Ipswich Building Society is launching a new programme for the so-called “mortgage misfits” who are looking to switch their lender. “Mortgage misfits”, according to Ipswich’s definition, are most often self-employed, self-builders, older borrowers and people experiencing life changes who have a hard time getting approved for mortgages after the Mortgage Market Review last April. The […]
Ipswich Building Society is launching a new programme for the so-called “mortgage misfits” who are looking to switch their lender.
“Mortgage misfits”, according to Ipswich’s definition, are most often self-employed, self-builders, older borrowers and people experiencing life changes who have a hard time getting approved for mortgages after the Mortgage Market Review last April.
The “transitional arrangements” clause in the new regulations is meant exactly for borrowers who do not meet the new stricter affordability criteria for mortgages. Many lenders offer options to their customers under this clause.
However, for mortgage misfits looking to change their lender the options are extremely limited. Ipswich is promising to address this type of transitional cases with its new programme.
Applicants will have access to all applicable mortgage products that Ipswich has on offer and this can be used for remortgage and purchasing a new home.
Previously, the society was providing this option only to existing customers.
Borrowers interested in the new scheme will have to meet the following application criteria:
- To be considered under transitional borrowers must have held a mortgage prior to 26 April 2014 (when the MMR was introduced), kept up their mortgage repayments, have no change in circumstance and no additional borrowing needs
- They have to fill out a transitional supplementary questionnaire
- They can apply for all standard mortgage products of Ipswich at up to 75 per cent loan-to-value
- Homemovers can be considered under transitional subject to meeting other transitional criteria
- The application must be in the same name(s) as the existing mortgage, except where an extra borrower is being added to the new mortgage application
- Applications where the existing mortgage has been subject to forbearance or arrears in the last 12 months will not be accepted.
- Employed applicants will be required to submit last 6 months payslips
- Self-employed applicants need to have been self-employed for at least the last two years prior to application
- Applicants must have good credit history and not be in adverse credit
All residential mortgages products available from Ipswich Building Society can have transitional arrangements applied to them. Borrowers in England and Wales can apply to the programme directly or through a selected group of brokers. For further information Ipswich has posted information about the new programme online and is also offering customers advice via phone 0330 123 0773.
Paul Winter, chief executive of Ipswich, comments: “We are standing up for mortgage misfits who are often overlooked by lenders who insist on machine-only application processes. It is possible to still give people a choice while retaining a diligent approach to lending.
“Speaking to the financial services sector, I would urge my peers at other lenders to think about making the mortgage market work more effectively for mortgage misfits by offering choices for those who fall outside the norm.”
