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20/05/09 Lloyds TSB launches first-time buyer mortgage:
The three-year product, called ‘Lend a Hand’, offers first time buyers a 95%
loan to value (LTV) mortgage at 4.39% by taking a legal charge on a savings
account belonging to their parents.
This is almost £100 a month less than the industry’s average 90% mortgage rate of 5.98%. The legal charge means the parents retain ownership of their savings while earning a competitive fixed interest rate of 3.5%.
It also lets Lloyds TSB lend to customers with less of a credit footprint, a common reason why many first-time buyers fail to qualify for a higher loan to value mortgage.
This compares with 10,400 in the fourth quarter of last year, and 8,500 in the first quarter of 2008. Although repossessions are still rising, the CML now thinks its 75,000 forecast looks pessimistic for the year as a whole, and expects to revise the figure downwards in its next housing market forecast update.
Although this rise comes from an all time low point, the number of mortgage products available to landlords has been gradually rising, giving landlords who want to take advantage of low house prices better financing options to expand their portfolios.
By using detailed product availability information from its mortgage sourcing tool, Mortgage Flow, Mortgages for Business noted that while the number of mortgages available is still low, at 20% of 2007, product availability has risen 58% since the end of 2008.
Six cuts since October 2008, when the Bank Base Rate stood at 5%, means there is little scope left for further reductions.
The Bank has already introduced quantitative easing, a method of expanding
the money supply to try and revive the economy.
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