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Getting a mortgage on an unusual property


Many borrowers have fairly straightforward mortgage requirements – they are employed and can easily prove income, while the property is of a standard type and construction. Lenders are usually happy to lend to these borrowers so obtaining a mortgage is not too difficult.

However, not everyone is in this position, which is where mortgage brokers such as Anderson Harris come in. If you have a mortgage application that is even slightly out of the ordinary – you are buying a studio flat, for example, or a flat above a shop, then we can identify the lender most likely to lend.

As far as lenders are concerned, the main issue is resale value. You may be prepared to buy a studio flat or one above commercial premises, but would someone else feel the same if the lender had to repossess your property and sell it on? Anything with a limited resale market, such as properties with short leases or those with shared access, ring alarm bells for lenders.

If you are buying a property of unusual construction, such as a thatched cottage or converted barn, smaller building societies, who consider applications on a case-by-case basis, will be a better bet than high-street lenders. It often comes down to the individual case. A flat above a pub in Chelsea or another prime location may be acceptable to a lender due to high demand for the area and potential ease of reselling the property. The same cannot be said of ex-local authority properties and those with unusual characteristics.

Lenders often make clear stipulations regarding what they will and won’t lend on but increasingly they will rely on the mortgage valuer’s comments regarding value, desirability and resale. Borrowers will require a specialist lender in many of these instances and should use a broker to identify the one most likely to be sympathetic to their particular situation.

Adrian Anderson
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Adrian Anderson

Are interest rates set to rise sooner rather than later?


The Bank of England has warned that interest rates may have to rise more quickly, and perhaps more steeply, than markets had thought. Subsequently, the majority of City analysts now expect a rate rise in May, with some expecting interest rates to rise to 1 per cent by the end of this year.

However, despite this hawkish turn, there is no need for borrowers to panic. At the same time as making the above comments, Governor Mark Carney also suggested that a return to normal interest rate levels of around 5 per cent, may never happen. And mortgage rates are still at record low levels, which means there has never been a better time to fix your mortgage. Five-year fixed rates can be secured at around 1.7 per cent and represent better value than shorter terms deals for borrowers whose circumstances are unlikely to change in the near future. Although shorter term fixes and trackers are more competitively priced, the benefit is likely to be short lived with the need to re-finance again in a climate of rising rates.

The problem may arise for those borrowers on their lender’s standard variable rate who can’t remortgage elsewhere. With lenders such as Santander introducing lower SVRs for new borrowers there is a case for arguing the toss for being allowed to move onto a lower rate in the interests of ‘treating customers fairly’.

Whatever your situation, seeking advice is crucial.

Jonathan Harris
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Jonathan Harris