Mortgage advice to become even more crucial in 2011
With lending conditions set to continue to be tough next year, mortgage advice will be more crucial than ever.
The Bank of England has warned that it will be harder to get a mortgage because lenders worry that impending job cuts will make it more difficult for borrowers to pay their mortgages. The publication of the Financial Services Authority’s Mortgage Market Review will also make it more difficult to get finance, with new affordability tests proposed. Housing minister Grant Shapps recently said that even he would struggle to get a mortgage under the proposals.
The private banks will therefore become even more important for wealthy buyers looking for funding. Those who have complicated income streams and rely on bonuses for a large part of their salary, require an interest-only mortgage, or are self-employed, will find the private banks more flexible than high-street lenders, at competitive rates.
Melanie Bien, director of Private Finance, says: ‘Advice will be crucial. The private banks retain their appetite to lend and offer excellent rates for the right sort of clients. But you need to use a broker to access these deals.
‘Landlords will also need to take advice as they expand their portfolios, tempted by rising rents and yields. Although Paragon has returned to the market and Abbey plans to launch investment mortgages next year, there are fewer products available than at the height of the boom and some lenders are only accessible through brokers so advice will be crucial.’