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First National brings in self-cert discount

First National Mortgage Company has introduced the 2.5 per cent discounted fresh start mortgage.

The mortgage is aimed at homebuyers who are self-employed and who have difficulty in proving their income. Either first time buyers or people who are looking to remortgage can apply for the mortgage.

Fresh start has a 2.5 per cent discount, giving it a payable rate of 7.99 per cent for loans of up to 80 per cent of valuation for the first year of the loan. Applicants can have any number of county court judgements (CCJs). Redemption penalties are four months’ interest in the first year, three in the second, two in the third and one month’s interest thereafter.

The mortgage is not the cheapest on the market. According to Moneyfacts on March 26, 2001, the cheapest one-year discounted self-cert mortgage is the 6.74 per cent mortgage from The Mortgage Business. This has a 0.5 per cent discount for the first year of the loan, giving it a payable rate of 6.74 per cent. This allows up to three CCJs, totalling no more than £1,000. Redemption penalties are three months’ interest in the first year, two months in the second year and one month’s interest thereafter.

Based on a £100,000 mortgage with a loan to value of 80 per cent, London & Country Mortgages says that monthly payments for the First National 2.5 per cent discounted mortgage would be £771.15 a month. The Mortgage Business 6.74 per cent mortgage monthly payments would be £690.28.

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