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This is our take on recent news in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.
The expectation vs the reality of 95% mortgages
This announcement will be good news for a number of potential borrowers, however there is definite disconnect between what borrowers expect and the reality. We have had many enquiries following the announcement and it is clear from some of these enquiries that is has created unrealistic expectations… from borrowers thinking they can buy at 95% of £800,000 with £25,000 of income with the new scheme, to borrowers thinking they may be able to borrow the 5% from a lender to make it a 100% loan also! Happy to talk through some examples of this but I did have one client surprised when I pointed out that the monthly payments for what they wanted would likely be 2x their net monthly income.
Good news for self-employed borrowers
Two major mainstream lenders have just announced that they are relaxing self-employed criteria, with some significant changes. For instance, Santander are increasing LTV from 60% up to 75% and TSB are removing the LTV cap entirely, with it reverting to 90%. Moreover, TSB are also allowing digressionary income and increasing the potential term to 40 years, which increases affordability for borrowers.
Open banking: Speeding up self-employed mortgage applications
HSBC have partnered with Experian and are allowing ‘Open Banking’ – this enables self-employed borrowers to share their business banks statements electronically, significantly reducing processing times. Most lenders require 3 months of business bank statements, which involve manual underwriting, this approach on the other hand brings a degree of automation to the process, saving time, both for the lender and for the self-employed borrower…