Whilst I was away I was informed that Mortgage Express, one of my favourite mortgage lenders had overnight pulled the plug on their instant remortgage product. Mortgage Express were the only major mortgage company to allow an investor to remortgage their property before owning it for 6 months. An instant remortgage product allows investors to remortgage a property to 85% of its surveyed market value. This is regardless of purchase price.
For example if you purchased a house for 60k and the surveyor agreed that the property is actually worth 100k the bank (mortgage express in this case) would lend you 85k as a remortgage on the day of completion. All you had to do would be to buy with 60k cash then the next day you would be given it back plus an extra 25k.
Of course not everybody has 60k in cash sat in the bank, this created a need for bridging loans companies to lend the cash to purchase the property for 1 day creating easy NMD (no money down) purchases. This market was very competitive with companies charging Â£500 to lend you up to 200k for one day. These bridging loans companies are not required as there is no decent provider for instant remortgages.
There are of course other companies who will do instant remortgages such as Natwest and The Bank of Ireland, but reports from other investors indicate that they are slow to offer and their rates are completely rubbish. Are there other ways to buy property NMD?
as a keen BTL investor I have used many different mortgage companies and here is my current list of best and worst lenders. they are rated by a mixture of speed to offer, speed to complete, rate of their products.
1. BMS – Birmingham Midshires.
speed to offer is excellent and no problems with completions either. i’ve had valuations booked the same day as my broker has instructed them. They products are amongst the best out there. the only thing that lets them down is they only offer 85% of purchase price for their instant remortgages.
2. MX – Mortgage Express.
Speed to offer is good, but they sometimes have delays, no problems with completions. Product wise they are quite competitive and used to offer a really good five year deal. They are one of the only lenders who do instant remortgaging to 85% Value of property.
3. TMW – The Mortgage works.
Speed to offer is ok, overall speed is consistent. They have good products for limited co’s but require you to use their solicitors to check everything out. no instant remortgage.
4. Bristol and West Mortgages.
Speed to offer is average, overall speed is consistent. Some of their products allow the rental to be 100% of the mortgage payments, which makes it easier for some deals to stack. no instant remortgage.
5. TMB – The Mortgage Business.
Speed to offer is slow, overall speed is consistent. They have a product that has NO rental calculation allowing you to purchase by using 15% deposit. The rates are not brilliant and you can only have one of these at any one time. Perfect if you are buying a property to sell on ASAP as their is no rental calculation which means you can buy more expensive properties.
I only have one at the moment read: http://www.dave.so/property-investment/gmac-cannot-meet-completion-dates-rubbish/
GMAC – RFC
Speed to offer is quick. speed to completion is terrible, they have not managed to meet 1 completion date in 3 mortgages with them. The rates are average, but they offer a high LTV of 89% and also have a 100% rental calculation making this company useful for deals that are hard to stack.
even though i keep going on about them and their bad punctuality with completions i may use them again as they have a useful product.
slow mortgage offers
mortgage express who i use quite often for my mortgages seemed to have slowed to a halt these last few weeks.
I have a few deals going through that are waiting on mortgage offers from mortgage express. they normally are quite fast in making their offers and can normally get them out in a week from them recieving the valuation.
my broker tells me that they have been flooded with mortgage applications lately and that they are about 3 days behind. so is that 3 days behind the week that they are already behind? i think that the sudden surge of mortgage applications may be because of the recent rates rise. people are trying to get their fixed rate deals in before mortgage express up there lending rates to reflect the hike in the base rate.
it also doesn’t help that my solicitor is on holiday too. but i suppose without mortgage offers she cannot do anything with my purchases.
mortgage express are part of bradford and bingley and i think they have a very large percentage of the buy to let mortgage market.