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Low risk 95 per cent LTV mortgage scheme to launch in autumn

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  • 17/08/2022
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An initiative which sets out to reduce the risk attached to high loan to value (LTV) mortgages and improve availability for those with small deposits is set to launch this autumn.

Own New has been developed by Market Mortgage, a firm which launched in 2017 to provide a solution to the underserved segments of the high LTV sector. Market Mortgage is backed by professional services firm Capita and offers risk-reduction techniques to suit each lender. It also sets out to improve profitability for mortgage providers. 

Solutions include the option to partner with private investors to share the risks associated with high LTV lending. 

Housebuilders, investors and mortgage companies have signed up to the initiative and the lenders who have partnered with the scheme will be announced in autumn when it becomes available to buyers. 

There are more than 30 builders signed up, including Countryside, Linden Homes and Barratt Developments. Mortgage Advice Bureau, LSL and First Mortgage are among some of the enlisted advice companies. 

Own New offers to help housebuilders sell homes and developers will pay a small fee to the firm on completion of a sale. There is no cost to the customer. 

The initiative is open to people with “non-standard circumstances”, such as the self-employed or those who are yet to build a credit score. 

Eliot Darcy (pictured), founder of Market Mortgage, said: “Own New has been developed in close collaboration with lenders, housebuilders and brokers in a way that works best for all parties. It is simple to use, profitable for lenders, and a cost-effective enabler for housebuilders. 

“The end customer benefits by securing a standard 95 per cent mortgage at a competitive rate by following the usual application process with their lender. 

“We have developed a range of ways to reduce risk and are working with a variety of lenders to find the solution that best suits them.” 

Darcy said a straightforward scheme which was both easy to use and commercially viable for all parties was important. He insisted that nothing would change on the buyer’s end as they would apply for a mortgage in the usual way. 

The scheme is only available on newly built homes. 

He added: “Our aim is to enable people to own their first or next home without relying on a ‘Bank of Mum and Dad’, or on unrealistic expectations of savings or equity. 

“We are on target to have more than 100 developers join the scheme this year, with members ranging from national PLCs to smaller regional housebuilders. It’s important that this is available to all developers in the country, large and small, so lenders can make these mortgages available to many more customers.” 

“Own New can help buyers across the country, whether they are buying a new house or a new apartment. There are no regional variations and no upper price cap.” 

Own New joins the likes of Deposit Unlock and other alternative providers aiming to get more people onto the housing ladder through non-traditional means.

 

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