Pink Home Loans
Amber Feather Adverse 2-Year Fixed
Type: Adverse credit fixed rate mortgage
Fixed term: Until January 31, 2010
Fixed rate: Full status up to 85% of valuation – 7.14%, up to 75% of valuation – 7.04%, self-cert up to 85% of valuation – 7.54%, up to 75% of valuation – 7.44%
Minimum loan: £25,000
Maximum loan: Up to 88% of valuation subject to a maximum of £400,000, up to 80% of valuation subject to a maximum of £400,000
Income multiples: Two borrowers – Up to four times principal income plus second or 3.25 times joint, three borrowers 2.75 x joint, four borrowers – 2.5 times joint
Conditions: Free valuation
Arrangement fee: £999
Redemption fee: 6% of the mortgage balance in the first two years
Introducer’s fee: 0.8% of original loan subject to a £7,500 maximum
Tel: 08707 590170
This fixed-rate deal is available for full status and self-cert applications, with rates starting from 7.04 per cent.
Putting this product into its market context Mint Financial Services IFA Adrian Kidd says: “At the moment the adverse market is effectively closed after the Northern Rock scandal and the credit crunch. Libor rates rising significantly so any products in this market are very welcome.”
Kidd thinks the rate for full status is very good although it does come with a need for 25 per cent deposit. “The self cert rates are also okay but it seems that many lenders are checking a lot more self-cert cases, so you would want to clarify Pink’s new criteria, if any, for the application process,” he says.
Discussing the potential drawbacks Kidd says: “The adverse criteria is only one missed payment for the year. The chances are that clients who are in this bother will have missed more than one payment, so the product is not suitable for them.
Scanning the market for the main competitors, Kidd observes there is an abundance of rates under 7 per cent for self-cert options from Beacon, UCB, BMS and The Mortgage Works. “Some rates are around 6.5 per cent,” he adds.
Suitability to market: Average
Competitiveness of rate: Poor
Adviser remuneration: Good