New mortgage available to home renters

Grovelawn Financial News 05/08/2011

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Rental payments taken into account by lender

Many would be home owners have complained in the past that mortgage lenders should take into account their unblemished history of paying a rental amount each month which is often comparative to an average mortgage repayment. With this in mind The Saffron Building Society has come up with a new mortgage product to help tenants who are currently renting a property.

The Saffron will take into account the history of rental payments as evidence that borrowers can afford a mortgage. The "Rent to Buy" Mortgage from Saffron Building Society will be offered to borrowers who are able to prove at least a 12-month record of paying rent. Saffron has said it would accept this as evidence of their ability to afford an equivalent monthly mortgage payment.

The mortgage would be available with only a 5 per cent deposit and would be subject to manual credit screening to ensure that no automatic credit score errors would occur. The mortgage rate would be fixed at 6.49 per cent until 2015 and would enable a renter who is currently paying £1.000 in monthly rental payments, to borrow up to £155,000. There is a fee of £195 on the product.

← Bank shares could be offered to 46m people | News For August 2011 | Mortgage cheats could be reported to HMRC →

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