View more on these topics

This Week’s Dilemma

I am a broker and I’ve done my time in the industry so I don’t like to admit this but I’m confused about how to use fast-track. My client wants to borrow 300,000 with an LTV of 75%. The client’s income is 100,000 of which 45,000 is basic income with the rest being commissions and bonuses. I want to know if I can put this through as a fast-track case.

Alan Cleary, managing director of edeus, says:

You can’t put this through as a fast-track deal – it’s wholly inappropriate. Although the 75% LTV isn’t too far off a mainstream lender’s criteria, your client will need a low LTV to qualify for a fast-track mortgage but it will probably have to be less than 75%. Your client’s income is insufficient to meet mainstream lenders’ policies on income.

Typically, borrowers will have to have a high credit score as well as a big deposit for lenders to decide not to request proof of income. Even if this client wants a low LTV you cannot put a deal through when income is insufficient. Any lender will see that the income is made up partly from commission or bonuses which can only account for 50% of a client’s total income.

But having said that, this is not the first time I’ve heard of someone trying to fit the wrong sort of borrower up with a fast-track mortgage. Fast-track products are, to paraphrase the great Sir Winston, a riddle wrapped up in a mystery hidden inside an enigma. This is a problem we as an industry need to address.

The short answer to this question is that your client needs a self-cert mortgage, and it’s not as if self-cert is a bad option either. We offer a full range of self-cert products available up to 90% LTV as standard so your client’s deposit is well within the boundaries. And given that we offer a maximum loan of 2m, your client’s 300,000 request is comfortably within our policy.


Lenders slammed for dual pricing

Lenders have been accused of mistreating packagers in the dual pricing of direct-to-broker and packaged products.

Salt adds GHL to packager panel

Salt has added GHL Group to its premier packager panel and is pledging to add more packagers in 2007 to increase market share and boost mortgage volumes.

SHIP reveals growth across equity release sector

Safe Home Income Plans has reported drawdown plans to have the biggest growth in 2006, with the rest of the industry following with healthy growth.During Q4 2006 drawdown plans made 89.9m, in comparison to 14.2m Q4 2005, a six and a half times increase of committed new business year on year.The total value of new […]

HBOS may launch another brand to rival DIY lenders

HBOS could launch a new brand to the mortgage market to compete against the growing number of do-it-yourself lenders that have come to market over the past 24 months. Nigel Payne, managing director of HBOS subsidiary The Mortgage Business, made the throwaway remark while talking about the flood of new DIY lenders entering the market […]


News and expert analysis straight to your inbox

Sign up