We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Halifax, which falls under the Lloyds Banking Group, is a well-known name on Britain’s high streets and helps Britons with their savings. However, the bank also provides significant help to those looking to secure a mortgage or remortgage. Britons who have faced significant problems in recent years are a group known as mortgage prisoners – who are in a difficult bind.
But help is on the way for this group, as Halifax has said it will be accepting remortgage applications from this group.
The aim is to be able to help people switch onto better and more affordable deals.
The bank has said it will only be accepting applications up to 75 percent loan-to-value and via brokers only.
To qualify for the deal, Britons will need to provide a letter from an inactive lender confirming they are a mortgage prisoner.
They must also not require any extra borrowing to enter into such an arrangement.
Britons will be able to borrow only the maximum amount of the first charge mortgage.
However, those Britons who are in financial difficulty will unfortunately not be accepted.
And interest-only mortgages will only be considered if there is a repayment plan which has been established.
Hundreds of thousands of Britons are missing out on a vital tax break [UPDATE]
State Pension UK: Government urged to reconsider Triple Lock Mechanism [ANALYSIS]
Universal Credit UK: Britons could be entitled to extra sums of money [INSIGHT]
Mortgage prisoners are those who are unable to switch from their current mortgage deal to a new one, for a number of reasons.
One of the most common, however, are people who haven’t been able to meet the strict borrowing criteria under the Mortgage Market Review, which took place in 2014.
In October 2019, the FCA introduced rules to remove barriers to switching to a more affordable deal for mortgage prisoners.
However, the watchdog said the change was not always possible and was dependent on lenders offering suitable options to these borrowers.
In July of this year, the FCA put forward a consultation which could help mortgage prisoners further.
It proposed to help “closed book borrowers who may currently lack switching options”, alongside another proposal to help borrowers on interest-only deals.
The document read: “We propose to amend our responsible lending rules so that lenders can choose to not undertake a standard affordability assessment if the borrower seeking to switch to a new deal without borrowing more is currently in a closed book within the same group as the lender.
“This should help make it easier for these borrowers to take out a new mortgage contract.”
Express.co.uk contacted Halifax for comment on the new support available.
A spokesperson said: “We are keen to support homeowners classed as ‘mortgage prisoners’.
“As part of the FCA scheme, we will be accepting applications from borrowers with other lenders.
“We encourage borrowers to review options available across the market to ensure they’ve got the right product for their circumstances.”
Source: Read Full Article