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Chapter and adverse from Chelsea

Chelsea Building Society

Prospect 2 Year Fixed Rate

Type: Fixed-rate adverse credit mortgage

Fixed term: Until March 31, 2007

Fixed rate: 6.39%

Minimum loan:25,000

Maximum loan: Up to 85% of valuation subject to a maximum of 250,000

Income multiples: Up to 3.75 times principal income plus second or 2.8 times joint

Conditions: Maximum 3,000 in CCJs, current and satisfactory IVAs allowed, discharged bankruptcy and past repossessions considered, overpayments up to 20% a year allowed without penalty

Arrangement fee: 395 plus 245 administration fee

Redemption fee:3% of amount repaid until March 31, 2007

Introducers fee: Subject to negotiation

Tel: 08702 404808

This Prospect mortgage is a two-year fixed-rate mortgage for people with adverse credit.

Priestfield Webber proprietor Malcolm Martin says: “This is an excellent fixed rate for clients who have had previous adverse credit problems up to a maximum of 3,000 worth of CCJs. The redemption period runs to the end of the fixed term, which is superior to many other sub-prime lenders. These usually have a redemption overhang.”

Martin thinks the income multiples are generous. He adds: “A free valuation is available and overpayments up to 20 per cent of the monthly payment are acceptable without any penalty.”

On the downside, Martin complains: “The product is only suitable for clients who can prove their regular income and does not apply to the self-certification market. Although overpayments can be made, interest is calculated annually and as such it cannot be construed as a fully flexible mortgage.”

Scanning the mortgage market for potential competitors Martin says: “Birmingham Midshires has a two-year fixed rate at 6.69 per cent, which will cater for a maximum of 5,000 in CCJs. Although the income multiples are restricted to 2.5 times main income plus second, three times joint income is available if required.”

BROKER RATINGS:

Suitability to market: Good
Flexibility: Average
Charges: Good
Adviser remuneration Good

Overall 8/10

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