Lloyds tightens criteria on interest only mortgage repayment plans.
LLoyds Banking Group has announced further tightening to its interest only mortgage criteria.
Existing Lloyds interest only mortgage holders looking for a further mortgage advance, will now be asked for evidence of an adequate repayment plan to cover the entire loan.
In the past Lloyds only required mortgage holders to provide evidence of an adequate repayment vehicle for the additional amount to be borrowed. However borrowers will now have to prove that they can repay the entire loan.
In a move to ensure the repayment of capital owed at the end of a interest only mortgage term, last February Lloyds began to tightened its criteria.
It changed what it was prepared to accept as an adequate repayment vehicle for new borrowers. The lender placed a minimum value of £50,000 for investments and £1 million for a pension fund. Minimum values were waived for customers looking for a further advance.
Since the FCA warned of an interest-only time bomb back in March, a number of lenders have tightened interest only lending criteria. Many have capped their maximum LTV levels allowed at 50% and The Co-operative has withdrawn from interest only completely.
Despite the fact lenders have tightened interest only mortgage criteria, deals still remain available for those with a 50% deposit or equity.
Contact Deal Direct today and we will source a competitive offer for you.
