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Are you a would-be mortgage borrower who has been unable to gain access to private finance because of tougher lending criteria introduced in the last year or two? Did you know that, since the introduction of the mortgage industry regulator’s new affordability rules in April 2014, almost half of those who planned to buy a property have failed, according to Experian, the credit reference agency? Many of these potential buyers are ‘mortgage misfits’; borrowers with less conventional circumstances in need of bespoke products and specialist financial guidance.
These borrowers are typically retired or near retirement, self-employed, contract workers, expatriates or first time buyers looking for higher loan to value mortgages. As a result of the work we’ve been doing to help building societies adapt and innovate, such applicants are now increasingly well catered for by new products from lenders such as Ipswich Building Society and Market Harborough Building Society.
The unintended consequences of regulation have left thousands of borrowers trapped in their homes and unable to move or paying higher Standard Variable Rates, when they could be moving home or accessing some exceptional deals by remortgaging whilst we remain in a low interest rate environment. The good news is that we are in a much better position to help, as a number of small regional building societies have now tailored their criteria to accommodate specific groups such as the retired, expatriates and self-employed.
We applaud the work of these lenders who have responded positively to market conditions, supporting brokers in their mission to cater for these niche areas of the market. We hope that with increasing understanding of the impact of current guidelines regulators might further support more lenders who will be able to follow suit.
Louise Bunce, Head of Sales and Marketing at Market Harborough Building Society, says “The Mortgage Market Review has instigated our move towards bespoke and specialist lending. In particular, we have considerably enhanced our lending and services to expatriate residential applicants who are often not catered for by the majority of High Street lenders. We have developed our expatriate offering to meet the needs of the market, having identified a growing trend in people becoming increasingly mobile; often working overseas, or being based overseas and planning to return to a permanent UK home in the future.”
Paul Winter, CEO of Ipswich Building Society, adds “Ipswich Building Society is standing up for mortgage misfits which include the self-employed, older borrowers, self-builders, first-time buyers, and those who have experienced a lifestyle change, all of which are often overlooked by lenders who insist on machine-only application processes. In order to ensure these applicants are not unnecessarily excluded from the market, we are advocating a more inclusive approach to mortgage lending in general which means those approaching the end of a deal are not forced to continue on a more expensive SVR rate and denied choice or entry to an otherwise competitive market.”
What should you do?
If you think you might be a ‘mortgage misfit’ then get in touch with us. Established in 1999 Private Finance has successfully negotiated billions of pounds of mortgages. It is an independent, award-winning mortgage broker whose mission is to exceed your expectations, working on your behalf to procure competitive terms and a suitable solution, quickly and efficiently. Private Finance is not limited in the range of mortgages it will consider for clients. It is well respected by mainstream institutions and private banks, with which it has a reputation for introducing high quality clients. Its mortgage brokers are qualified professionals who understand and empathise with the needs of discerning individuals. You can be assured that your mortgage will be competitively priced and well suited to your needs.
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