Saffron SVR mortgage HELP!!!!

jamberl

Hi,

I have bad credit but a deposit of almost 40%. Unfortuantaly we cannot get a mortgage because of two historic settled defaults. I have tried leeds and now have a motgage brooker.

Saffron will offer us the money we want but on a 35 year term (we wanted 25) at 5.39% (leeds was 3.7ish). The are also charging 1% fee for the mortgage even though the website says the arrangment fee is £995 (looking to borrow 235k). Apparently the broker says they charge this for higher risk customers?

Anyway i always wanted a fixed rate as i do not want my payments to start increasing. With the variable rate at 5.39 is it likely to rise and does anybody know how long i am tied into this mortgage? Are there penalties if i leave? etc etc

Also what are your thoughts on this company?

Thanks!!!

opinions4u

jamberl wrote: »

Hi,

I have bad credit but a deposit of almost 40%. Unfortuantaly we cannot get a mortgage because of two historic settled defaults. I have tried leeds and now have a motgage brooker.

Saffron will offer us the money we want but on a 35 year term (we wanted 25) at 5.39% (leeds was 3.7ish). The are also charging 1% fee for the mortgage even though the website says the arrangment fee is £995 (looking to borrow 235k). Apparently the broker says they charge this for higher risk customers?

Anyway i always wanted a fixed rate as i do not want my payments to start increasing. With the variable rate at 5.39 is it likely to rise and does anybody know how long i am tied into this mortgage? Are there penalties if i leave? etc etc

What does your broker have to say?

They should be explaining this to you.

They should be clarifying the charges they make and those that the lender makes.

jamberl

the broker has been very good and honest, i am just waiting to hear back from him on the points above. This has all only happened in the last few hours but i would be interested to know if anybody else has a similar mortgage or experaince with this bank etc.

The 5.39% is high but i dont mind if i can switch in a year or three at most - what i dont want is to be tied in for a long time and the rate start to increase...are rates likely to increase? So many questions,,,

GMS

When were the defaults and for how much? When were they satisfied?

Are the defaults the only blemish on your credit history?

35 years suggests affordability issues. What are your salaries?

jamberl

defaults were about 2 years and 10 months ago and one was almost 5 years ago. They are both settled in full but apparently a better lendor would only lend to us once we had 3 years with no defaults - that comes into play in feb! Still no guarentees they will lend. These were satisfied within the last 6 weeks.

Affordability - we earn 53k between us - there is other income they cannot take into account though. A 25 year term is affordable but saffron want to be safe it appears.

Any ideas on how we should proceed? Thanks

_Andy_

Not quite sure what advice you're after. Broker has found you a product which you can accept or decline.

GMS

Look at your Illustration to see how long you are tied in, if any.

Why has the broker recommended a variable when you wanted a fix? Saffron do not offer a fix but why not other lenders? Did the broker provide you with a sourcing list for the fixed produact and detail why lenders were unavailable to you?

jamberl

Illustration - does not say if tied in

Broker knows we want fixed but the better lenders will not lend to us, or for the amount we need. He doesnt want to appy to a high st bank as would leave a footprint on our record and put us in a worse position.

Havent seen a sourcing list. Thanks for all the help, any advise is much appreciated.

opinions4u

Looks like an SVR mortgage with no ERC.

http://www.saffronbs.co.uk/mortgages/variable-rate-mortgages

I'd guess the 1% arrangement fee is applied by the broker, not the lender.

jamberl

thanks very much... any idea if we can change mortgage after say a year to get something more economical or would we face a penalty or does it say we are tied in for x years.

The mortgage broker is off for the holidays now but in touch with us by emails - as you can see i am keen to know as much as poss as quick as poss!

GMS

Look for the section which says 'What happens if I repay the mortgage early' or something similar. This will state any Early Repayment Charges.

As has been said it looks as though there are none but without seeing the product it is impossible to be 100% sure.

In theory you could refinance in 6 months subject to meeting criteria but this will involve fees. If there is a more appropriate priduct for your needs then better to arrange it now.

Not saying there is but as you wanted a fixed rate there should be explanations as to why this wasn't possible.