Changes in lending criteria, for better or worse, featured in this weekend’s financial press. On a positive note, the Sunday Times reported that more options are opening up for freelance and contract workers, with Kensington launching a range of deals specifically for contractors, and high street lenders such as Halifax and Woolwich becoming more welcoming.
Existing homeowners wishing to move their mortgage to a new property may find however that tightening up of lending criteria over the last few years has not benefited them. The Times warned that borrowers will still have to re-apply for their mortgage even if the terms are not changing, and there is no guarantee of acceptance. Changes to affordability calculations and interest only criteria for example, could mean that homeowners are forced to pay an Early Repayment Charge in order to secure a deal with a new lender.
The Financial Times looked at the prospects for ‘Second-steppers’ at a time of rising property prices and lower mortgage rates. Brokers suggested that there is now a much better choice available to those with smaller deposits, but affordability is still an issue.
Elsewhere the Independent on Sunday reported on a new partnership between Barclays and property auctioneers Savills, allowing successful bidders to pay for their new property using the bank’s Pingit app. Experts highlighted the importance of understanding the legal responsibilities of buying at auction.