Added: 10 November 2017
Ipswich Building Society introduces ‘SOS’ mortgage range for borrowers requiring credit repair
Products designed to help home-owners get back on track
Ipswich Building Society has introduced an SOS mortgage range, comprising of three new credit repair products to assist those who would like to improve their credit profile and regain access to the standard mortgage market. Each product includes a credit repair guarantee which pledges that borrowers who have made all payments on time over the initial discount rate period can transfer from the specialist SOS product to any of its standard mortgage retention products.
Using its expertise and established manual underwriting processes, where every application is reviewed by a member of the team rather than relying on machine ‘sorting’, the Society is to offer a more flexible approach to those who would otherwise fall outside of the brackets defined by many larger mortgage lenders.
The SOS mortgage range includes the following products for increasing tiers of credit repair, exclusively available via the Society’s Prestige intermediaries and selected partners:
• A Near Prime 2 year discount product at Standard Variable Rate (SVR) currently 5.24% with a discount of 0.95% giving a current pay rate of 4.29%, with a maximum Loan To Value (LTV) of 75% (5.3% APRC*), £250 application fee and £1,000 completion fee.
• A Feather Prime 2 year discount product at SVR currently 5.24% with a discount of 0.55% giving a current pay rate of 4.69%, with a maximum LTV of 65% (5.5% APRC*), £250 application fee and £1,750 completion fee.
• A Credit Recovery 3 year product at SVR currently 5.24% plus 0.95% giving a current pay rate of 6.19%, with a maximum LTV of 60% (5.9% APRC*), £250 application fee and £2,250 completion fee.
All new products are available for purchase and remortgage, excluding first time buyers, with a £350,000 maximum loan amount. Products will benefit from the Society’s usual 50% overpayment facility, where payments and redemptions in excess of this will be subject to a charge. For overpayments in excess of 50%, a 3% early repayment charge will apply calculated on the overpayment amount. For early redemption of the loan, a 3% charge applies, calculated on the original loan amount. A £35 CHAPS fee and a valuation fee based on the property’s value also apply.
Commenting on the launch, Richard Norrington, CEO at Ipswich Building Society said: “This launch strengthens our commitment to tackling diversity in the mortgage market.
“Our manual approach to underwriting, at the heart of our mortgage business, provides the flexibility to consider applications from borrowers deemed to be ‘mortgage misfits’ by many other lenders. By offering a credit repair guarantee we are offering the opportunity for many people facing credit repair to get back on track.”
*APRC (Annual Percentage Rate of Charge): The annual rate charged for borrowing expressed as a percentage over the term of the loan.
Product Representative Examples
Near Prime
A mortgage of £122,450.00 payable over 25 years initially on our Standard Variable Rate currently 5.24% with a discount of 0.95% until 2 years from the date of completion, and then on our Standard Variable Rate for the remainder of the mortgage term would require 24 monthly payments of £671.73, followed by 276 monthly payments of £734.81. The total amount payable would be £219,434.08 made up of the loan amount plus interest (£95,444.08), an application fee of £250, a completion fee of £1,000, a valuation fee of £160, a mortgage funds release fee of £35 and a mortgage discharge fee of £95. This example assumes the completion fee and mortgage funds release fee are added to the loan and that interest is charged on these fees over the mortgage term The overall cost for comparison is 5.3% APRC representative. [This representative example is based on assumptions that the loan would start from 19 October 2017]
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Feather Prime
A mortgage of £122,450.00 payable over 25 years initially on our Standard Variable Rate currently 5.24% with a discount of 0.55% until 2 years from the date of completion, and then on our Standard Variable Rate for the remainder of the mortgage term would require 24 monthly payments of £704.00, followed by 276 monthly payments of £741.21. The total amount payable would be £221,974.96 made up of the loan amount plus interest (£97,234.96), an application fee of £250, a completion fee of £1,750, a valuation fee of £160, a mortgage funds release fee of £35 and a mortgage discharge fee of £95. This example assumes the completion fee and mortgage funds release fee are added to the loan and that interest is charged on these fees over the mortgage term The overall cost for comparison is 5.5% APRC representative. [This representative example is based on assumptions that the loan would start from 19 October 2017]
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Credit Recovery
A mortgage of £122,450.00 payable over 25 years initially on our Standard Variable Rate currently 5.24% plus 0.95% until 3 years from the date of completion, and then on our Standard Variable Rate for the remainder of the mortgage term would require 36 monthly payments of £818.22, followed by 264 monthly payments of £752.89. The total amount payable would be £228,743.88 made up of the loan amount plus interest (£103,483.88), an application fee of £250, a completion fee of £2,250, a valuation fee of £180, a mortgage funds release fee of £35 and a mortgage discharge fee of £95. This example assumes the completion fee and mortgage funds release fee are added to the loan and that interest is charged on these fees over the mortgage term The overall cost for comparison is 5.9% APRC representative. [This representative example is based on assumptions that the loan would start from 19 October 2017]