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Vesta Packaging launches sub-prime mortgage

Its new start mortgage for purchase and remortgage permits unlimited arrears in the previous 12 months where the current lender is deemed a conforming lender and it will also accept applications, where the current lender is classed as sub prime, so long as any three out of the last six payments have been made and this is available upto 85% LTV.


An unlimited amount of County Court judgments are allowed, in addition to individual voluntary arrangements well conducted for at least six months. Discharged bankrupts can apply. Adverse credit over two years old will be ignored.


Mark Leaper, managing director of Vesta Packaging, says: “There are a large number of individuals who feel they cannot apply for another mortgage because they have arrears. They are effectively excluded from the mortgage market at the present time. This product is designed specifically for them, providing, of course, that they are able to turn over a new leaf and keep up with their payments.”


At a maximum 85% LTV, the rate is Libor plus 5.5% (discounted during the first year by 1%); at 80%LTV, it is Libor plus 5.25% (discounted during the first year by 1%); and, at 75% LTV, it is Libor plus 4.5% (first-year discount of 1.5%). The income multiples that apply are 4.75 x 1st income plus 1 x 2nd , or 3.75 x joint.


The product range, launched in conjunction with Preferred Mortgages, is available as self-certification, for employed and self-employed, with a loading of 0.25%. It can also be used for buy-to-let purchases, but has a loading of 0.5%. Maximum loan size is £500,000 for 80% and 85% LTVs and £750,000 for LTVs up to 75%. The rates on the light adverse schemes start at LIBOR plus 2.5% at 75% LTV with a discount of 1.5% for the first 12 months.


Redemption is 6% during the first three years followed by one month thereafter. The procuration rate is 1.25% and the arrangement fee of £495 can be added to the loan. There are no compulsory insurances. MIG is charged across the product range on all loans that exceed 75% LTV. Between 75 51; 80% LTV it is charged at 5%, between 80.01 51; 85% LTV it is 5.5% and for loans between 85 51; 90% LTV, 6.0% applies. The MIG premium can be added up to 90% LTV.



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