‘MERC’ stands for ‘mainstream rate, extended criteria, redemption swap, creative solution’.
The range is available at Bank Base Rate (BBR) minus one basis point, until September 2010, before reverting to BBR plus 1.99 per cent. Borrowers with up to £3,000 of CCJs or two months arrears in the last 12 can be considered, as can discharged bankrupts and settled Individual Voluntary Arrangement clients.
find the latest industry jobs
As part of its rate redemption swap, for every 0.25 per cent increase in BBR, following completion, the early redemption charge will reduce by a like amount. A proc fee of 0.35 per cent exists, with the deal available up to 80 per cent loan-to-value (LTV), status only.
A maximum loan of £400,000 is allowed, with an arrangement fee of £2,995 in operation, which can be added beyond the LTV.
Launching the product, Julie Gaskin, corporate relations manager at GMAC-RFC, said: “There is nothing in the market to compare with this product.
catch up on the industry buzz
Although we have backed the MERC with substantial funding, it is a finite tranche, so only those applying early will benefit.”
James Cotton, mortgage specialist for London & Country, said: “The rate is very good considering the level of adverse a client can have, but it has a very large arrangement fee. I can’t see the logic of having the redemption swap, as I haven’t seen a demand for that from clients. It’s not necessarily a problem that needed solving. Yet, GMAC-RFC should be given its dues for innovation.”
