stevio
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Post by stevio on Jan 8, 2016 12:48:29 GMT
I****** Mortgages has created an innovative product of a top-up mortgage loan offered at the point of home purchase,secured by way of a second charge on the borrower’s home. The loan is offered at the same time as a first charge mortgage from a traditional high-street lender. It is targeted at applicants who have a completely clean credit history and who can pass full affordability assessments. The loans are only available for existing properties (no new-built) and a valuation is required in every case.
The product is designed to help creditworthy borrowers purchase a home on better conditions than they would obtain from the high street mortgage lenders alone. A borrower can source, through their mortgage broker, a loan for up to 85% of purchase price from a bank or building society, at an affordable interest rate. The same borrower can then add up to 10% as the top-up loan. The borrower has therefore been able to raise up to 95% of the purchase price for their home, and has put down a cash deposit of 5% or more. The monthly cost of the bundle for the borrower is lower than a single high advance rate loan from a bank.
The initial loan for £100,000 is for 36 months, carries an interest rate of 6.5% and is fully underwritten. All loans will be through the one SPV, meaning that as the portfolio of top-up loans grow, the risk reduces further through diversification.
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stevio
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Post by stevio on Jan 8, 2016 12:49:35 GMT
Not loving the 6.5% return for a 95% LTV
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oldgrumpy
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Post by oldgrumpy on Jan 8, 2016 13:00:34 GMT
I doubt whether I shall move far on this while I can get close to 6.5%* (sometimes more) on RS with a provision fund. I joined ABL for the involvement in aircraft, so lets hope more of those fly in very soon.
edit 13:21 6.4% being matched "right now" on RS 5yr.
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rogerbu
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Post by rogerbu on Jan 8, 2016 13:09:27 GMT
The slightest blip in house prices and these 2nd charge loans will be wiped out. The same house price dynamic would affect virtually all the properties in the portfolio. So multiple properties in the portfolio provide very little extra security.
6.5% with effectively no security. I can't see me taking this up
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pom
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Post by pom on Jan 8, 2016 13:09:55 GMT
Well it's different - and I like the fact it's depriving banks of being able to charge higher rates! It may not look like a tempting rate but I guess it all really depends on how confident we are that we really understand the risks associated with all the high rate property loans (that are surely to far higher risk borrowers). Will I go for it? Not sure yet as wasn't something I was expecting to take account of in deciding my strategy for this year. But it's certainly tempting to maybe throw a little of my unmatched RS money in it, specially as this is 3yrs not the 5 I'd need on ratesetter and it MIGHT be possible to resell on the SM if I needed to without it costing as much as an early RS exit.
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Investboy
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Trying to recover from P2P revolution
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Post by Investboy on Jan 8, 2016 13:10:38 GMT
The slightest blip in house prices and these 2nd charge loans will be wiped out. The same house price dynamic would affect virtually all the properties in the portfolio. So multiple properties in the portfolio provide very little extra security. 6.5% with effectively no security. I can't see me taking this up My thoughts exactly. Lets hope the 2nd promised loan will be something more interesting.
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jonno
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nil satis nisi optimum
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Post by jonno on Jan 8, 2016 13:22:26 GMT
Yes I agree with the thrust of comments so far. This really isn't what got me interested in Ablrate in the first place and couldn't really be further away from the original attraction of a completely different/ "unique" asset class at a fair rate of return. Not for me.
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huxs
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Post by huxs on Jan 8, 2016 13:26:11 GMT
Hmm, am I missing something??
While this will I am sure make sense to someone is this really as safe as the 6.5% I can get on RS (granted this is 3 not 5 years, but 95%LTV!!) any safer than the 7% I can get on the Property loans on FC (especially when CB comes back) or worth 5.5% less than the more risky property loans on FS, SS and MT ??
I want to like (and invest) in all the Ablrate loans (mainly so they will continue to grow and start delivering the plane loans) but I can't see this getting any of my money I am afraid.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 8, 2016 13:28:25 GMT
Well that caused a range of emotions Exicitement on reading the initial email Concern when read 12.45 start time at 1pm Panic when I thought I missed out on something juicy Annoyance when I logged on & saw the 100% bar Anger when I saw the email had come though 4 minutes before launch Happiness when I realised that the 100% was the underwriting not investment amount Disappointment when I actually noticed the rate Deflation when I actually read the whole email & loan info Its a rollercoaster this P2P lark and thats without any frantic F5/bot racing activities Be giving this one a miss, time to psyke myself up for whatever's next
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stevio
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Post by stevio on Jan 8, 2016 13:41:54 GMT
The slightest blip in house prices and these 2nd charge loans will be wiped out. The same house price dynamic would affect virtually all the properties in the portfolio. So multiple properties in the portfolio provide very little extra security. 6.5% with effectively no security. I can't see me taking this up This is the reason why banks are lending up to 85%, because the remaining 15% is a buffer Anything in this 15% zone is high risk Therefore Ablrate should be offering this to investors at about 3x the 6.5% or around 20% There is not even any guarantees like replacement of defaulting loans like MT has done with some of their partners 6.5% at 95% LTV VS almost double the rate at 12% at 25-70% LTV is no brainer
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treeman
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Post by treeman on Jan 8, 2016 14:08:23 GMT
Well that caused a range of emotions <SNIP> Be giving this one a miss, time to psyke myself up for whatever's next Checked messages/mails 10 mins ago after a few hours tidying up a couple of casualties of the recent winds with the chainsaw ........ Eeekk! went on pretty much the same ride! Funny old business indeed. Still - all calm now And the sun's come out now I'm in However, This one's not doing it for me either......
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SteveT
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Post by SteveT on Jan 8, 2016 14:41:04 GMT
How long, I wonder, before the % Invested figure passes the % Rate figure ... ?
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Post by ablrate on Jan 8, 2016 15:06:12 GMT
Hi Guys
Thanks for your comments on this one. We liked the look of it on the basis that the loans are for prime borrowers, clean credit file, owner occupied and the team at I****** are very good. Even at a higher LTV the credit underlying the payments are excellent. The company also has its own investors for the loans, so it was a little bit of a test to gauge appetite from our base.
Sorry to cause the emotional rollercoaster... hopefully we will be able to keep your emotions at a more stable level this year!
Regards Ablrate
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ablender
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Post by ablender on Jan 8, 2016 15:40:23 GMT
RE: "owner occupied" - somewhere I read that this is actually a problem from the point of view of security in the case of a default. I cannot remember the argument but I seem to recall that it has to do with taking over the asset to sell it. Anyone has any info about this?
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Post by oldnick on Jan 8, 2016 15:48:22 GMT
RE: "owner occupied" - somewhere I read that this is actually a problem from the point of view of security in the case of a default. I cannot remember the argument but I seem to recall that it has to do with taking over the asset to sell it. Anyone has any info about this? Assetz seem to be in the middle of that particular briar patch with one of their loans at the moment. Hopefully the legal process will come to the rescue with some sharp secateurs rather than a shot gun.
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