Tipton & Coseley BS considers extending expat mortgage offering
Cammy Amaira, director of sales and marketing at The Tipton and Coseley Building Society, told Specialist Lending Solutions that the mutual was at the early stages of its process.
“These are the two options and its logical to look at this as the next step,” he said.
“I’m building the case to take to the board, looking at the size of the market and who is in it and doing all the ground research.
“We’ll present it in the next couple of months and hopefully have a decision then,” he added.
Longer fixed terms coming
Amaira also noted that he would not be surprised if lenders continued stretching the length of fixed rate deals that were available, although that was not something Tipton was able to do yet.
“We’ve seen five-years become seven and then ten, so I wouldn’t be surprised if we get to 15 or 20 years at some point in the near future,” he said.
But he added that if long term fixes become more common lenders and brokers would need to look at different structures for procuration fees.
What your clients need to know about expat mortgages – Ipswich BS
Applying for a UK mortgage when based overseas, especially when you are paid in a foreign currency, is a more difficult process than a regular mortgage application.
The Mortgage Credit Directive (MCD) brought in by the European Commission in 2016 turned many high street lenders off foreign currency mortgages due to the increased administrative and regulatory burden of monitoring foreign exchange rates.
This in turn made expat mortgages much less cost-effective for many of the larger lenders who rely on automated affordability checks, reducing the range of options available for borrowers.
Expat mortgage criteria is often more complex, the application process more complicated, and the products themselves more expensive than a standard UK residential mortgage.
There are essentially two types of expat mortgage – if the property is to be their primary residence, expats will require a residential expat mortgage.
However, if the borrowers are looking to make rental income while they work abroad, they will require a buy-to-let expat mortgage.
In the case of both, lenders will usually require a substantial deposit, and borrowers will be assessed on a wide range of factors to prove affordability and secure the mortgage. They include:
- Proof of residency Lenders will be looking to validate and verify the address history in the country borrowers are residing in. Therefore, it is a good idea to keep any utility bills or bank statements for current and previous addresses for at least the last 3 years.
- Deposit currency Fluctuations in exchange rates means it may be difficult for a lender to ascertain the size of an expat’s deposit if it is held in a foreign currency. For this reason some lenders require the deposit to be moved to a UK-based bank account at the point of application. Evidence of the source of the foreign currency deposit, through bank statements showing the build-up of savings for example, will likely be necessary.
- Repayment currency and applicant’s income MCD means that lenders must carefully monitor changes in exchange rates to ensure that foreign currency loans remain affordable for the borrower in the event of a sudden or dramatic change – for this reason some specialist lenders will have an ‘approved currency’ list, and will look at each application on a case-by-case basis.
Buy-to-let mortgages are assessed on the expected rental income of the UK property rather than the income of the applicant, so this should be enough to secure the loan and show repayments can be met. For this reason, the currency the applicant is paid in is less important.
Masthaven launches online broker portal for short-term lending
Brokers will be able to apply for cases online and then monitor progress through the hub.
Auto-filling forms, document upload facilities and direct access to key documentation are other features of the portal.
The new portal is available to the whole adviser market and has been shaped by broker feedback after a test phase with Masthaven’s premier panel brokers, the lender said.
During the portal’s test phase, Masthaven issued its first bridging loan originating solely from the system’s automated DIP function.
Masthaven said the new facility is part of its ongoing investment in technology.
Account managers remain in the field and the Masthaven team will still be available to support brokers.
Jon Hall, chief commercial officer at Masthaven, said: “We recognise the power of technology and will continue to invest in tools that simplify and speed up the end-to-end loan process wherever possible. But the human element of any loan application is even more valuable to us.
“This is why we have developed our brand-new portal – to improve and enhance broker workloads so they can run their businesses more effectively, freeing up additional time to support customers face-to-face when needed.
“This is just one step we’re taking this year to emphasise that we’re a digitally-focused lender with a human approach to product and lending decisions, fully supporting brokers at every touchpoint.”
Housing minister rejects call for landlord repair deposit
Responding to a written question from Grahame Morris, the Labour MP for Easington, Christopher Pincher (pictured) said the government had not plan to intervene in the direct financial arrangements between landlords and agents.
He also said tenancy deposits must be protected with a government-approved Tenancy Deposit Protection Scheme and cannot be used part way through a tenancy for repair and maintenance work.
Pincher, who was appointed to role of housing minister after Esther McVey was sacked earlier this month, said the government was planning to give more power to tenants to challenge landlords failing to keep their homes in a good state of repair.
From 20 March, the Fitness for Human Habitation Act will be extended to apply for existing tenancies in England.
Introduced in March last year, the law ensures rented homes are hazard-free and secure. Tenants can take their landlord to court if they fail to comply. Only those tenants who signed agreements after 20 March 2019 were covered by the act immediately. This will now be extended to cover statutory tenancies that were in place before this date.
TML reduces rates and makes changes to BTL range
The revised range has a variety of fee options including percentage fee, fixed fee and fee-free options.
Rates start from 2.83 per cent for a two-year fixed at 70 per cent loan to value (LTV) with a 2.25 per cent completion fee. There is also a five-year fixed with a 3.19 per cent rate, down from 3.33 per cent, also at 70 per cent LTV, with a 2.25 per cent completion fee on standard properties.
Houses of multiple occupation (HMO) or multi-unit block (MUB) properties have rates starting from 3.34 per cent for a five-year fix, down from 3.54 per cent, or 3.08 per cent for two-year fixed. Both are at 70 per cent LTV and both have a 2.5 per cent completion fee.
TML also has a new five-year fixed large loans product for applications over £500,000 at 3.29 per cent for 70 per cent LTV and 3.39 per cent for the 75 per cent LTV.
The lender has extended its limited company £500 cashback product to individual, HMO and MUB applicants.
Its free standard legals product has also been extended to limited company applicants as well as individuals, HMO and MUBs.
The lender has also increased the multiple application window for portfolio landlords to six months during which they will not have to pay an additional application fee. Furthermore, they can benefit from a reduced completion fee through the Portfolio Multi Loan product.
Steve Griffiths (pictured), sales director of The Mortgage Lender, said: “The buy to let market is competitive across pricing, criteria and product.
“These changes address all those elements by reducing our rates, simplifying our product range and aligning our pricing for individuals and limited company applicants.”
More than half of landlords snub tax advice – Foundation
Some 40 per cent said they used a tax adviser at lease once year, while seven per cent used one less than this.
Foundation said the online survey of 791 landlords, carried out by BVA BDRC highlighting the high number of landlords without a tax adviser, presented an opportunity and a risk for mortgage advisers.
Mortgage firms, said Foundation, should establish introducer arrangements with tax advisers to help clients get specialist advice. Without tax advice, advisers could recommended unsuitable mortgage products to landlords who did not know the full extent of their own tax situation and what options would be best for them.
Jeff Knight, director of marketing at Foundation Home Loans, said: “Having specialist tax advice should, in our opinion, be a non-negotiable for landlords before they make any decision about what type of mortgage they need, and how they are going to own and finance their properties going forward.
“Advisory firms clearly have a role to play in this and, it is surprising to see so few landlords saying they chose their tax adviser on the basis of their adviser’s recommendation. An introductory arrangement can work for all concerned; advice firm, tax adviser and client and should help provide clarity on the tax position and, subsequently, the mortgage advice.”
Tax advisers recommended by friends
When asked how they found their tax adviser, 42 per cent said they had been recommended one by a friend or colleague or another landlord. However only three per cent said they had taken their business to an adviser recommended by their mortgage broker.
The survey also asked landlords to consider the cost of their buy-to-let mortgages over the duration of 2020. Some 40 per cent felt their mortgage costs would increase, 47 per cent said they felt they would stay the same, while 13 per cent said they thought they would go down.
Those landlords with bigger property portfolios of 20 or more properties, were more likely to say their mortgage costs would go up.
Quarter of landlords go direct to lender
The research highlighted that more than a third of landlords said they had not arranged their last buy-to-let mortgage through a mortgage adviser, with nearly a quarter preferring to go direct to the lender.
Foundation’s research did, however, suggest that those landlords with bigger portfolios were more likely to use an adviser for their purchases, with over 70 per cent of portfolio landlords using their services.
And while 30 per cent of landlords said they plan to remortgage at least one of their properties over the next 12 months, 61 per cent of those said they would expect to use an adviser, 23 per cent would go direct to a lender.
Of those landlords who said they would be adding to their portfolios over the next 12 months, 55 per cent said they would do so through a limited company vehicle and 30 per cent would buy as an individual.
Nottingham BS launches into limited company BTL
Loans have a rental stress rate of 125 per cent at 5.5 per cent, and the lender said there were no major criteria differences to its standard retail BTL offering which brokers are familiar with.
There are seven products in the range: three two-year fixes, three five-year fixes and a two-year discount product.
The lender said its headline products were a two-year fix at 2.76 per cent with a £999 fee and minimum loan of £30,000, and a two-year fix at 2.79 per cent with a 0.5 per cent fee for a minimum loan of £70,000.
Head of intermediary sales Nikki Warren-Dean (pictured) said: “Judging from the conversations we’ve been having with our broker network, many landlords are considering structuring their portfolios on a limited company basis, if they haven’t already, so it’s important we offer competitively priced products to suit their needs and that build on our expertise in the BTL space.”
She noted that brokers will also have their own regional business development manager and direct access to underwriters.
Legal & General Mortgage Club head of lender relationships Danny Belton added: “One of the strong points of The Nottingham’s proposition over the years has been in buy-to-let.
“The move to add limited company to the buy-to-let range is very welcome and will most certainly be embraced by intermediaries.
“As with any mortgage sector, competition and choice is vital, and the criteria and products from The Nottingham really do enhance what is available today.”
Warning for landlords over new Capital Gains Tax rules
Anyone selling a residential property in the UK after April 6 must report it to HMRC and pay any tax due within the far shorter deadline of 30 days.
Those who fail to let the taxman know about any liabilities within this time face a financial penalty on top of paying interest on what is owed.
It’s feared many sellers, such as landlords, could be caught out.
Under current rules, sellers are given until 31 January (or 31 December in the real time tool) in which the gains relate to – for example, someone who sold on 1 April 2014 would not have to report until 31 January ber 2015.
CGT affects properties that have not been used as the owner’s main home, including holiday homes, rental properties and properties that have been inherited.
HMRC is launching a new online service that will allow owners to report and pay any tax owed.
For higher rate payers CGT amounts to 28 per cent of gains on residential property, while basic rate taxpayers pay 18 per cent.
Further changes that will take effect from 6 April are;
- Lettings Relief will be reformed so that it only applies where an owner is in shared occupancy with a tenant;
- The final period exemption will be reduced from 18 months to nine months to better target the exemption at owner-occupiers with one main dwelling. The special rules that give those with a disability, and those in care, an exemption of 36 months will not change.
Mortgage Magic offers CRM platform to small brokers for free
The platform, which incorporates AI technology, helps mortgage advisers to operate their businesses, while maintaining file checks for compliance.
The cloud-based platform offers built-in case tracking, optional electronic ID verification, secure GDPR compliant document storage and encrypted email transmission.
Tanjir Sugar, CEO of Mortgage Magic, said the company was keen to establish strong ties with all adviser firms, regardless of their size.
Small mortgage intermediaries can apply for a free period which can range from a number of months to an indefinite period depending on their particular circumstances. The package also includes the Mortgage Magic app.
He said: “We want to arm small companies with the same cutting edge technology available to larger companies. It was one of the motivations behind my creating this back office system.
“I feel strongly that this should not be restricted to larger companies on the basis of cost but is made available to small intermediaries who may be reluctant to make an investment on the basis of cost.”
Mortgage Magic is available to the wider broker network on a free trial basis which can last between seven days to a month, depending on the size of the firm. Once the trial is over, the cost will depend on the size of subscriptions and the features which have been subscribed to.
Oil tycoon and technology investor Sam Malin recently invested in Mortgage Magic and former Conservative MP Sir Tony Baldry was appointed chairman.
Specialist distributors team up with Castle Trust and Foundation Home Loans
Castle Trust offers short-term finance, second-charge loans, complex buy-to-let products and development finance.
The distributor said it has ‘rapid growth plans’ in place for 2020 which have been kicked off with its expansion into the North of England with the appointment of Simon Bancroft.
Meanwhile, Foundation Home Loans has partnered with packager firm, The Mortgage Trading Company.
The Mortgage Trading Company will have access to Foundation’s range of buy-to-let mortgage products including solutions for portfolio and limited company applicants.
Based in Leeds, The Mortgage Trading Company works with lenders in order to provide solutions for advisers’ more complex mortgage enquiries.
The Mortgage Trading Company also packages residential, second-charge, commercial and bridging finance deals.
Earlier this month, Foundation cut rates by up to 20 basis points on its individual and limited company fixed-rate product range for both single tenancy properties, as well as large HMOs and short-term lets.