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BOEAll mortgage transactions on hold as BoE hit by technical problems

UK borrowers cannot access a mortgage right now as the Bank of England confirmed a key payments system has been hit by technical problems.

The Boe says it identified a technical issue this morning related to some routine maintenance of the real time gross settlement system payment system and has paused settlement while it resolves it.

The RTGS system allows money to be transferred between banks in real time to fund investment banking and consumer loans.

The fault has affected the Clearing House Automated Payment System, which processes high value same-day transfers, used by solicitors to transfer the mortgage during the house-buying process.

The Boe says it is working to address the issue as quickly as possible and plans to restart the RTGS payment system in a controlled manner.

It says the most important payments are being made manually and says all payments made today will be processed.

It is unclear whether house purchases are being included in the important manual transactions. The Council of Mortgage Lenders says it has yet to be alerted to problems by its members.

The Chaps system moves billions of pounds every day between Britain’s main banks and building societies.

In September 2014, Chaps processed 3.2 million payments worth £5.8trn with an average volume of 145,638 a day.

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.

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