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The House Purchase Department
in 1969
 
House Purchase
Department
 
Since September 5th 1919, when the first application was received, some 42,000 mortgages have been completed by the Bank under the powers conferred on it to make advances to depositors to assist them in buying freehold or leasehold houses.

Applications for loans of up to a maximum of 80% of the purchase price or of the mortgage valuation, whichever is the lower, are accepted only from those depositors with a proven track record of savings with the Bank.

The general increase in the standard of living during the past two decades has resulted in more and more depositors seeking to buy their own houses and, in consequence, it has been, and still is, difficult to meet the ever-increasing demand.

To ensure that the funds available are distributed among the greatest possible number of depositors seeking assistance, a limit may be imposed on the amount to be advanced on individual applications; this limit is varied from time to time depending on circumstances prevailing.

Properties to be considered must be either within the city or within those areas adjoining the city where a branch of the Bank operates including Halesowen, Shirley, Solihull, Sutton Coldfield and Warley.

A depositor interested in arranging a mortgage calls at the head office where he, or she, is interviewed by a member of staff of the mortgage department.

If, by virtue of the applicant's savings record, an application can be entertained, the prospective borrower is required to give certain confidential information such as age, occupation, income, etcetera, so that it may be determined whether or not his or her means are sufficient to meet the commitment being entered into.

In common with most lending institutions the Bank accepts applications for loans on newly-built houses only if they are subject to a certificate of the National House Builders' Registration Council, as it is considered that the buyers of such properties should have the benefit of this worthwhile safeguard.

Advances on freehold property, or on leasehold property where the lease has not less than 50 years to run, are normally repayable within a period of 20 years; for leasehold flats and maisonettes the maximum term is 15 years.

When determining the period of the loan, however, the age of the applicant is taken into account as it is considered desirable that the advance should be repaid by the time normal retirement age is reached.

Each property is inspected and valued for mortgage purposes by one of a panel of suitably qualified persons in practice in the city, appointed by the Committee of Management.

The applicant's attention, however, is drawn to the fact that the offer of an advance implies no warranty as to the value or condition of the property.

Every prospective buyer should seek an opinion regarding the property from a qualified valuer and certainly should not pay a deposit or sign any form of agreement until a solicitor has been consulted.

Appropriate relief on the amount of mortgage interest paid each year is allowed by the income tax authorities from a borrower's assessment of tax. Alternatively, an applicant may elect to receive, instead of tax relief, a subsidy under the provisions of the Government's Option Mortgage Scheme.

Repayments on a loan are made at a branch office selected by the borrower; amounts in excess of those normally required may be paid and no redemption fee or interest penalty is incurred if the mortgage is discharged before the expiration of the agreed term.

The title deeds of all mortgaged properties are kept in a specially designed strongroom and each year are subject to scrutiny by an independent firm of auditors.

Even when a mortgage is discharged the Bank's service to an erstwhile borrower continues, in that facilities are provided, if required, for the safe custody of his deeds in the Safe Deposit Department at head office at a nominal yearly charge.
 
 
[NOTE: the above article was written in 1969 by A W (Bert) Hopkins, under the title HOME BUYERS HAVE RECEIVED 42,000 LOANS.
The article appeared in a publication celebrating the Bank's Golden Jubilee. At that date, Bert Hopkins held the position of House Purchase Superintendent. The article briefly illustrates the conditions and regulations under which mortgages were granted at that time. He wrote a more comprehensive article in 1972 entitled BMB Mortgages]