The company, recently purchased by Brightstar, has been working with Castle Trust, Kent Reliance, Saffron Building Society and a host of regional building societies since January to design innovative mortgages.
Launching today to around 50% of the intermediary market, Private Label by Brightstar is offering three products and a bidding platform for regional building societies to review clients’ circumstances and compete with each other to offer the borrower the best mortgage terms.
What it costs and proc fees payable
The mortgage client is charged £99 upfront when an application is received. When an offer is issued, the client is charged a further £400. Private Label receives a procuration fee from the lender and passes on half to the broker. This will typically range from 0.35% to 0.50%. Apart from sharing the proc fee, there is no other cost to the broker.
Talking to Specialist Lending Solutions (SLS), CEO of Brightstar Rob Jupp said he came up with the idea of a bidding service at the British Specialist Lending Senate, an event held by SLS, the sister title of Mortgage Solutions.
He said: “After watching a panel debate of several small building societies, I heard them say they wished they had access to nationwide mortgage applications , rather than just regional, because the manual underwriting approach meant specialist lending was a strength found in the smaller mutual. That’s when I came up with the idea of Mortgage Tailor.”
Societies on the Mortgage Tailor panel include Family Building Society, Bath, The Mansfield and Penrith Building Society.
The enquiry is received by Brightstar and sent to the Mortgage Tailor platform where lenders are given 48 hours to assess the deal and come back with their most competitive rate and terms. The bids are given back to the broker who assesses which is most suitable for their client.
The Self Builder
Saffron Building Society is the money behind this product, which will allow high net worth self builders to borrow at a rate of 3.99%.
Self-builders can borrow up to 65% of the purchase price of the plot, 100% of the build costs and a maximum of 75% of the gross development value.
Saffron will have a dedicated expert reviewing the applications and offer drawdown terms which suit the client’s project.
The Temporary Letter
Born out of the growing trend for landlords to look to short-term lets such as Airbnb to obtain the maximum yield from their properties, Castle Trust and Private Label have come up with a product which will allow borrowers to be assessed for a mortgage in two ways.
The borrower can either be assessed on the previous six months’ cash flow to show this is a business they have a proven track record in, or if they are new to short-term letting, they will be subject to an interest coverage ratio of 150% of the pay rate which is 6.69%.
Any shortfall can be made up from personal income or assets. The maximum loan-to-value is 75%. An Assured Shorthold Tenancy (AST) agreement is not required.
Matthew Wyles, executive director at Castle Trust Capital, said: “A weakening pound and the growth of platforms like Airbnb and Tripadvisor mean that the holiday rental market is booming. The recently published Holiday Property Investment Report declared that the UK has 165,000 holiday lets, with the average property generating double the annual rental income of a typical buy to let property in 2016.
“Many traditional buy to let mortgages do not accommodate short term rentals as they require an AST to be in place, so this product provides a fresh opportunity for landlords to invest in an attractive, high-yield market niche.”
The Day-One Remortgagor
This product allows clients to remortgage their buy-to-let property before the usual six-month period. Funded by Kent Reliance, it allows borrowers using different acquisition vehicles such as bridging loans to remortgage and raise funds within one day of legal completion. The remortgage is available up to 75% LTV with a £200,000 minimum loan size, priced at 3.34%
How to get access
Brokers must be part of a network which is partnered with Private Label. These are MAB, Intrinsic, Positive Solutions, Paradigm, Simply Biz, Mortgage Force, Alexander Hall and John Charcol.
Products will appear on 27Tec, Mortgage Brain and IRESS sourcing systems and will be listed as Private Label by Brightstar, rather than the name of the lender.
Second charge, bridging and commercial products will follow in further staged launches.