Monthly Archives: February 2014

Principality stops lending to payday loan users

Principality Building Society is set to stop lending to applicants who have taken out a payday loan within the previous 12 months.

The Wales-based lender Principality has stated that it would continue to process transactions under its current criteria until close of business on 18 February, meaning borrowers applying for a mortgage from the 19 February with the Principality must not have taken out a payday loan in the previous 12 months.

Principality is the latest lender to explicitly exclude recent payday loan borrowers, you need to consider your actions before taking out this type of credit as it can impact on your ability to obtain a mortgage.

Principality has also tweaked a number of other areas of its mortgage criteria, including for debt consolidation and for cases where the borrower takes part in online gambling. The lender will request further information at its discretion, where it identifies online gambling or any gambling debts on an applicant’s history. It says this is to ensure there is no underlying affordability issue.

The Principality has reduced its maximum LTV for debt consolidation mortgages from 90 per cent to 75 per cent and will now only offer them on a capital-repayment basis.

If you would like to review your financial position to see if you would be better off remortgaging to another lender offering a more competitive rate than taking out a short term loan.

Call us on 01489 580020 or “contact us” and one of our qualified advisers can discuss your requirements before you apply to the Principality and get declined.

BOEUK interest rates have been kept unchanged at their record low of 0.5% by the Bank of England.

The Bank’s Monetary Policy Committee (MPC) also left the £375bn quantitative easing stimulus programme unchanged.

When the policy was first announced, in August last year, Bank of England governor Mark Carney said the Bank would not raise interest rates until the unemployment rate fell to 7% or below.

At the time the Bank did not predict this rate would be hit until 2016, but recent strong growth in the UK economy has led many economists to revise their forecasts.

Jobless figures released last month showed that the unemployment rate fell to 7.1% in the three months to November.

Mr Carney indicated that he did not want interest rates to rise for some time yet.

The Bank has been helped by the slowdown in inflation. The annual inflation rate fell to 2% in December, the first time it has been at or below the government-set target of 2% since November 2009.