Has your Birmingham Midshires mortgage account number changed?
If you are a BM solutions mortgage customer you will have recently have received correspondence from Birmingham Midshires advising you of your new mortgage account number.
Your new BM solutions mortgage account number will start with a ’60’. Previously you would have had a mortgage account number that started with a ‘200’ (sometimes shown as’0200′)
Why have Birmingham Midshires changed my mortgage account number?
BM solutions have recently put their mortgage data onto the same system used by their sister company, Halifax . As a result, BM solutions buy to let mortgages will have a new updated mortgage account number consisting of 14 digits and starting with ’60’.
How does this affect me and my Birmingham Midshires mortgage account?
This is an administrative change only, and the terms of your Birmingham Midshires mortgage account will not have changed as a result. Currently, the new computer system still recognises the old ’20’ numbers, but displays the new ’60’ number on access.
This means that if you are requesting a BM Solutions mortgage product transfer (which must be done via a broker), the broker can still work for the moment with the old ’20’ number.
Going forward, this may change and it is likely that the ’60’ number will become the only reference number brokers can use to access your Birmingham Midshires mortgage account.
Common problems when requesting a mortgage product transfer from BM Solutions
Occasionally, we run into issues when requesting a Birmingham Midshires mortgage product transfer for an existing customer. Below, we outline the most common issues and how they can be resolved.
Where a mortgage is listed on the system as underpaid (even by as little as a pound), this blocks the opportunity to make a product transfer. In the vast majority of cases, the difference will amount to a few pounds can easily be resolved, or it may simply be that the system needs to be updated.
You can solve this issue by calling the customer service team about your Birmingham Midshires mortgage account on 0345 300 2627 and discussing the matter with them. Once resolved, let your broker know and they can move forward with your mortgage product transfer.
Duel direct debit or standing order
Most Birmingham Midshires mortgages are paid by a single direct debit. There are mortgage accounts, however, that comprise of two or more sub accounts, and these are occasionally set up under two separate direct debit mandates. Some older accounts, may also be paid by standing order.
In order to complete a mortgage product transfer, your Birmingham Midshires mortgage account must be paid via a single direct debit mandate. Your broker can help you to switch to a single DDM as the lender provides us with a form for this purpose.
Insufficient term left on the mortgage
As the original term on your Birmingham Midshires mortgage account ticks down, there will come a point where you will not have access to the full rate of mortgages for product transfer (if for example you have less than five years left to run you will not be able to access a five year fixed rate).
As part of the product transfer process your mortgage broker can extend the mortgage term for you provided the term will still end before the month of your 80th birthday. (This is a simple process for the broker, and if your broker wishes to charge you for it, we suggest you look elsewhere for help.)
If you have less than 2 years 10 months to run on your mortgage, your broker cannot extend the term and you will need to contact the customer service team at BM Solutions on 0345 300 2627 to extend your mortgage term.
Mortgaged property address is listed as your home address
Birmingham Midshires mortgages are specifically designed for buy to let properties, and as such they do not expect you or your family to be living in any property mortgaged by them. Therefore, if records show that the mortgaged property address is also your home address that is a potential problem. In these cases, a mortgage product transfer cannot be arranged until this potential conflict is resolved.
It is fairly common for this conflict to come up, as many mortgaged buy to let properties were formerly the home of one of the applicants. If this is the case for you, and you no longer live in the property, you will simply need to prove to BM Solutions that this is the case contact the customer service team at BM Solutions on 0345 300 2627 (the lender may ask you to provide proof of your current home address in the form of a recent utility bill).
Self certified – Residential Mortgages
Some time ago Birmingham Midshires were offering self certified residential mortgages and a number of these contracts are still running. Mortgage product transfers are not available on these contracts, if you hold a BM Solutions self certified mortgage and are seeking a new mortgage rate, your only option is to remortgage to a new lender.
Existing Birmingham Midshires mortgage tracker rates
Birmingham Midshires mortgage customers who have come off of a fixed-rate in recent years and not selected new rate, will be on the Lender’s standard variable rate. This rate is currently 4.44%, which is very expensive given that new Birmingham Midshires mortgage rates are available without product fee from as little as 2.58%.
A borrower who let’s their mortgage product run onto the standard variable rate will be paying £155 per month too much interest for each £100,000 they owe on the account. Therefore it is key that you consider a mortgage product transfer as soon as possible.
On some older accounts borrowers may be on trackers for the remaining term of the mortgage that can be more competitive. You may have a tracker on a rate of 2.54% or 2.10%. These rates are reasonably attractive given the current and recent low base rate, but will not be so if base rates rise in future.
A situation where base rates raise again to just 1%, will take these tracker rates to 3.44% and 4.00% resulting in a considerable hike in monthly mortgage costs.
It is important therefore, if you are on a long-term tracker rate, that you keep the account under review and consider taking a new fixed rate before base rate rises price you out of the market.
Should I take a mortgage product transfer rate with or without a product fee
BM solutions will generally have nine rates available for mortgage product transfer. These are grouped into two and five year fixed rates for loan to values up to 60%, up to 75%, and up to 125% (negative equity).
The bulk of these rates have two versions with and without a product fee. The Birmingham Midshires mortgage product fee for product transfers is currently £999 which can be added to the loan.
You will therefore notice that the rate with the product fee will be quite a bit lower than the rate without a product fee. How do you then decide which is the best rate for you.
Product fees and two year fixed rates
The two year fixed rate with the product fee is currently priced at 0.5% under the rate without the product fee. Therefore, you need to have sufficient balance on your account to save £999 over two years from that 0.5% interest saving. If you cannot do that, the rate with a product fee is not for you.
In simple terms a mortgage balance of £90,000 will result in a saving of around £1,000 over two years on the fee charged rate.
Therefore, as a rule of thumb, borrowers with a mortgage balance in excess of £100,000 will benefit by taking a two year fixed rate with the product fee (based on current rates).
Product fees and five year fixed rates
The five year fixed rate with a product fee is currently priced at 0.4% under the rate without the product fee. Of course, on these rates you now have five years for the saving in interest to match the product fee.
In order to save £999 from an interest saving of 0.4% over five years you will need a mortgage balance of at least £50,000. Therefore, borrowers with the mortgage balance in excess of £50,000, should consider taking a rate with a product fee (based on current rates).
Fee or no fee? – Other points to consider
If your Birmingham Midshires mortgage is set up on a capital repayment basis rather than interest only, you are repaying your capital whilst you are on the fixed rate. As a result effect of the interest saving is reduced, making the fee charged rate less attractive.
This is also the case if you intend to pay off lump sums of your mortgage during the term of the fixed rate (remember BM Solutions allow you to overpay by up to 10% per year without penalty under their ‘early repayment charge concession’).
When we run a product transfer for a Birmingham Midshires existing mortgage customer we will advise you on whether the fee charge rates are more attractive for your situation.
Of course, some borrowers do not like paying fees to the lender, even if mathematically they will be better off by doing so. If that is the case in your situation we will make you aware of the cost and you can make your own decision.