Status Near Prime 4.85%
Adverse credit tracker mortgage with discount
Lifetime of loan
1.85% above Bank of England base rate
Up to 90% of valuation subject to a maximum of £250,000
Up to 90% of valuation - up to three times principle income plus second or 2.75 times joint, up to 85% of valuation -,up to 3.5 times principle income plus second or three times joint
Conditions: CCJS in last three years up to a maximum of £1,000, none in last six months, up to one month's mortgage arrears in last 12 months
6% of amount repaid in year one, 5% in year two, one month's interest or notice thereafter
Introducer's fee: 0.75% of original loan
Tel: 01344 477477
GMAC-RFC's Near Prime 4.85% is a base-rate tracker mortgage available up to 90 per cent of valuation and has a 1 per cent discount in the first six months.
Park Row Independent Mortgages managing director Kevin Paterson thinks that overall, the GMAC deal is not a bad product for a specific niche in the market, but he feels there is not a lot in it when comparing to the main competition. He says: “GMAC's new near-prime product is competitive in the minor adverse market, It is essentially a tracker rate with an initial six-month discount of 1 per cent. Many schemes do not allow for minor adverse in the rate they make available but I believe that GMAC's does.”
Paterson believes GMAC's flexible approach to underwriting will be useful. He regards the adviser remuneration of 0.75 per cent as attractive and likes the fact that there is no mortgage indemnity premium required.
Looking at the drawbacks of the mortgage Paterson says: “Given GMAC's approach to underwriting I am disappointed that the loan to value only goes up to 90 per cent. Equally, I think the redemption penalties are particularly punitive and the income multiples are a bit on the low side.”
Paterson thinks competition could come from Mortgages Plc's two-year discount at 4.8 per cent but points out that this deal has an extra year's overhang in terms of early redemption penalties. He also thinks Platform's 4.75 per cent two-year discount could be an alternative to the GMAC product.
Suitability to market: Average
Competitiveness of mortgage rate: Average
Adviser remuneration: Average