GE Money offers an 80% CCJ mortgage product – but is it any good?
GE Money is a lender that has battled through the credit crunch and continues to offer 80% CCJ mortgages to customers with CCJ issues only via selected broker channels, including Niche Advice Limited.
In order to qualify for the 80% CCJ mortgage you must have been a permanent UK resident for at least 3 years and a current UK residential home owner for at least 1 year.
If you have a current mortgage it must have been maintained impeccably for at least 12 months. If you the property is ‘mortgage free’ i.e. unencumbered, then the maximum borrowing is restricted to 50%.
The applicant(s) must have a combined income of at least £18,000 (excluding any maintenance or benefits).
GE Money operates the following rules on their 80% CCJ mortgage:
CCJ limits for 80% CCJ mortgage
|In the last 2 years||1*||£1,000 max*||No|
|In the last 2 years||Unlimited||Unlimited||At least 1 year at the time of completion|
|Over 2 years||Unlimited||Unlimited||No|
* Plus 1 other unsatisfied CCJ provided it is not over the value of £250.
Applicant limits for 80% CCJ mortgage
|Maximum||£500,000||Unlimited||64 (69 end of term)|
Example of current GE Money 80% CCJ mortgages
Based on a purchase price of £175,000 and a repayment mortgage of £140,000 over 25 years.
There is a telegraphic transfer fee of £23.50 and a mortgage discharge of £150 on full redemption. The main early repayment charges are 3% of the amount repaid in the first 2 years.
The 80% CCJ mortgage products below are current as at 25 September 2013:
Product One: 2 Year Discount
Initial pay rate 5.09% (APR 5.7)
Valuation Fee £449 / Arrangement fee £1,295
Currently at £825.78 per month for 2 years. After this period the mortgage will revert to the lender’s variable rate at the time. Based on today’s prices this would be £856.84 per month.
Product Two: 2 Year Fixed Rate
Initial pay rate 5.79% (APR 5.9)
Valuation Fee £449 / Arrangement fee £1999
Fixed at £884.14 per month for 2 years. After this period the mortgage will revert to the lender’s variable rate at the time. Based on today’s prices this would be £860.36 per month.
GOOD POINTS ON THE GE MONEY 80% CCJ Mortgage product
The amount of CCJs on their 80% CCJ mortgage is amongst the most tolerant in the market.
The maximum mortgage is assessed using an affordability model which can translate into income multiples of up to 5x salary. This outstrips all other CCJ lenders of its type.
Within the product range there is ‘Lifetime Tracker’ which carries an early repayment charge period of just 1 year from the inception of the mortgage. So effectively this 80% CCJ mortgage could be used to rehabilitate your credit rating with the potential to remortgage to a more mainstream lender without being penalised after 12 months.
The lender allows ‘gifted deposits’ from immediate family.
BAD POINTS ON THE GE MONEY 80% CCJ Mortgage product
Non homeowners such as first time buyers or those renting are excluded from this 80% CCJ mortgage offer.
The rates are higher than the high street but that is to be expected as the risk to the lender is greater and there is not much competition in the CCJ mortgage sector.
If you are remortgaging the maximum additional amount you can borrow above your existing mortgage is £50,000 which could be restrictive.
There is an option for all or part of the loan to be on an ‘interest only’ basis but the interest rate increases.
There is no option to ‘overpay’ to reduce your borrowing in the early repayment period.
The product is not portable i.e. it cannot be taken to another property. Therefore if you move you will need to secure a new mortgage which might be a challenge if you have had credit issues. Also if you move whilst in the early repayment charge period you will be heavily penalised.
Arrangement fee is slight higher than the norm and is payable on completion
For the full information on 80% CCJ mortgage products and rates and fees please complete the enquiry form on the right-hand side of this page or alternatively call us on T: (020) 7993 2044.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.
The views expressed in this article are based on my own personal general opinions and experiences, and they are not necessarily shared by Niche Advice Limited or other Mortgage Brokers. Rates correct as of 25/09/2013.