Housing Minister Grant Shapps’ call last week for lenders to offer ‘mates mortgages’ to help struggling First Time Buyers prompted a lot of discussion in the financial press. Experts in the Guardian pointed out that most lenders already allow up to 4 applicants to purchase together, but in many cases only the 2 highest incomes are taken into account, so lending power can still be limited. The Independent on Sunday also highlighted the importance of seeking legal advice before proceeding, in order to set out how much each person is contributing to the purchase and how the equity will be split.
For those who already have a mortgage, and want to move property, there are a different but equally restrictive set of problems. The Times reported that borrowers wanting to port their mortgage across to a new property are struggling to meet new lender criteria due to falling house prices, changes in employment and stricter income multiples. Anyone with an existing interest only mortgage can also find themselves unable to move unless they change to a repayment mortgage at a much higher monthly cost. Experts advised anyone in this situation to first contact their existing lender and find out what their options are before considering paying a hefty Early Repayment Charge to leave.
Elsewhere the Independent looked at the improving Buy-to Let market and gave tips for anyone considering renting out their property, while the Financial Times suggested that borrowers experiencing poor rates of interest on their savings may wish to consider an offset mortgage.