Mortgage applications continue to fly in, and whilst the property market is buzzing and enquiry levels continue to grow, mortgage lenders themselves have continued to retreat somewhat as the Summer holiday season adds to the pressure they are already under.
Many have reported record levels of mortgage applications and are creaking at the seams in terms of service, with a couple of lenders taking anywhere between 7 and 14 days to review cases being sent in them to them.
It is important to say that we all understand the reasons for this and it is not a case of going around generally blaming lenders for everything, (plenty of time fo that :-)), but now we all need to understand and do what we can to help in this difficult situation. I know that lenders are working exceptionally hard to deal with the situation and have done remarkably well all things considered.
For those buyers with only a 10% deposit the market is very tricky at present with only a couple of lenders offering this, and those that are offering either a limited tranche of product availability each day or long delays in underwriting.
There are also some rather strange underwriting requests also, with Nationwide for example insisting that those with a 10% deposit are not totally reliant on a parental gift for this and must prove that they have saved 75% of this themselves.
As we mentioned in The Sunday Times this weekend, “They are saying that if first-time buyers rely on their parents, and the parents have changes in their savings and income, then that makes it more risky.
“I assume that they have taken the view that the parents of children who have only a 10 percent deposit may be less better off, which would explain why they are willing to accept the Bank of Mum and Dad when deposits are over 15 percent.”
In other words, it’s a real minefield out there at the moment with lenders changing criteria and upping rates all the time. Yes, upping rates!
Even though interest rates are low generally, lenders feel like they have to increase rates to stem the flow of business they are receiving at the moment.
So, it is all a case of managing expectations now but let’s not forget that lenders still need to lend. For every delayed case we are seeing many come through in record time for those A1 clients. It is all about picking the lender carefully now and this is where the skill of the broker is paramount.
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.14%, (3.20% APRC) and 5-year fixes from 1.34%, (2.80% APRC) whilst variable tracker rates are around from 1.24%, (3.30% APRC).
Those looking at Buy-To-Let can now obtain products from 1.22%, (4.80% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).
To speak to one of our friendly advisers call us on 020 7220 5110 or contact us here.