Skipton Building Society has today announced its return to the First-Time Buyer market and increase of its maximum loan to value to 95 per cent. Skipton, the
Mutually Exclusive will launch on Monday 15 September across Skipton’s branch network. The scheme will allow the higher lending limit where the borrower’s family commits to saving with the Society. This sees a return to ‘normality’ in the approach to mortgage lending – a direct link between savings and mortgage finance. According to CML research, up to half of first-time buyers rely on some parental help with buying a home; many need help raising a deposit. With lenders reducing maximum LTVs, this week Alliance & Leicester lowered theirs to 85 per cent, this problem has become more acute. For many first-time buyers it is the deposit that is the barrier to getting on the housing ladder not affording monthly repayments. In this instance, parents would normally fund that gap in the deposit, possibly from savings or by drawing on equity in their own home. In these cases, parents lose the interest savings would have earned or have to pay more interest on the additional debt. Mutually Exclusive alleviates some or all of that. Mutually Exclusive works by parents making a deposit with the Society of up to 20 per cent of the property purchase price. The Society pays interest on this deposit and takes a charge against it until such time as the loan is repaid or reviewed in light of the equity position. Under Mutually Exclusive, borrowers will be able to borrow up to 95 per cent based on standard affordability criteria and will not pay a Higher Lending Charge (HLC). They will be able to choose a mortgage from the standard Skipton range; those products that previously had a 90 per cent maximum LTV will increase to 95 per cent maximum LTV for Mutually Exclusive borrowers. Commenting, ‘At a time when other lenders are abandoning first-time buyers, we are actively seeking ways to support them. First-time buyers are the life-blood of the market, without them it cannot operate properly. This is a substantive move to help first-time buyers, who have been failed by recent Government announcements. “Mutually Exclusive rewards membership and reflects a link between savings and lending - that has been missing from the market for too long. “By doing what a mutual does best, we have been innovatively traditional. We have taken something that is fundamentally in keeping with the Society’s mutual status but given it a new angle in order to deliver a concept that is very much of our time. “
Date: 3rd, September, 2008
Author: Ben Wilkie
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