95 Per Cent Loan Product Launched
One of the biggest problems facing potential home buyers, particularly first time buyers, looking for a suitable home owner loan or mortgage, is that of raising a large enough deposit to meet lenders’ strict rules on maximum loan to value ratios.
Potential home buyers, loan brokers and many financial experts have been calling on banks and building societies for some time now, to start offering higher loan to value products for people wanting to get onto the housing ladder, in order to help get the market moving once again.
The Skipton building society has just announced that it is to start offering a 95 per cent loan to value range of home owner loan and mortgages, which will be available to borrowers directly from the lender, or via the internet, or by using the services of a loan broker or independent financial adviser.
Although the new loan range will be aimed primarily at the first time buyer market, the loans will also be available to anyone else looking to buy a home or to remortgage their existing property. The range of products includes fixed rate loan deals for two, three or five year terms.
Although the products offer a loan to value of 95 per cent with no arrangement fees, the interest rate charged on the loans will be 6.49 per cent, making the products rather expensive over the full term of the loan.
Skipton have said that although the new loan products are available to anyone, they are only offering a limited tranche of funding for these loans, as they do not want to expose the society to too much risk through high loan to value products. As a result of this, it would seem logical to assume that the product will only have a relatively short shelf life, as demand for loans of this nature is likely to be high.
