In the last six months Stafford Railway Building Society has doubled its pipeline of mortgage applications – that is people who have received an offer and are waiting to draw down on their mortgage.
The society believes as a mutual it is doing more than its bit to provide competitive mortgages.
However, few applicants have been first-time buyers and apart from the current lack of confidence in the market, Stafford Railway puts this down to the fact that it is not generally thought of as a provider of mortgages for first-time buyers.
There is also a misconception it will not lend outside of its Staffordshire heartland.
Chief executive of Stafford Railway Building Society, Susan Whiting, explained: “The first-time buyer market is crucial, as it sets chains in motion, allowing others to trade up and this group generally needs at least a 90 per cent mortgage with very limited options available for anyone with just a 5 per cent deposit.
“We can lend up to 95 per cent, but the excess over 75 per cent loan-to-value (LTV) has to have additional security, such as a deposit account or equity in another property.
“Where that is not possible we have another option for borrowers with a 10 per cent deposit – the rate is 3.99 per cent which compares very well with other 90 per cent mortgages nationally, and they simply pay a higher lending charge, which is effectively a one-off insurance premium to cover the excess over 75 per cent.”
With consistently one of the lowest standard variable rates available in the UK (from just 3.49 per cent – overall cost for comparison 3.60 per cent APR) Stafford Railway is also enjoying a healthy upsurge in remortgage business across England and Wales.
There are significant savings on offer for borrowers with a reasonable amount of equity in their homes. The society offers a mortgage product that has no excessive arrangement fees, early repayment charges or tie-in periods. You’re also free to make overpayments at any time without incurring any charges.
Susan Whiting added: “Many people are still paying too much on their mortgages and again I wonder if it’s because they hear the banks aren’t lending as readily and, consequently, believe there are no better mortgage deals to be had out there? It’s a shame because lower monthly repayments are readily available plus there is scope to overpay without any penalties and reduce the capital balance much quicker.”
Stafford Railway Building Society is currently offering a refund of the cost of the basic survey fee of up to £500 on all remortgages.
The society also offers just one simple and straightforward buy-to-let mortgage – from 4.50 per cent standard variable rate with a maximum LTV of 75 per cent – but again with no arrangement fees, tie-in periods or complex product features.
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