4 April 2007
Starting over with a new home
Many people going through a divorce find that they need to find a new home as the property may pass to their former partner or be sold to enable the money to be divided.
Understandably, this can be a particularly stressful time and puts strain on work and personal relationships, so having to find a new home and begin paying a new mortgage can sometimes prove almost too much to bear.
However, a range of new mortgages aims to make the situation easier for divorcees.
One of these new products is provided by the Saffron Building Society, which is providing its lowest ever mortgage rate to give a helping hand to people who want to make a new start.
The society has recently launched its innovative new Change of Circumstance mortgage, which is specifically aimed at those who may need some time to get back on their feet. It is particularly suitable for those who have been recently divorced or separated and want to buy a house. For example, a payment break may enable the borrower to make any renovations or furnishings needed before they begin to pay off their mortgage.
The main benefit of the mortgage is that it offers a stunning 0% interest on the loan for the first six months.
It then offers a stepped discount deal, with the following 30 months at a discounted rate of 0.70% off the Society's standard variable rate, currently making it 6.39%.
The mortgage is available for between £50,000 and £500,000 and for up to 85% of the property's value or purchase price.
Maintenance payments, for example for the care of children, can also contribute to income levels used to calculate how much can be borrowed.
Andy Golding, Saffron Building Society chief executive, said: "This mortgage is designed to minimise a borrower's monthly mortgage payments at the start of the loan, making it ideal for those needing that extra breathing space until they find their feet.
"Anyone considering taking such a large financial decision as taking out a mortgage should always seek advice on which product is suitable for their needs."
Darren Cook, head of mortgages at Moneyfacts.co.uk the money search engine, said: "This product is ideal for consumers who need a little time to get their finances back on track.
"People may think that being offered interest free money will cost them dearly in the longer term, however the true cost of 0% interest for the first six months and the current 6.39% for the remaining 30 months of the tie in period means that this product is not uncompetitive when compared with say a 3 year fixed rate deal at 5.34% with a £399 fee."
