Mayfield Mortgages and Finance Advice

Shared Equity

The Nationwide Building Society have a mortgage which allows the vendor to retain an interest in the property whilst offering the buyer the equity they need to get a mortgage – shared equity. Eg A property for sale at £200,000 - the vendor keeps a 10% share of the property (with second charge) and this allows the buyer to get a 90% mortgage with The Nationwide (for £180,000), without having any deposit and purchase the £200,000 property.

The contract terms can be negotiated between the vendor and buyer about when they get out etc. but it is basically a way of encouraging people to sell to first time buyers, and instead of dropping the price by 10%, they keep a 10% interest in the property which can be redeemed at a later date, possibly in 5 to 10years.

It would also benefit a professional buy to let portfolio owner, someone who would perhaps want to realise some capital to clear some costs in the short term or lower their gearing due to the lack of availability of high LTV buy to let mortgages, and who would be happy to retain some interest in the property.

It is also available to builders/developers, again encouraging the sale of properties to first time buyers without a deposit and without the need to drop prices.

Unemployment Insurance (part of ASU)

The number of people taking out Unemployment Insurance has increased dramatically over the last few months as fears over the employment sector increase.

A key point to note is that there is an exclusion period - normally 90 days - from when the policy is set up before a claim can be made. If you are made redundant or notified of potential redundancy during this period, a claim will not be valid. When the policy is set up, there most be no obvious danger of iminent redundancy or this too would render the policy invalid.

Bank of England Base Rate Falls 1.5%

The Bank of England have taken the decision to reduce the base rate by 1.5% in a response to the current economic conditions. Many commentators suggest that this sort of action should have taken place earlier and that reducing it by as much as this will only cause panic. However the main observation is that such a drastic measure merely indicates how bad the situation really is - ie the recession may well be a lot worse than previously expected.

Mayfield Mortgages Ltd. is an appointed representative of Financial Protection Network Limited who are authorised and regulated by the Financial Services Authority. Mayfield Mortgages FSA no. 680912. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN ATTACHED TO IT.