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YOUR FINANCES
The Jersey
mortgage market...
byHELEN COOKE
Will it ever return to normal?
MORTGAGE MANAGER
Hepburns Life & Pensions Ltd
Well I guess we should first consider what normal to see more lenders willing to accept applications from those
actually is! Over the past few years mortgage lenders in borrowers who can only fund 10% or even 5% of the price of
the UK, and consequently their Jersey branches, their property.
increased their mortgage lending at an incredible rate.
Huge demand for all forms of credit fuelled a booming As things stand, a little extra work is required if you are
economy and confidence was high. Niche products considering a purchase in the New Year. Banks work to strict
sprung up, largely in the UK, allowing many people to criteria and have little room for manoeuvre but there are some
buy property who would not have dreamed of qualifying really simple actions you can take to improve your chances of
for a mortgage just a few years earlier. success.
At the same time there was an explosion in just about all the First of all don’t just go in to see your bank unprepared.
other forms of borrowing. Our credit cards, personal loans Consider all your options and get at least one independent
and overdrafts were increasingly used for day to day view of the mortgage market before you put pen to paper.
expenses so we became a collective nation of borrowers quite You may have had an account at your bank since you were in
comfortable borrowing huge sums to support our lifestyles. short trousers but that counts for nothing! Your best option
may well be with a completely different company so research
The reasons for the world financial meltdown have already the market fully.
been chewed over in great detail so rather than dwell in the
past I am considering how these events will affect my clients It is also worth doing some ‘window dressing’ well in advance
trying to finance a home in Jersey in the next year. For some of making an application. All mortgage lenders will examine
time the banks pretty much closed to business and our most your existing bank statements and look closely at your regular
prolific lender, Jersey Home Loans, effectively closed outgoings. It is surprisingly helpful to be able to provide
overnight. In the first few months of 2009 criteria was so statements which show consistent credit balances. Even
stringent that the vast majority of applications were declined better to show that you are saving money in addition to your
almost without any thought. regular outgoings.
Very very slowly this situation has started to ease. In the past Ask your adviser to help you prepare a budget well in advance
couple of months we have seen the re-introduction of loans for of making the application. This will demonstrate how you

90% of the property value. However, at this time these are control your expenditure and will give the bank confidence that

only available to First Time Buyers and come with interest you will be able to afford the mortgage.
rates which are considerably higher than those available to

applicants with 15% or more to put down. If at all possible repay any other credit. Personal loans, car
payments and credit card debts will all stand heavily against

It seems that the most important aspect of any mortgage you and will affect your ability to borrow.

application for some time to come will be the deposit which
borrowers have available for their purchase. The minimum Finally, collect as much money as you can towards your
deposit must be considered to be 15% for anyone hoping to purchase. The harsh truth is that current rules mean that a

secure a competitive rate with the very lowest rates reserved deposit of 15% should be considered the minimum. This may
for those lucky borrowers who can fund 40% of the purchase well improve through 2010 but be prepared for the worst.
H
themselves!
The rollercoaster events of the last twelve months has left
We are poorly served in Jersey with just a handful of mortgage lenders in a cautious mood and Jersey has not
mortgage lenders who seem to have reverted, almost as one, been protected from this fallout. I suspect that we will face
to the criteria of the 1990s. This will no doubt make the more challenges in the months ahead as the markets slowly
banks’ balance sheets look better and keep their credit settle and confidence returns to the world economies.
departments happy but in the long run they need to recognise
that First Time Buyers fuel the property market and they need So it is no surprise to say that mortgages are still harder to

extra help. come by than they used to be. However, with the right


guidance it is certainly still possible to find a mortgage. Be
So as the next year unfolds my great hope is that we will start patient, be realistic and above all, be well prepared.
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