SPPL has launched a suite of product enhancements and an online affordability calculator, together with enhanced borrowing limits of up to 50 per cent of verified income based on a joint annual income of over £65,000.
In future, all of SPPL’s product ranges will be grouped under general headings reflecting the credit status of applicants, rather than being constructed on a system of units for each adverse credit factor (CCJ, arrears etc.) Product ranges are: near-prime, minor adverse, light adverse, medium adverse, heavy adverse and unlimited adverse. These options are now more closely aligned with the first charge mortgage product ranges offered by SPML. LIBOR loading rates have been reviewed overall and reduced where possible, and there are now no longer any differentials in loadings for regulated loans (up to £25,000) with loadings for self-certification of income reduced from 0.50 per cent to 0.25 per cent.
Also for self-certification applicants, an option to self certify to 90 per cent loan-to-value (LTV) has been introduced on the three schemes with the lightest adverse credit, and there is now an option to self-certify income on the unlimited adverse credit scheme. CCJs in each scheme are now stipulated by maximum overall value rather than having a top limit on the number of CCJs incurred in the stated period. Where the applicant has some arrears, the stipulation that the last two payments have been made has been removed, so long as arrears, and their occurrence, are within the limitations of the product.
There must now be full valuations (not “drive by”) over 80 per cent LTV, or where the property valuation is greater than £500,000. However, 50 per cent of the valuation fee will be refunded to brokers on completion in this scenario. In addition, broker commission rates have been enhanced and will now be between 7 per cent and 10 per cent for all loan sizes depending on the product scheme. The commission payable remains uncapped and is not differentiated on volume.
The SPPL online affordability calculator can be accessed through the SPPL website, and is available to all SPPL packaging partners. It allows them to enter details of their customer’s gross income and other monthly payment commitments, together with details of the proposed new secured loan from SPPL. The information is then used to determine whether their income is sufficient to meet the new loan repayment, and confirms the maximum total borrowing available. Whereas the top level on overall borrowing (including the proposed new SPPL loan) had previously been 40 per cent, SPPL has now raised the ceiling to between 40 per cent and 50 per cent on a sliding scale according to joint gross income levels.
Marie Kennedy, national sales manager of SPPL, commented: “Bringing our product schemes in line with the way that SPML and most other first charge non-conforming mortgage lenders structure their products should make SPPL’s second charge secured loans much easier for brokers to understand and explain to their customers. Combined with more competitive rates, better terms on self-certification options, and simplification of some of the adverse credit criteria, this should help brokers to satisfy the needs of more of their clients.
“The new calculator facility on the SPPL website enables brokers to key in customer information and get an immediate response as to whether the proposed new secured loan is allowable under our affordability limits. Previously, this all had to be worked out manually in the broker’s office, and rechecked once the application was received by SPPL. If the broker had made any errors in the manual calculation, this would inevitably cause queries and delays. Now, the affordability ratio is worked out instantaneously and the customer information already keyed into the calculator is then used to pre-populate the credit agreement, if the borrower’s income is sufficient to meet the income test. The printed-off version of the affordability results screen, needs to be included when the case is packaged and sent to us for underwriting. We have also developed an off line calculator which can also be used to determine how much the customer is able to borrow.
“With regard to the new higher limits on affordability: at higher incomes of £30,000 and above, we feel that applicants have sufficient ability to afford the higher percentages of up to 50 per cent, without compromising affordability. If there are any elements of self-certification, and on all applications for our unlimited adverse plan, the top affordability ceiling remains at 40 per cent.”
