Together/Blemain Mortgage Query

katlyall

Hello,

Our daughter and partner are looking at getting a mortgage and due to a number of issues Together lenders are one of the only choices they have - 3.59% fixed and then 4.79%+base rate SVR.

Now if you google reviews on Together and their previous brand Blemain - you only get terrible war stories warning you away, these largely seem to be from people that have fallen behind and then get in trouble and there being no humanity shown. We/they can live with that as long as everything else is above board if payments are kept up?

However there are a few common points in reviews such as being hard to contact, problems with duplicate very high priced building insurance, hidden admin charges added on everywhere etc... And they seemed to top the most complained about lender in the past...

I have the following questions really:

1. Is this a safe mortgage to take out as long as there are no problems keeping up payments at the high rates?

2. The package they offer states their variable rate is 4.73% above base rate. Now I know base rate can/will change, but can that 4.73% be changed during the 25 year mortgage? That's how I can see this going really wrong if they are a bad lender and hike that up after the fixed term finishes.


3. Is it possible to say if they will offer a new fixed rate after initial term that is less that their SVR? i.e. if 4.79+2 = 6.79% SVR - could they expect a new fixed rate of 4% if they stay with the same lender? Or will it be higher than the SVR?


Thanks for any help! Just trying to help them manage risk.

amnblog

Without causing offence here the first thing to say is that Together specialise in lending for problem cases.

There borrowers often have further problems down the road and you would expect plenty of horror stories online as a result.

If your daughter is using Together she is being advised to do so by a Broker and that is the best place to address these questions.

If better options are sought following the fixed rate the financial problem needs to improve over the period. A specialist lender like Together it no one you want to be with long term as it will be expensive either way.

katlyall

Thank you - understood. I guess I was more asking in the wider sense of how regulated the non-base-rate part of the SVR might be? And if you re-mortgage with the same lender is it typical for new fixed deals to be better or worse than their current SVR?


As long as the the lender does there bit in terms of fair-administration I think it should be ok for them.

AnotherJoe

This seems to be weighted against the very people its supposedly helping. Given they have / have had financial issues, they are accepting very high interest rates which increases the financial pressure on them, and these are people who seemingly have not been able to cope with financial pressure.

Do they not have time to get themselves out of their financial difficulties before they start learning to swim while holding a 20lb weight? eg why get a mortgage now? Whats the rush? And I understand there might be one. But maybe there isn't.

Thrugelmir

katlyall wrote: »

And if you re-mortgage with the same lender is it typical for new fixed deals to be better or worse than their current SVR?

That will primarily depend on the cost of money to the lender at the time. Fixed rates aren't always below that of the SVR.

ACG

1. Is this a safe mortgage to take out as long as there are no problems keeping up payments at the high rates?

2. The package they offer states their variable rate is 4.73% above base rate. Now I know base rate can/will change, but can that 4.73% be changed during the 25 year mortgage? That's how I can see this going really wrong if they are a bad lender and hike that up after the fixed term finishes.


3. Is it possible to say if they will offer a new fixed rate after initial term that is less that their SVR? i.e. if 4.79+2 = 6.79% SVR - could they expect a new fixed rate of 4% if they stay with the same lender? Or will it be higher than the SVR?

1) Together are regulated like any other lender for residential Mortgages. The "problem" is that Together also do non regulated Mortgages which are business loans. People often take out business finance and expected to be treated the same way as an individual but that is not the case. There is not the same level of protection on those mortgages and they will treat it as business if you go in to arrears.

A regulated Mortgage should be fine providing you both keep your end of the agreement.

2) The rate is linked to whatever base rate it is linked to. If that rises then the 4.73% rate will rise also. Likewise if it goes down, so will the 4.73%.

3) Together know they are a short term option and that is what they want. Most people who use them do so for 1-2 years max and then move on once their credit has cleared up a little. I think most people I have placed with Together have stayed with them less than 2 years. There are usually no Early repayment charges on their products.

katlyall

Thanks very much for the detailed reply, that makes sense. So if they do have to stay with them longer than 2 years - the regulation will prevent them saying it's now 10% + base rate? Or could they do that if they decide they'd like to milk it?



If we assume interest rates might rise to 2% after their fixed rate ends, that would be 4.73+2 = 6.73% SVR - worse case they can hold out with our help to 9%. But this is likely a 10 year deal before going else where. As long as they can't just hugely inflate the interest rates more so than they already are I think we're content it's a doable option for them.

LRmortgage

Together can make their SVR whatever they like. This is totally controlled by them. So while they cannot change the fixed rate during the agreed product term, the SVR in theory could be 13% + base rate. No one including Together can make that promise to you.

However, credit repairs over time. So... as mentioned above. If they must borrow now, they need to do everything to get their credit repaired over the next few years, in order to move to a cheaper, more mainstream lender ASAP.

[Deleted User]

I think the 4.73% is fixed into the contract - you agree to "BBR + 4.73%" therefore it will always be BBR+4.73%. The 4.73% element can't just change to 10% (but the overall rate could, if base rate rose to 5%+). If it was a SVR on one of the other products (e.g. 6.37% on prime) then yes it could just change willy-nilly

The key point is that the clients shouldn't be in a position to NEED (or want!) to stay with Together.

Using your 4.73% + SVR, I'm thinking they fall into their new Prime Plus range (note there IS an ERC for these, and a hefty product fee)

Is the property non-standard? (High rise flat, ex-council flat etc) as the criteria for this range is fairly stringent by their standards (only 2 unsecured arrears in last 2y, only 1 secured in last 36m) - if it's a non-standard property then for sure you need to be wary about how you will re-mortgage.

If the credit is an issue, I'm not convinced Together are the best lender based on that criteria.

For example - somebody on the "light" plan (7.35% variable) could have secured arrears within 12 months or a ccj/default within 12 months - within 3 years, if they're conducting their finances properly, they'll no longer be "credit impaired" and given that the default/ccj/secured arrears will all be over 36 months old, they'll be able to go to to another lender - even somebody like Nationwide. That's where the biggest difference is seen - you're with Together for up to 3 years until your adverse dies down (becomes less relevant/recent) @ 7%. You conduct yourself perfectly for those 2/3 years and so improve your credit history - you then jump ship to somebody at half the rate.

With Prime Plus, they appear to be going for people that have had a "blip" (although those could possibly be placed with cheaper lenders!?) and/or have an unusual property which other lenders won't touch (non-standard construction, high rise flats, ex-LA with largely LA ownership etc).

Have the clients had a second opinion on their case? IMO Together should be a last resort, particularly if you're qualifying for their Prime Plus!

IF you'd have came questioning BBR+9.65%, then fair enough for now there's no other hope - stay with them for a few years and have perfect conduct then jump ship. BBR+4.73% = one of their 'best' 3 products which personally concerns me (NB: I work in lending and had adverse credit so have researched a lot of these companies for my own mortgage - I'm not a broker)