Mark Gordon, head of product at Platform
Warren’s situation is not uncommon. As unsecured debt levels continue to rise, many people have relatively small levels of adverse credit. Having said this, despite the arrears difficulties, at Platform we have a number of options available to him.
The first, on our non-conforming range, enables Warren to re-mortgage up to 90 per cent of the value of his property across our almost prime, minor and light adverse range. If Warren missed the two mortgage payments in the last 12 months, these products would be suitable for him and start from 6.44 per cent.
If however the missed mortgage payments were longer than 12 months ago Warren can be moved onto our conforming range of fixed rate and tracker products and can take advantage of deals up to 90 per cent LTV with rates starting from 5.99 per cent.
Get the daily news delivered to your inbox
On our non-conforming buy to let product range we will base our rental assessment calculation at 125 per cent on the pay rate of all products lasting three years or more and 110 per cent on our conforming product range.
Alan Lakey, partner at Highclere Financial Services
Recent missed payments severely limit Warren’s choices. The fact that his existing lender is non-conforming adds further grief because many non-conforming will refuse to agree a remortgage from an existing non-conforming. Much will depend on whether both missed payments have been in the last six months as this again narrows the field. Additionally, his personal mortgage and other credit arrangements will be factors.
Certain essential information is missing, such as rental and personal income details, the loan required, property value and also the type of property and construction.Most lenders will base the loan size on the rental income with a few also prepared to utilise any spare personal income.
Find the latest industry jobs
Platform may be able to help with its 8.44 per cent discounted Libor rate up to 90 per cent loan-to-value. If an 80 per cent loan is acceptable, Future Mortgages has an attractive 6.80 per cent rate fixed to June 2010.
Tom Guest, mortgage consultant for Mortgage Options
Warren’s remortgage is possible, but to confirm a lender and rate we would need further clarification on certain issues. With regards to the missed payments, a lot will depend on when they were missed. Two missed payments in the last three months are not un-placeable, but this means the borrowing capacity would be restricted to 70-75 per cent LTV. If these missed payments were not in the last three months but the last 12, he would be looking at borrowing up to 80-85 per cent LTV.
Find out more about this week’s industry news
Whichever lender undertakes Warren’s remortgage will do so at an interest rate which reflects the missed payments. With this in mind, he has to make sure that his existing rental income is sufficient to cover his repayments to the lender and, depending on which lender is used, this can be up to 125 per cent of the monthly rental received.
