Bill Keighley our resident head of Financial services has been arranging finance for our customers for the best part of 20 years. With hints that the financial markets are changing towards the better after many difficult years post recession we asked his opinion on the key topics hitting the news this Spring.
The Grey Pound
Some High St banks are finally acknowledging the changing face of retirement ages and the fact the older borrowers have been disadvantaged for far too long, with Halifax increasing their maximum age for mortgages being paid off, to age 80 this week.
It isn't necessarily the case that all borrowers can do this as the lender will need to assess your pension income from age 70 to see if it fits their lending model. This news, although welcome, isn't as straight forward as the press lead you to believe!
Halifax have actually decided to do what quite a few small building societies have been doing for a number of years and make a big public announcement for maximum coverage.
The Return Of 100%
Barclays have launched a 100% mortgage this month which needs a 10% lump sum depositing by parents in a Barclays account and held there for 3yrs.
Some parents might prefer doing this rather than gifting a deposit which is then tied up within the property.
It is also advantageous to have the money in an account rather than in the house if the relationship breaks down and then things can get complicated!
Recent statistics have shown that the "Bank of Mum & Dad" now feature in the top 10 of lenders by size and that more then a quarter of UK mortgages have cash attributed to parents in them
It may be that other lenders venture into the 100% market with innovative products once they see how Barclays get on. I'm sure that Barclays won’t want to be the only lender offering 100% loans as it will be a strain on their capital adequacy and also their service levels. Watch this space on this one!
Buy To Let Stamp Duty Changes
George Osbourne's latest property market intervention has seen Stamp Duty (SDLT) increased for those buying a 2nd property and as usual, people are looking for ways around it especially if the property is being bought for a dependant relative ie son or daughter going to university etc.
I am getting quite a few enquiries about guarantor mortgages as people are looking for legitimate ways to avoid SDLT, but sadly lenders are not looking at accepting these types of scenarios. If you are a guarantor you will be named on the mortgage and also on the title deeds so SDLT cannot be avoided.
However there is one lender offering a mortgage if your son or daughter is attending university but with strict geographical criteria as follows:
The Mortgage market is constantly evolving and there is no substitute to looking thoroughly at your options and taking professional advice before applying for a mortgage or starting your property search. At Bramleys we are always delighted to help and you can make an appointment to see Bill in any of our branches