Pagans may claim that Christmas is about overindulgence and, critically, not going without. As we begin to immerse ourselves in the festive season, I’m sure many of us have heard about the demise of Farepak and wondered how those caught up in the regular savings fiasco are going to cope.
Inevitably some of the unfortunates, along with many others, will cross our paths in a desperate attempt to borrow their way through to the New Year.
Speed of release of funds is vital, as often a realisation that the lottery is perhaps not going to happen for another year may register late in the day. Traditionally, the way around this predicament was a loan.
As a broker you may or may not choose to get involved in the unsecured fraction of this ulcerative end of the market. Disappointment in the decisions thrown back by restrictive credit score models creates rage at a 20 per cent acceptance level at best, choosing instead to steer the customers to the multiple online choices directly rather than put your overall relationship on the line.
Secured loans are often a more viable option for all parties with loan-to-values (LTV) beyond the property value available to clean customers and self-certs up to 100 per cent LTV, and of course a greater tolerance to bad credit ratings at 90 per cent LTV and below. There is also ample financial recognition in some instances.
The market itself has come along way in the last 12 months, with new entrants such as Kensington Personal Loans testing the market with its aggressive stance on early repayment charges (one month’s interest plus one month’s actuarial on all loan sizes). This goes against the grain of the established slider charges that seemingly went on forever and tarnished the reputation of the market.
Telegraphic transfer of funds straight into the client’s bank account and online decisions-in-principle are also emerging, and hopefully will be the norm across all lenders in time for the Christmas after this.
Now for the first time there is another alternative on the blocks to facilitate Tiny Tim’s Christmas tucker – and that is a remortgage supported by an automated valuation model. Don’t disregard this as all hype – believe me I’ve just seen the GMAC-RFC proc fee list presented to me by our accounts department with the £95 deductions for this very privilege – it’s as long as my Xmas stocking. Industry gurus may bounce around the acceptance stats of this newly embraced method of valuing between 40 per cent to 60 per cent of cases, but nevertheless that is a sizeable chunk for all to go at – let’s face it, no child is going to want their presents in January – and the premium charged for this service is surely in the greatest test environment ever in December.
Generally as we reflect on the year that was in our industry, service has been the focus and the key differentiator, and it has become increasingly the justification for best advice. In this time of urgency, let’s see if lenders who have been good to us all year can bail us out in time once more.
Mainstream
Yorkshire BS and Alliance & Leicester have two-year fixes at 4.74 per cent and 4.84 per cent respectively. Nationwide has a remortgage at 4.88 per cent, fixed for a similar period.
Woolwich has a 4.98 per cent fixed for 10 years to 80 per cent LTV.
Bank of Scotland’s fixed rates have marked out its intentions for 2007, with £250 million taken in daily. It is now recognised within HBOS as the best conduit for remortgages as it does not suffer from the same retention problems the others seem too.
Buy-to-let
Rooftop Mortgages made the step of increasing its buy-to-let calculation to 115 per cent from 100 per cent. This only affects the amateur market as its portfolio product continues to allow self-cert of earned income.
GMAC Partners has reduced the minimum age for a second applicant to 21 years old. The main applicant must still be at least 25.
Mortgage Express will now be basing its valuation fee on the estimated property valuation at the time of application. This means that when the valuation report is received, if it falls within a lower valuation band to that originally estimated, no refund will be made for any overpayment.
Self-cert
UCB Home Loans has extended its free valuation to 15 December 2006.
BM and The Mortgage Business have been proactive with their retention policies and are now churning out regular product changes.
Adverse
London Mortgage Company now has its own identity within the Lehman Brothers’ stable. Its CCJs approach is unrivalled at 90 per cent LTV for the light to medium end of the market.
db mortgages recent rate adjustment has pushed its self-cert near-prime offering at 85 per cent LTV into the limelight.
Kensington is poised to launch a new range through selected outlets. It allows £1,001 in CCJs and one missed mortgage payment.
