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Pink swims in lifetime channel

PINK HOME LOANS

BM Solutions Flexible Self-cert Tracker

Type:
Flexible self-cert tracker

Tracker rate:
1.5% above Bank of England base rate

Tracker term;
Life of loan

Minimum loan:
£25,001

Payable rate:
6.25%

Maximum loan:
Up to 85% of valuation subject to a maximum of £350,000,
up to 80% of loan subject to maximum of £500,000,
up to 75% of valuation subject to a maximum of £1m

Income multiples:
Up to 3.25 times principal income plus second or 2.75 times joint

Arrangement fee:
1% of original loan

Flexible features:
Overpayments, underpayments, payment holidays, lump sum withdrawals, interest calculated daily

Redemption fee: 5
% of amount repaid if mortgage is fully redeemed in year one,
4% in year two

Introducer&#39s fee:
0.5% of original loan subject to £200 minimum and £5,000 maximum

Tel: 08707 590170

The BM Solutions Flexible Self-cert Tracker from Pink Home Loans is a fully flexible lifetime tracker mortgage for borrowers who want to self-certify their income.

Charcol product development manager Elliot Nathan says that this mortgage is not the best on the market, but is the only lifetime tracker available to self-cert borrowers. He says: “This deal is not very inspiring, offering a mediocre rate and a high arrangement fee. This may be because BM Solutions has publicly stated it wants to reduce its self-cert business.”

In Nathan&#39s view, this has relatively few plus points. He complains: “At bank base rate plus 1.5 per cent the rate of interest is not very competitive, it has high redemption penalties and the income multiples could be more flexible. The 1 per cent fee arrangement fee is on the high side and would only make this deal attractive to high net worth borrowers.”

However, Nathan likes some features, particularly the maximum loan to valuation and maximum loan limits for the high net worth market. He adds: “The penalties run only for two years and the flexible features will suit the majority of clients who take this deal.”

In Nathan&#39s opinion, competition could be provides by Northern Rock&#39s seven year tracker at bank base plus 0.8 per cent. He concludes: “Abbey offers a lifetime tracker at bank base plus 0.5 per cent with no penalties. It is available to self-cert borrowers but only up to 75 per cent of valuation and comes with a £499 arrangement fee.”

BROKER RATINGS:

Suitability to market: Poor
Competitiveness of mortgage rate: Poor
Flexibility: Good
Adviser remuneration: Good

Overall 6/10

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