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Chelsea builds up self cert

Chelsea Building Society

Self-Cert Two Year Discount Mortgage

Type: Discounted rate self cert mortgage

Discounted term: Two years

Discount: 1.25%

Payable rate: 5.49%

Minimum loan: 35,000

Maximum loan: Up to 85% of valuation subject to a maximum of 500,000

Income multiples: Up to 3.5 times principal income plus second or 2.8 times joint

Arrangement fee: 395 plus 245 administration fee
Redemption fee: 5% in year one, 4% in year two

Introducers fee: Refer to lender

Tel: 08702 404808

Chelsea Building Societys self-cert two-year discounted rate mortgage is available up to 95 per cent of valuation up to 500,000.

London & Country mortgage specialist James Cotton says: “With a current rate of 5.49 per cent, this is on a par with the more competitive self-certification products from the likes of GMAC, BM Solutions and Coventry.”

Cotton feels Chelseas deal will appeal to borrowers who have been self-employed for more than 12 months and those with multiple sources of income. He says: “Although it allows borrowing up to 85 per cent of valuation, Chelsea will apply a higher lending charge for any loan above 75 per cent. Borrowing 100,000 at 85 per cent would mean a higher lending charge of 776 on top of the combined booking and arrangement fee of 640.”

Discussing potential competitors Cotton says: “GMAC has a two-year discount at a rate of 5.45 per cent which is available up to 85 per cent of valuation. Coventry has a three-year discount at 5.29 per cent up to 75 per cent and both deals carry early repayment charges until the end of the discount periods.”

Cotton concludes by pointing out that although the Coventry deal will suit many self-employed borrowers, self-cert deals are not the only option. He says: “A number of major lenders will relax their criteria for low LTV applications and some may require as little as one years accounts, rather than the standard three.”

BROKER RATINGS

Suitability to market Good
Flexibility Average
Competitiveness of mortgage rate Good
Adviser remuneration Average

Overall 7/10

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Platform ticket

The firm is the one-stop intermediary lender of Britannia Building Society and was created from the mer-ger of Britannia subsidiar-ies Platform Home Loans and Verso.

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