While they may have become a distant memory following the financial crisis, as lenders found themselves reluctant to lend without a solid repayment plan, interest-only mortgages are back on the scene.
For those with a sizeable deposit of at least 50 per cent, Leeds Building Society has recently launched two interest-only mortgages options.
Starting at an incredibly competitive 2.49%, with a £199 booking fee and the 50% deposit criteria, borrowers must demonstrate and prove that they have a credible plan in place that will repay the capital at the end of the term. Anticipated inheritance and cash savings are no longer acceptable forms of repayment, and whilst not approved by most lenders, Leeds Building Society will acknowledge sale of the mortgaged property as a repayment plan.
Having chosen a career as a mortgage professional, your role in providing honest and transparent advice is a key part of the puzzle in a borrower’s journey to owning their own home. Having completed the required CeMAP training and obtained the level of accreditation needed to conduct interviews, by finding out about your customer you will be able to advise them on the best mortgage package.
When a customer indicates that they are looking to borrowing on an interest-only basis, it is important to ensure that they fully understand the implications this has. They need to ensure that they are confident and comfortable with their chosen repayment vehicle, particularly if they are stating that they would sell the house in order to repay the debt.
