Help for Mortgage Prisoners
The best place to get started with any help and information on mortgage prisoners can be found on the Money Advice Services website which can be found here; https://www.moneyadviceservice.org.uk/.../help-for...
but what we have also done is try to put some helpful information here as well to try and make things a bit easier for you.
Are you a Mortgage Prisoner?
There are a couple of ways to know whether you are a Mortgage Prisoner or not. The simplest one is that you should have received a letter from your lender informing you that you could be a mortgage prisoner and there could be better deals out there for you. The FCA (Regulator of the Financial Services Industry) made it a requirement for these letters to be sent so that you would know.
Some lenders that will accept applications from Mortgage Prisoners will actually require a copy of this letter as part of the application process.
The other way to tell is if you are with what is known as a "Closed Book" lender. A common example would be if you had an old Northern Rock mortgage and it was transferred to companies such as NRAM, Landmark and Heliodor. These are called closed book lenders as they do not offer New mortgage products so you will forever remain on a Variable rate mortgage with this lender and likely at a much higher rate of interest then what is available on the market
What Has Changed to Help Mortgage Prisoners?
The biggest problem for Mortgage Prisoners to be able to get a new mortgage has appeared to be the affordability restrictions of the lenders now.
When you took out your mortgage it may have been with a very small deposit and when lenders were not as strict with how much you needed to earn to get the mortgage that you were asking for.
However the market has now become a lot tougher but what the FCA has now said, is that those lenders who can help Mortgage Prisoners can now operate what is known a "Modified Affordability Assessment"
This gives some lenders a bit more leniency to see if you could obtain a new mortgage whilst not being as strict as what would be normally expected.
The lenders will still assess whether the mortgage is affordable to you and most lenders that will consider you also have other requirements such as not wanting to take any additional money out of your property & no missed mortgage payments in at least the last 12 months
How We Can Help
When the FCA announced their help for Mortgage Prisoners they also contacted mortgage brokers requesting who would be willing to help these mortgage prisoners so they could be placed onto a Central List where customers could find a broker to help them.
The reason this is important is that some of the lenders who will accept applications for mortgage prisoners from Brokers that are on this centralised list.
The good news is that we are the only Mortgage Advisers in Huntingdon on the list and one of three Advisers across the whole of Cambridgeshire. We also cover the whole of the UK so for even those outside of Cambridgeshire we can still help.
If you would like to discuss your case and whether we can help you achieve a better deal then please get in touch with us