GENESIS HOME LOANS
Discounted-rate adverse credit mortgage
Until November 30, 2005
Full statues 5.5%,
Up to 80% of valuation subject to a maximum of £1m full status, £500,000 self-cert
Up to 3.5 times principal income plus second or three times joint
Maximum £5,000 in CCJs or three months' arrears in last 12 months but none in last three months for self cert and one in last three for full status applications, IVA satisfied, bankruptcy discharged
6% of mortgage balance in first three years, thereafter one month's interest or notice
Up to 1.25% of original loan subject to £500 minimum
Tel: 0870 2421213
Dolomite, part of the Minerals range from Genesis Home Loans, is a discounted-rate adverse credit mortgage available for loans up to 80 per cent of valuation.
Charcol senior technical adviser Ray Boulger explains that this deal is specifically available to those with medium adverse credit. He says: “The 2 per cent discount is at the top end of the range for this type of product and is for well over a year, giving pay rates of 5.5 per cent for full status and 6 per cent for self-cert borrowers.”
Boulger likes the fact that Genesis will ignore all CCJs over 2 years, historic arrears over 12 months old and does not require an explanation for CCJs. He considers the income multiples in line with the market, although they take into account 100 per cent of guaranteed or regular commission as long as the applicant has been with their employer for 12 months.
Boulger says: “At £395 the arrangement fee is standard. MIG is payable on all loans over 75 per cent. Some lenders in the sub-prime market do not charge MIG, even to 95 per cent, and the MIG is a significant extra cost. As most borrowers applying for these deals are unlikely to have a 25 per cent deposit for equity this means that MIG will be payable on most applications.”
In Boulger's view the redemption charge is typical but he adds: “However an initial discount, reverting to an SVR likely to be higher by the end of next year, with a three-year lock in period is not the type of product we would recommend. Not only is a 6 per cent penalty hefty, it is a shame that the lender includes the old trick of requiring a month's notice or one month's interest thereafter.”
A penalty-free part repayment facility is something Boulger would like to see as this would be useful for borrowers keen to keep their mortgage and costs down.
Scanning the market for likely competitors Boulger says: “Some clients with only light adverse credit will be able to get mainstream rates if they use a good broker. Several other lenders in the sub-prime market offer similar types of deal to Genesis. BM Solutions, GMAC and First National offer better value deals, without any trailer penalties.”
Suitability to market: Average
Competitiveness of mortgage rate: Poor
Adviser remuneration: Average