Mortgage prisoners will now be able to apply for a remortgage with the Halifax under the Financial Conduct Authority’s (FCA) new affordability assessment rules in helping mortgage prisoners switch to better rates.
Halifax will accept applications of up to 75% loan to value (LTV) and borrowers must have a letter from an inactive lender confirming they are a mortgage prisoner, the re-mortgage must be on their main residence with no extra borrowing.
After the FCA announced changes to affordability assessments, lenders can now apply these rules to specific borrowers who are up to date with their re-payments, want to stay in the same property and that they do not want to borrow extra money.
Mortgage administrators must contact mortgage prisoners by 1st December 2020 to inform them that they can switch and direct them to products available with the new affordability assessment in place.
This is fanatastic news and we look forward to more lenders coming on stream.
It is a sad fact that 'loose' lending policy that triggered the credit crunch crisis of over 10 years ago then trapped borrowers into mortgages that they could not escape as new, tighter lending restrictions then applied when borrowers came to remortgage but found they could not due to stricter lending rules as part of the Mortgage Market Review and mortgage affordability tests not just for today but also new, affordability 'stress' tests to check whether you could still afford the mortgage payments even if interest rates went up.