Blog Archives

New mortgage rules proving a challenge to borrowers

23.07.2014

Several lenders are struggling to process mortgage applications in a reasonable period of time because they are struggling to get to grips with the new mortgage rules. Some are taking as long as 18 working days to assess applications.

Borrowers don’t have the inside knowledge to identify which lenders to avoid because of the backlog of applications they are dealing with. Those in a contract race or competing against a number of interested buyers who are able to move faster are at a disadvantage and risk missing out on a property. Chains are breaking because other buyers and sellers simply can’t wait.

The main issues are hold-ups with applications due to new bank policies and the new requirements for detail around the deposit. We have had many clients struggling to prove where their deposit has come from: not because there is anything dodgy about it but because memories simply don’t stretch back that far in terms of remembering where various components came from.

The real loser is the borrower who faces the unwelcome scenario of multiple credit searches as they go from lender to lender looking for a mortgage. This is bad news for a borrower’s credit file and ultimately makes the whole process of getting a mortgage that much harder.

However, it is possible to find a lender which isn’t struggling and can turn around an application within several working days. Contact Anderson Harris for more details.

Jonathan Harris
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Jonathan Harris

Borrowers in their forties struggling to get a mortgage

11.07.2014

Lenders are increasingly concerned as to how mortgages are going to be repaid, and have particular worries about those borrowers taking on interest-only mortgages who don’t have any plans in place to pay off the loan. It is harder for older applicants to get a mortgage with many lenders insisting the loan is paid off by the age of 65 or 70, depending on their criteria.

Increasingly since the mortgage market review was introduced, many lenders are using 65 as the applicant’s retirement age which makes little sense when the state retirement age is rising and most people will work on beyond this age.

Given that the average age of a first-time buyer is their mid-30s, by the time many have saved up for a deposit there is not enough time to pay the mortgage back by the time they reach retirement age. Stretching the term to reduce the payments and help with affordability is not an option either.

Some lenders are more flexible than others with regard to when a mortgage is paid off so if you are in an occupation where you are intending to work until you are 70, some lenders will consider this. Contact us for more information.

Adrian Anderson
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Adrian Anderson