Mortgage News

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  • loanarranger
    replied
    Skipton Building Society has announced that for the present they have made significant changes to their criteria amongst which isthe decision to exclude applications on property including HMO’s where the Tenancy will be for the student market.
    The decision comes on top of the same restrictions on student Lets disclosed at the beginning of the week for Paragon, I do not believe that these two will be the only ones who ultimately decide not to consider this sector of the BtL market until normal market conditions return.

    Leave a comment:


  • loanarranger
    replied
    Here is a summary of all changes announced today by various lenders.
    Lenders who have paused accepting new mortgage applications:
    • Canada Life are temporarily closing Lifestyle Gold Plus, Lifestyle Platinum, all Voluntary Select Options and all Prestige Options to new business
    • Paragon Bank has temporarily withdrawn lending on Short-Term finance, Holiday Let and will also not consider properties which either are or will be let to students

    Lenders who have put in place occupation, status or property restrictions:
    • Barclays have made the following changes to their assessment of income and affordability for any of your clients who want to purchase a new home, remortgage or borrow more on their existing mortgage:
      • Annual and Quarterly bonus will continue to be used for income multiples but the proportion that will be used to support affordability will be reduced to 25%
      • Where an applicant has been furloughed, they will accept 80% of basic income up to £30,000 p.a. in line with the government scheme. Where documentary proof can be provided to evidence employer ‘top-up’ contributions, they will accept this additional income for affordability. Overtime, commission, bonuses or allowances are not able to be used for affordability purposes while the applicant is furloughed.
      • For self-employed applicants, where they are eligible for and either utilising or intending to utilise the government scheme, they will allow 80% of income up to £30,000 in line with the scheme rules. For all self-employed applications, they will now request 3 months’ business bank statements in addition to the standards self-employed income

    LTV Restrictions as of 14th April

    Residential
    • Swansea Building Society are accepting Residential Purchase and Remortgage applications up to 80% LTV
    Buy to Let
    • Swansea Building Society are accepting Buy to Let, Holiday Let Purchase and Remortgage applications up to 70% LTV
    Equity Release
    • Canada Life are from today changing various LTV’s across their Lifestyle Options and Capital Select Options. Check against each product for details of the individual LTV’s

    Leave a comment:


  • loanarranger
    replied
    Normally I am sceptical about Mystic meg reports on boom and gloom but the following has clearly been well researched and in the short term , the degree of correction in property prices is harsher than I have believed. I know only time will tell but this is worth a read but holding a stiff drink in the other hand!

    UK house prices to drop 13 per cent this year, CEBR predicts

    by: Shekina Tuahene

    • 14/04/2020

    House prices across the UK will fall by 13 per cent by the end of this year as consumers scale back on expenditure, the Centre for Economics and Business Research (CEBR) has predicted.

    The consultancy firm based its prediction on research from the Cambridge-INET institute which suggested the average UK worker should expect to face a 35 per cent loss of income over the next four months, as a result of the coronavirus pandemic.

    Analysis published by CEBR last week also showed economic activity had gone down by 31 per cent since the lockdown.

    Some regions hit harder

    The firm said some housing markets would be worse hit than others as the loss of jobs and incomes are not expected to affect the whole of the UK equally.

    It is those who work in sectors such as manufacturing, construction, retail, accommodation, food services and other services sectors who are most likely to face a change in income as a result of the coronavirus pandemic.

    According to CEBR, Yorkshire and Humber and Northern Ireland have the highest shares of employment within these industries at 60 per cent and 59 per cent, respectively.

    Wales and the East of England are the next two regions with the highest employment shares in these sectors with 55 per cent, and 54 per cent. This is above the national average of 48 per cent.

    As a result, CEBR said the housing markets in these regions faced the biggest potential disruption due to job and income losses in the months ahead.

    Mortgage borrowers vs renters

    The crisis is expected to have different impacts on renters and those with a mortgage, CEBR said.

    Some 47 per cent of private renters are under the age of 35, and a study from the University of Cambridge found those under 30 were most likely to have already lost their job or had their hours reduced.

    CEBR said given that the average private renter household in England spends more than a third of their income on rent, even a temporary reduction in incomes could lead to tenants becoming unable to pay their rent.


    The CEBR report said: “Once households will burn through their emergency savings, they will have to make tough choices on where to cut down expenditure.

    “Housing is the single biggest expenditure item faced by most households, which means that the shortfall in incomes has a tremendous potential to disrupt the UK’s housing markets

    Leave a comment:


  • loanarranger
    replied
    It is with regret that I have to report that Paragon have confirmed in their amended criteria that they will currently not accept any property where it is let to students, I had originally believed that this related to HMO’s & MUFB’s but clearly to avoid misunderstandings this extends to property which are single family properties but occupied by students.

    For landlords involved in this niche sector and require investment valuations the withdrawal by Paragon is a significant loss to the funding sector.

    Leave a comment:


  • loanarranger
    replied
    I participated in a mortgage related webinar this afternoon , the key participants were the MD and Head of Sales of Foundation Home Loans and arranged by the editor of Mortgage Introducer, for anyone with either a Residential Mortgage or Buy to Let loan which was originated through lenders like FHL where the funding is entirely funded by Institutional investment I would encourage forum readers to key in the following link and listen/view what was being discussed and the questions raised with them: I raised at the beginning of the Q&A given my genuine concerns as to what may occur when things get back to relatively normal terms.https://www.youtube.com/watch?v=i47dIr3M_Pc

    Having spent a fair amount of time speaking with lenders with whom I have developed good relationships with over a number of years, it is clear that there is a genuine nervousness within the lending market and things might get increasingly more difficult if the market takes several months to overcome the issues arising from Coronavirus 19 and the real probability that the number of lenders outside of the conventional banks and building societies might be much fewer than at present and those who have stopped lending because of funding and associated issues might never return.

    Leave a comment:


  • loanarranger
    replied
    The following is an extract of a brokers briefing note from Coventry / Godiva relating primarily to Remortgage but with a note on making an application where presently a payment holiday is being taken on a current property.

    Changes to capital-raising remortgages
    • For owner-occupied remortgage applications and for existing customers who want to raise capital from their property, we’ll apply a maximum LTV of 65%
    • For Buy to let remortgages, we’ll only accept pound for pound applications. We’ll consider further advances on BTL properties but only for essential repairs to the mortgaged property.
    If your client is taking a mortgage payment holiday with another lender because of Coronavirus and wants to take a new mortgage with us

    We’ll only consider a new mortgage when the holiday period has ended, their payments have started again and they’ve made a minimum of three monthly mortgage payments.

    Leave a comment:


  • loanarranger
    replied
    Updated correction re The Mortgage Lender
    This lender has announced the withdrawal of the 80% LtV across its mortgage range limiting to 75%, additionally they have announced an increase of 0.3% across its entire mortgage product range. Before anyone questions the rationale of rates increasing when BoE rates are at their lowest might i reconfirm what I have written previously, lenders like TML are entirely dependent on institutional funding and the rate increase reflects the current risk assessment of lending.
    Speaking with certain lenders over the last 48 hours it is clear that the appetite for lending is unlikely to return to its previous levels for some time , much as what happened in 2008 after the Credit Crunch. One lender ( whom I will respect their confidentiality) has expressed reservations over the viability of HMO properties where evidence is beginning to surface of Landlords experiencing tenants ( Not student tenants) doing runners, whilst this may not be a common feature throughout the country it is fair to say that such actions would have a significant adverse effect on the ability to meet mortgage payments even accepting the three month mortgage payment holiday. I will be posting anything further which might have an impact on both landlords raising mortgages and lenders willing to accommodate suitable levels of funding.
    No lender wants to take adverse actions but in the current uncertain times which we all face , no one wants to be reporting the consequence of lending without taking all prudent checks.

    Leave a comment:


  • loanarranger
    replied
    Here are the following changes announced today , in the main they relate to residential home loans, the criteria indicated by HSBC for those persons furloughed is being replicated by some other lenders so if remortgaging or purchasing , I would advocate speaking with your broker or trying to called your lender but be prepared for a reasonably long period , most staffworking are operating from home so quick responses may not always be possible.

    Lenders who have paused accepting new mortgage applications:
    • None

    Lenders who have put in place occupation, status or property restrictions:
    • Accord Mortgages have tightened their criteria on Residential lending with regards to how they underwrite adverse credit. The following will now apply:
      • Missed Payments
        • On secured loans, they will no longer accept missed payments on a single account within the last 24 months
        • On unsecured credit, they will no longer accept consecutive missed payments within the last 24 months. This includes mobile phones, fixed term or mail order payments
      • Defaults
        • There must be no new defaults registered in the last 6 years
      • CCJ’s
        • All CCJ’s must be satisfied
        • There must be no new CCJ’s in the last 6 years
      • The following changes are applicable from Wednesday 8th April:
      • Debt Consolidation
        • The amount of debt that a customer can consolidate when Remortgaging will be capped at either £50,000 or 10 debts
        • These criteria changes will be applied to AIP’s
    • Barclays have announced that they are not currently accepting new Purchase applications for properties in Scotland or in Northern Ireland. They have also said that they will be capping maximum loan sizes on all products at £2million from Wednesday 8th April
    • HSBC have made some changes to their Income Assessment for Residential Mortgages. With immediate effect, brokers need to ask applicants if their income is impacted by Covid-19 and based on the customer’s response, process the application in line with HSBC’s updated income assessment policy.
      For pipeline applications (received before 7th April but have not yet reached offer stage), HSBC will proceed as stated unless the broker informs them of a change to the applicant’s financial situation – in which case the new application guidance will apply.
      For post-offer applications, HSBC will proceed as stated unless the broker informs them of a change to the applicant’s financial situation in which case the new application guidance will apply:
      • Employed income
        • Where an applicant has been furloughed by their employer, HSBC will assess affordability based on 80 per cent of basic income up to a maximum of £30,000 per year gross. Brokers are asked to input the furloughed income in the application.
        • Where top-up income is being paid by the employer, the affordability will be based on the level of income being received. Brokers are asked to input the actual income (i.e. including top-up salary) in the application.
        • Evidence will be required to validate both furloughed and top-up income and all applications where furloughed income or top-up income is being used will be reviewed by an underwriter
      • Variable Income
        • Bonus, commission and overtime will no longer be an eligible source of income with the exception of NHS employees where variable pay/overtime will be acceptable based on pre-March 2020 levels.
        • Brokers are asked not to complete this section of the application, unless the applicant is an NHS employee
      • Zero-hours income
        • Zero-hours income will be limited to certain professions and where the income has been received for a minimum of 12 months. Income can only be included in joint applications where the customer is not the primary earner and works in one of the following fields: NHS bank nurses and locums; non-NHS bank nurses; care home workers; supermarket workers (including delivery drivers).
        • Brokers are asked not to complete this section of the application, unless the customer falls into one of the above professions
      • Self-employed income
        • For sole traders, partnerships and limited liability partnerships with less than 200 partners, the latest three months’ worth of business bank statements are required for all customers.
          In line with the current process, brokers should input 100 per cent net profit amounts for the current and previous accounting years in the application. All self-employed applications will be reviewed by an underwriter
        • In line with the current process, brokers should input 100 per cent net profit amounts for the current and previous accounting years in the application.
    • Leek United Building Society have reduced their maximum loan amount to £500,000 on both Residential and Buy to Let. They have also announced that from today, they are unable to accept any applications on New Build properties or on Flats regardless of the LTV
    • Metro Bank have made the following changes to their affordability assessments:
      • They are still accepting applications from the self-employed, however self-employed applicants will now be required to demonstrate the “sustainability and profit” of the business
      • For applicants with bonus, commission or overtime income, they will average this over the last 2 years and then take 50% of this for the affordability assessment. The last 2 years P60’s will be required as evidence earnings
      • Investment income will only be accepted where the portfolio is valued at a minimum of £1million
    • The Mortgage Works (TMW) are striving to do as many AVM’s or Desktop Valuations as they can, but for some properties this isn’t possible. Cases will be put on hold for these kinds of properties which include:
      • House of Multiple Occupation
      • Certain blocks of flats - for example where an EWS1 fire safety report is needed
      • Homebuyers Reports and Full Building Surveys - If your client has requested a Homebuyers Report or Full Building Survey, they’ll be unable to complete a valuation and the case will be placed on hold. If, after discussion with your client, you want to change to a mortgage valuation, you can email tmw-updates@themortgageworks.co.uk to request this, with ‘Valuation’ as the subject line. After changing, they can’t guarantee the property will be suitable for a Desktop Valuation and if your client decides to cancel the Homebuyer Report or Full Building Survey, They will be unable to reinstate it at a later date
      • New Build – They’ll only consider Desktop Valuations when the development has been visited in the past 12 weeks and the UK Finance Disclosure Form is available. You can email them the form quoting the case reference in the subject line to Panel.Maintenance@nationwide.co.uk. If this isn’t available or the site hasn’t been visited in the past 12 weeks, they must conduct a physical valuation

    LTV Restrictions as of 7th April

    Residential
    • Accord Mortgages have announced that from Wednesday 8th April, they will be temporarily reducing their maximum LTV for Debt Consolidation cases to 80%
    • Leek United Building Society has capped their maximum LTV to 80%
    • NatWest have asked us to clarify that their recent product changes limited our new business LTV to 80%. However, any pipeline case that was in before these changes they will still look to proceed on a Desktop valuation where possible (excluded cases are BTL, New Build, Flats, +3m properties which all require physical valuations)
    Buy to Let
    • The Mortgage Lender have reduced their LTV to 80%
    • Leek United Building Society has capped their maximum LTV to 65%

    Leave a comment:


  • loanarranger
    replied
    The market continues to change and not for the better judging from the following lender announcements.

    Lenders who have paused accepting new mortgage applications:
    • Clydesdale Bank are not currently accepting new Purchase applications on either Residential or Buy to Let
    • Virgin Money are not currently accepting new Purchase applications on either Residential or Buy to Let

    Lenders who have put in place occupation, status or property restrictions:
    • Cambridge Building Society are currently not accepting applications on Buy to Let products where there is any element of Top Slicing. They are also not currently accepting Let to Buy applications
    • West Brom for Intermediaries have today announced that as a temporary measure, they will not be accepting any non-guaranteed forms of income including (but not restricted to) overtime, bonus and commission. Additionally, they will not accept applicants who have been furloughed by their employers nor will they accept income from self-employed applicants who have lost trading profit due to COVID-19 and are receiving support under the SEISS (Self Employed Income Support Scheme)

    LTV Restrictions as of 6th April

    Residential
    • Clydesdale Bank have temporarily restricted their LTV on Remortgages to 60%
    • Kensington have restricted their LTV for all Residential applications to 70%
    • Virgin Money have temporarily restricted their LTV on Remortgages to 60%
    Buy to Let
    • Clydesdale Bank have temporarily restricted their LTV on Remortgages to 55%
    • Virgin Money have temporarily restricted their LTV on Remortgages to 55%

    Leave a comment:


  • loanarranger
    replied
    HSBC have announced a system of restricting the daily acceptance of new mortgage applications and for the present have stopped the acceptance of maximum LtV applications ( 95%)

    Leave a comment:


  • loanarranger
    replied
    Here is an extract from a briefing note on amended lending criteria from Nat West and Nationwide for those affected in employment terms ( Furloughed) and who are applying for a mortgage.

    Nationwide and NatWest have outlined their affordability criteria for people impacted by the Covid-19 outbreak.

    NatWest will use the borrower's new revised income for affordability assessments whether their employment income has changed permanently or temporarily, or if they are on the government's Coronavirus Job Retention Scheme.

    Brokers will need to provide evidence of their client's new income and a letter from their employer if they have been furloughed.

    If a borrower's basic salary is reducing and not being replaced by the Government scheme, the new revised income will be used for assessment and borrowers will need to provide a letter from their employer confirming what their new income will be if their most recent payslip does not confirm the revised salary.

    Where it is certain or highly likely that one or more elements of the customer’s income will stop or reduce - including overtime, bonuses or commission - then this cannot be used for an affordability assessment.

    Nationwide confirmed that it will accept 80% of income if a borrower has been furloughed, but will no longer accept bonuses, overtime or commission on new applications.

    Nationwide is also unable to accept any additional income, such as shift work, and will only accept zero hour contract income from key workers such as nurses, care home workers, supermarket workers and delivery drivers. Zero hour workers will need to have been employed on this basis for at least 12 months, but Nationwide has removed the ‘same employer’ requirement.

    If using the lower income means a borrower fails affordability, they can choose to reduce the loan amount, extend their term (subject to criteria) or pause their application.

    Leave a comment:


  • loanarranger
    replied
    Bluestone Mortgages , a relative new comer to the niche end of lending via the Intermediary channels have this morning withdrawn from accepting any new mortgage applications.

    Any existing applications which are either in the course of being processed or pending completion will proceed to their conclusion but nothing new will be accepted with immediate effect.

    Leave a comment:


  • loanarranger
    replied
    Paragon Bank have released a briefing notes which to a greater extent is the most positive of all recent announcements from lenders but the change for the moment on Student Let properties is disappointing.

    What we will still do:
    • Lending up to 75% LTV
    • Lending to portfolio and professional landlords
    • Limited Company mortgages
    • Single self-contained properties up to 4 tenants with a remote valuation
    • Lending on HMOs and Multi-Unit-Blocks. These however will still require a physical valuation, so we will accept the case and underwrite, but book in the survey when possible.
    • Lending within 6 months of purchase
    • Lower ICR calculation for 5 year fixed rates
    • Large Loans up to £2m per property



    What we are temporarily halting:
    • Student Lets
    • Holiday Lets
    • Short Term Finance
    • Loans greater than 75% LTV

    Leave a comment:


  • loanarranger
    replied
    Barclays Finally Decide to help BtL Borrowers

    Barclays have now released a note confirming that they will assist BtL borrowers along with residential customers. Here is the link to go to and the form for application is at the end.

    "https://www.barclays.co.uk/coronavirus/mortgages/

    Leave a comment:


  • loanarranger
    replied
    To help clarify the changes relating to TMW & Nationwide I am detailing the new LtV’s across both brands.
    Nationwide for Intermediaries
    Max LTV Transaction type
    95% Product Transfer
    95% Purchase - Existing NBS borrowers
    80% Purchase Equity Share - Existing NBS borrowers
    75% New Purchase and Remortgage - new customers
    75% Purchase Equity Share - new customers
    The Mortgage Works
    Max LTV Transaction type
    80% Further Advances
    80% Product Transfer - Buy to Let
    75% Buy to Let - Purchase & Remortgage
    75% Let to Buy
    75% Ltd Co Purchase and Remortgage
    75% Product Transfer - HMO & Ltd Co

    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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