impact when assessing vulnerability and so we have radically changed the way that we approach this topic to give it the importance that it should rightly have.

    Scoring of vulnerability

    Pilot results have validated this approach and we are pleased to say that this will be launched imminently.

    There are now a series of questions built into our fact find, the answers to which will give a total scoring and will determine the outcome of how each client is dealt with.

    Each question has a specific weighting depending on how important it is to the financial planning that is taking place.

    These questions now include things like looking at the previous financial situation, if debt management was ever in place, third party involvement and if the client already has a lifetime mortgage.

    No grey areas

    The difference with this calculator is that there will no longer be any ‘grey’ areas of assessing vulnerability and each output will direct the adviser to a certain course of action.

    We are very excited by this development as we are committed to our ethos; treating each client as if they were our own parents.

    Leave a comment:


  • loanarranger
    replied
    Barclays have announced an increase in the maximum loan to 80% with changes to the product rates.

    Leave a comment:


  • loanarranger
    replied
    Bank of Ireland changes its position on applicants whose employment is furloughed

    “The bank will assess the income of furloughed borrowers based on 80 per cent of their basic salary up to a maximum of £2,500 per month or £30,000 a year or 100 per cent of the salary where the employer is topping up the furloughed amount. This will be subject to evidence provided.

    Bonuses, overtime and dividends will be excluded from the income assessment.

    Support for borrowers

    Customers will also be able to complete product transfers while on a payment break and this can be done through brokers. Brokers will have to contact the bank directly.

    Illustrations and offers will then be emailed to the broker, and customers can sign electronically, eliminating the need to send documents in the post.

    BOI UK will also give customers who have exchanged contracts the option to extend their mortgage offer for up to three months if necessary, to allow them to move at a later date.

    Either a customer or their broker can complete the request form and both as well as the solicitor, will receive a confirmation letter when processed.

    Bank of Ireland UK continues to lend up to a maximum of 85 per cent loan-to-value (LTV) across all new residential mortgages and further advances. For buy to let, this is limited to 75 per cent.

    Desktop valuations also remain in place.

    Iain Smith (pictured), head of intermediaries at Bank of Ireland, UK: “We’re continuing to work very closely with brokers and be there for them during these unprecedented times.

    “The continuity of our services remains our top priority, and our business development managers will be contacting intermediaries to explain how we can support them and their customers.”

    Leave a comment:


  • loanarranger
    replied
    HSBC removes 95% Loan to Value facility and withdraws from the Buy to Let sector during the current crisis.


    "We cannot currently accept any applications for a loan of more than 90% of the property value, or for a buy-to-let mortgage."
    HSBC has announced that it has removed its 95% LTV product range from sale for all new business applications.

    HSBC is also unable to accept applications for buy-to-let mortgages during the Covid-19 outbreak due to limitations on physical valuations

    Leave a comment:


  • loanarranger
    replied
    Hi Gordon999, Lenders todate have operated rental stress calculations based on whether the applicant has either less than four BtL properties or above with a variance on whether it is a Ltd Co application . The standard is 125% for the 1st category and the second is up to 145%, however to complicate the assessment some lenders will consider Top Slicing whereby a percentage of the applicants primary income might be considered if the rental failed to meet the indicated stress calculations. ( where 5 year deals were being offered these would have a lower stress rate) .
    I must confess I have not come across the need for 155% which based on a pay rate plus a premium of say 2% or the actual product pay rate whichever is the higher would make the affordability almost impossible.

    The second point indicates that if the rental was insufficient between these two levels the lender would not include top Slicing to allow the figures to be sufficient to get the loan required.

    Personally I have never felt it prudent to involve an element of subsidy from earned income to meet the borrowing for BtL; either a property is self supporting or it’s not but others clearly take a different view but this could then impact on the ability to meet mortgage costs for both residential and buy to Let should difficulties be experienced like those whose main employment may be furloughed and be capped at 80% or a max of £2500.

    Leave a comment:


  • Gordon999
    replied
    What does this 100%-145% mean ? I thought all BTL mortgage lenders required the gross monthly rent to cover 155% of monthly mortgage payments

    " Personal Income will not be accepted on BTL applications where there is a rental shortfall between 100% and 145%."

    Leave a comment:


  • loanarranger
    replied
    Clydesdale Bank announce temporary changes to residential criteria.

    Clydesdale have announced changes to their criteria, what should be noted and which is becoming common practice is the restriction or indeed exclusion of income where employment is currently furloughed , this in my opinion almost excludes the lender from being considered a suitable lender to approach unless the primary borrower has a significant income.

    Key Points:
    • We are now able to accept residential purchase applications to 65% and residential remortgage applications to 75% LTV.
    • BTL purchase and remortgage applications to 60%.
    • A desktop or automated valuation will be used. Please note the maximum property value on all cases is £500,000

    We are temporarily unable to accept the following:
    • Any form of variable income (overtime, commission, bonus). Affordability will only be assessed on basic salary.
    • Where an employed customer is designated as furloughed, or a self-employed customer has applied for the self-employed income support scheme, their income will not be used in the affordability assessment.
    • Personal Income will not be accepted on BTL applications where there is a rental shortfall between 100% and 145%.

    Self-employed customers will also need to provide their last 3 months business bank statements to evidence continued turnover.”

    Leave a comment:


  • loanarranger
    replied
    I have received a briefing note issued to brokers by Mortgage Broker Tools and in light of what I have posted in recent weeks I thought it might be of general help in understanding some of the reasons which lie behind the approach being taken by lenders for Residential mortgages but also spills over to BtL.

    Covid-19 and impact on affordability, criteria and mortgage lending.

    As a result of the Covid-19 lockdown, the lack of physical valuations has caused a huge contraction in LTV's across the market. As an inevitable consequence, lenders are now finding ways to expand the use of desktop valuations/AVMs.

    It seems that the purchase side has been affected the hardest as remortgages more often took advantage of AVMs. HSBC have a facility for an AVM up to £ 2m value.

    The next wave of changes however will be for bonuses, overtime and commission, as lenders stop taking this additional income into account. So far, it doesn't seem as though Nat West, Nationwide and Coventry are changing their affordability calculators to reflect this. Brokers will, however, need to know which lenders take this into account and which lenders don’t. As an example, HSBC will allow additional income for NHS workers, which is to be commended, of course.

    Another class of clients to be hit from an underwriting perspective will be the self employed or Ltd Company Directors. Lenders are unlikely to base a case on 2018/2019 net profit figures when the applicant is in an industry with no work. Again HSBC are first out with a new plan - asking for an applicant’s last 3 months business bank statements and each case will be underwritten individually - potentially a sign of things to come.


    Hope this is of interest and I will return to posting on Monday , now its me time and a glass of merlot.Have a great weekend

    Leave a comment:

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