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GMAC fights off buy-to-let competition

GMAC Residential Funding has designed a two-year fixed rate buy-to-let mortgage that is available for loans of up to 85 per cent of valuation.

This mortgage is fixed at 6.55 per cent until October 1, 2003 and is not available to first-time buyers. Any number of properties can be bought within a total advance of £1m and the arrangement fee is £395. Borrowers who pay the mortgage off during the fixed-rate period must pay a flat penalty of 5 per cent of the amount repaid.

Investing in property is popular as investors hit by falling stockmarkets are now looking towards bricks and mortar. However, a survey from Birmingham Midshires in August 2001 shows borrowers need to think carefully before jumping on the bandwagon. Around 55 per cent of landlords think finding the right property is the most difficult thing about buying to let and 43 per cent advise borrowers to investigate thoroughly before buying properties.

According to Moneyfacts on August 23, 2001, GMAC Residential Funding is the most competitive deal for mortgages of this type. Birmingham Midshires offers a less competitive mortgage fixed at 6.95 per cent until August 1, 2003 to all borrowers up to 85 per cent of valuation. Like the GMAC mortgage, any number of properties to be purchased within a total maximum advance of £1m.

Birmingham Midshires compares favourably with the GMAC mortgage in terms of its decreasing early redemption penalty and lower arrangement fee. Borrowers who pay off the mortgage pay 5 per cent of the amount repaid in year one as they would with the GMAC mortgage, but pay just 4 per cent in year two. The arrangement fee of £299 is £96 cheaper than GMAC&#39s.


PMI provider appoints new boss

PMI provider Healthcare 4 Life has announced the appointment of Wendy Young as its new chief executive. Young has been with the company since March 2001, previously working as a consultant.Healthcare 4 Life has also added two new benefits, home nursing care and parent accommodation, to its &#394 in 1&#39 group policy.

&#39IFAs must unite before N3 to save loan code&#39

The mortgage code could wither and die if brokers fail to secure co-ownership thr-ough a credible trade association before N3, the Intermediary Mortgage Lenders&#39 Association is warning. Imla chairman John Heron says the mortgage code could be left hanging by a thread unless brokers club together and ensure its future before statutory regulation comes into […]

Skipton buys into protection specialist

Skipton Building Society has hit the acquisition trail again, buying a £4.1m majority shareholding in protection IFA Direct Life & Pensions Services. In its first foray into the specialist IFA sector, Skipton says it has acquired DLPS with a eye to entering the stakeholder market and using its advanced internet technology across its 12 other […]

Standard Life Bank releases new mortgage

Standard Life Bank is launching a new mortgage which pays off 1 per cent of the outstanding capital every two years for the life of the loan. Aimed at retaining existing borrowers, the mortgage has a variable rate of 6.45 per cent and is available as repayment, interest-only or a combination of both. Borrowers are […]


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