InsideUKMortgages

Simple, Quick and does the job

2010-03-10T13:48:00.001Z

A good mortgage calculator, simple and easy to understand. It will do for 95% of people looking to crunch some numbers.

For all those looking for a larger more complex calculator I have one on my blog here

in reference to: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml (view on Google Sidewiki)

Interest Rates will go up in June

2010-03-10T08:40:00.002Z

Whilst we have all enjoyed the low cost mortgages of the past 12 months the inevitable was going to happen. We need to repay back the government for its quantative easing. So not only is your TV licence going up but so too will your interest rate on your mortgage.

I would expect mortgage lenders like mortgage express to react quicker than some of the high steet lenders to changes but the bottom line is all mortgage lenders react faster to a rate rise than a rate fall. Like income tax..... It disappears faster than you can open your pay check, however when a rebate comes around dont expect to see one as fast as it disappeared.

Anyway expect to see rates rise steady until october november time when we will be sitting at about 2.5% bank of england base rate.

Subscribtion Forex UK

2009-09-18T09:15:00.002+01:00

Allow me to show you a new method in forex trading forUK based traders who want to learn and follow a trader step by step. Although not mortgage related, I have been using these guys and earning enough to cover the interest only repayments. So I guess its relevant for me. Not only are you getting tips, you are getting taught why, where and when. The aim of www.aifx.co.uk is to turn you into a competant trader so you can find your own trades later on.

Heres the link Subscription Forex UK

New Search Engine

2009-08-10T10:37:00.001+01:00

Inside UK Mortgages are proud to present a new type of search engine, one that gives you twitter, video's, answers all on the same page.

Rates held again in June

2009-06-25T16:42:00.000+01:00

The Bank of England's (BoE) Monetary Policy Committee (MPC) voted unanimously to keep interest rates at a record low of 0.5% and maintain its £125bn quantitative easing program.

The general consensus coming out of June’s meeting is that whilst things remain bleak in the medium term we are also looking a lot brighter than this time 3 months ago. We are still hearing of redundancies but not in the number or more alarmingly frequency that we were 6 months ago.

The minutes from the meeting go on to say…..

"Overall, the risk of a continued sharp contraction in output in the near term had receded somewhat, However, there was no reason to conclude that the medium-term outlook for the economy, and thus inflation, had changed materially since the Inflation Report had been finalized."

Many of our leading financial experts in the UK are still expecting interest rates to be at 0.5% until 2010, time will tell but I think the pressure on the Bank of England to raise sooner than then will be too great. Moving onto the ongoing efforts of quantitative easing on nominal demand, it acknowledged there were some ‘tentative signs’ it was boosting the money holdings of institutional investors - the first step in the transmission mechanism. We were warned many months ago that we would not really see any signs of the money filtering through until August but its nice to know they are still doing what they are saying.

Whilst we are happy that there are signs of improvement and we implore the government to keep going in this direction, we also want to understand that when the recovery is in full swing we are ready to handle this.

First time buyers need the advice

2009-06-24T17:01:00.000+01:00

Mortgage advisors are reporting that 4 in every 10 enquiries are from first time buyers, this is really no surprise to me but it does reaffirm the idea that now is the right time to buy as property is just within reach of these first time buyers.

The other bulk of enquiries came from people looking to secure their fixed rates in anticipation of rises of the bank of England base rate. Most people are expecting the interest rates to stay at an all time low for the rest of the year but with some lenders now moving their rates north it has prompted people to look at securing a deal. With some lenders holding rates it means the markets are no longer unanimous in burying their heads in the sand. Some are coming out and starting to spar with competition starting to warm. As we have said many times here just one little hint of a move by the bank of England and we will see one almighty scrap. When people are fighting to get business that is always good news for the consumer.

You really should consult your mortgage broker uk if your thinking of moving into a new fixed rate with your lender. These people have their ears to the ground are willing to help you out

Youngsters do not want a home!!

2009-06-23T17:11:00.000+01:00

According to research commissioned by the Chartered Institute of Housing (CIH) youngsters are not looking to own a house. They are frighten by the thought of negative equity. Rightly so in my eyes. Who really wants to start out adult life by paying for a mortgage and having your debt increase every month. I think it shows some maturity on the part of youth here too. They get a bad name for their hoodie wearing practices but they are looking at the financial aspect very carefully.

The biggest change occurred in those aged 25- 34. Before the credit crunch in July last year, 83% of respondents in this age group said owning their own home was their ideal living situation. This figure has now fallen 14%. In this age bracket, 28% of those who own their own home were either currently in negative equity, or expecting to be in negative equity in the next 12 months.

What is clear is that people have become very educated of the past couple of years, we are now seeing people understand what these terms mean and more importantly how it will affect them. I say well done to everyone that has expanded their knowledge during these difficult times.

Housing market creeping up :)

2009-06-22T17:16:00.000+01:00

More people want to buy and less people are selling. Supply and demand on mortgages are into overdrive. We are getting used to these half baked goodwill stories now but we keep publishing them none the less. We are now in a massive drive to boost consumer confidence and therefore we are happy to report the following…….

· Enquiries are up

· House prices are up

· Mortgage applications are up

· Mortgage approvals are steady

Well well well ladies and gentlemen, it looks like its the uk mortgage lenders that are holding everyone back again, the sooner we get a grip on them the better we will be.

Property Prices to RISE !!!

2009-06-20T16:35:00.000+01:00

Good news for homeowners, many experts are saying property prices will rise by an average of 1.4% over the next 12 months. This is a very positive change when compared to the 6.1% forecasted drop off released in March, These figures are coutesy of some stats produced by the BSE. It is also reported that the number of mortgages applied for is increasing by the day however the number of approvals is still lurking in the low to rock bottom section.

The main survey found that just under 60% of people thought that now is the right time to buy your property. You can therefore deduce from this that more buyers are on the market and let supply and demand graphs take over from here. It’s the latest in a long line of statistics being blurted about, each carrying the same message. Things are turning but we are not out of the woods yet.

Lenders make money again!

2009-06-18T17:23:00.000+01:00

Despite the Bank base rate being held at 0.5%, lenders are increasing average mortgage rates, this means that whilst they are making a nice profit at current rates they are becoming greedy again. Now people want to borrow and there is significantly less competition for the loan. Our lovely lenders in the UK are capitalizing on this and are charging the consumer more.

We do not seem to have an answer and these banks can do what the hell they like, I find it outrageous they can forget about the last 2 years and just start squeezing again at the first sign of a few quid. What the government should be doing is enforcing the rates as they said they would. However even after my little rant here I doubt I will get the support to make a difference.

Abbey and A&L increase rates

2009-06-17T17:21:00.002+01:00

Abbey for Intermediaries and Alliance & Leicester Intermediary Sales or Santander if you please will be changing their fixed and tracker mortgage rates from tomorrow (18^th June 2009) with increases on fixed rates between 0.30% and 0.50%. This is a shock to my system seeing as the base rate has not moved. We are not seeing any criteria changing either. So what are the reasons for the increased cost?

Well apparently this is because of competitor movement. Well we have news for you Mr Santander….. Nobody has moved for many months. It is just a ploy. With the base rate expected to rise in the not too distant future Abbey can increase rates now and then when the other lenders all jump and move their rates Abbey will appear to be the ones holding. I am really not impressed and I am not satisfied with the explanation we are getting.

More and more pay day uk sites

2009-06-16T20:26:00.000+01:00

It would seem that more and more of these type of lenders are springing up. Why I ask myself. Most come with an APR of around 2000% (that was not a typo, I really mean two thousand!!)

So what do they do and how do they charge so much?

Basically the lender will lend against your next paycheck and they are very fast at this too. The average cost is about 25 quid for every ton you borrow. So this is best illustrated by an example....

I need 200 notes...
I go to the site, enter my details....
If my credit is good enough they transfer the money there and then...
On my next payday, They direct debit me 250 notes.

I see how this fluid cash can work for some people, it can be used in an emergency but those who use this regularly will find there money slipping from there grasp.

Lloyds cut further jobs

2009-06-15T07:42:00.000+01:00

Lloyds group are still going to cut nore jobs, basically removing cheltenham and glouster from the high street and turning it in to a broker facing outfit.

I am not sure what impact this will bring as most mortgage brokers seem to go direct to the main lenders now anyway. Packaging seems to have disappear completely so I fail to understand the decision.

It would have been much better if they just closed that one brand and left the others the same as it is diluting the mortgages available to the consumer this way.

Top 5 things to improve your house value this summer.

2009-06-14T13:26:00.000+01:00

No intros, straight to the list.....

1) Insulation ready for the winter
2) Replace old windows while the weather is warm
3) Change the garden around
4) Fit some security to your house
5) Have your boiler serviced

By doing any of these you will give the impression that you love your house and you are working hard to maintain its appearence and livability!! This works well for those looking to sell.

They are not expensive projects really and you should get back the money you put in plus some. More importantly it makes your house stand out to the prospective buyer.

House prices are steady and rising!! Why

2009-06-13T10:26:00.000+01:00

Short post on this one as it is covered in the media very well. House prices are rising but not because of normal mortgage lending. Nope!!!

They are rising because people cannot be bothered to move and are happy sticking on their current mortgage. Therefore supply and demand tells us that less houses on the market means prices rise.

Its simple really and the coverage in the media should not be giving out these false positives, in my humble opinion of course.

SVR's: June 9th 2009

2009-06-12T08:38:00.000+01:00

Standard Variable Rates

No real change since April but I thought I would update you all just incase, as my base rate predictions are about to change. At the time of writting this the following rates are correct as found on each lenders website. I will be updating these lender svr's each month. It is important to follow the trend in Standard Variable Rate's as they move more often than not against the bank of england base rate.

Abbey = 4.24%
Alliance & Leicester = 4.99%
Nationwide = 2.50%
Halifax = 3.50%
Mortgage Express = 2.50%
Northern Rock = 4.79%

Interest rates will rise in August

2009-06-11T08:33:00.000+01:00

It is a bold statement, but looking at the finacial services sector we can see that things have stabalised. They are not getting any better at the moment but the ship has turned.

With many companies folded over the last year we are left with just the big players and a few carefully managed smaller firms that are set to flourish. I make this interest rate prediction with sound knolwedge that the finacial waters that had turned to ice are now moving due to quantative easing and a record low base rate. Therfore the Bank of England will now be disscussing when is the right time to move rates back up.

With savers still getting the raw end of the deal we are seeing more and more pressure to raise the base rate. Therfore I predict that in August we will see the base rate move up by point five percent and then hold for a further 2 months then a quarter of a percent for the next 4 months taking us into 2010 with a base rate of 2%.

If my interest rate prediction is correct we can expect all mortgage compaines (brokers, lenders and IFA's) returning to a profit with everyone eventually remortgaging to secure the lowest fixed rate.

Now is a good time to look into what lenders have what on offer and move yourself into a position to take advantage. Still be mindful of the lower LTV's that are available.

Interest rate prediction and Mortgage markets

2009-06-10T10:26:00.004+01:00

So with interest rates said to rise in the coming months, we will see a big influx of remortgage deals coming on. However with most lenders in the UK having cut staff to stay afloat during the downturn they will not be in a posistion to handle the extra business.

So where will this business go?

With only a small amount of mortgage packagers left running we should see them picking up the slack. However they are in the same boat as the lenders....

During the quite period of the last year did our mortgage lenders rise to the challenge and invest in technology to cope with more applications with less bodies to process them? Probably not.

Therfore I expect lenders to price them selves out of remortgages because they do not want the business. Thus leaving the consumer nowhere to go. I think we will be expecting a massive increase but in reality it will all be enquiries as it will be difficult to place people on the right deal.

Time will tell, however as the market turns we should not be expecting lenders to lend. Hey who ever thought that the power players that lenders are actually had its customers interests at heart?

Interest rate prediction for July

2009-06-09T08:33:00.002+01:00

Enjoy the last month of a record low base rate, my prediction is that the base rate will rise in August. We are not talking masses of rises just yet and the rise back to the region of 5% will take almost 2 years. It will be nothing life the vertical drop we saw in 2008

So make the most of that extra cash you have for your very nice SVR and get ready to get your remortgage on. So my predictions for both June and July are to hold as we are.

August will see a change.......

Mortgage Markets

2009-05-20T10:08:00.003+01:00

Over 70% of the homes in the United Kingdom are owned by those living in them. For the majority of families, buying their residential dwelling is the most expensive and arguably the most important single purchase in a lifetime. Except for the most fortunate, buying a home has to be undertaken with the assistance of a mortgage from a financial institution. It is for this reason that mortgage finance plays such a prominent role in the lives of individuals and families.

To start with we will describe the types of financial institution that offer mortgages and explore the underlying determinants of the demand for mortgages. We will go on to examine how mortgages and related products are marketed, and some point in the future we will conclude with a look at trends and developments in the market place.

LENDING INSTITUTIONS

Mortgage lending was once the exclusive preserve of the building societies. Until the early 1980s, these mutual institutions were responsible for facilitating over 80% of mortgage finance for private residential purposes. Radical deregulation of financial markets took place during the 1980s, enabling different types of financial institutions to enter the mortgage market, all part of the general breakdown in barriers between different market segments. Today mortgages are available from several different types of institution.

Retail banks:

The retail banks are made up of the following sets of institutions:

• the larger banks with wide product ranges, national networks of branches, call centre operations and Internet banking services – these include Barclays, HSBC, Lloyds TSB and

• other smaller retail banks such as Clydesdale, Cooperative and Yorkshire;

• overseas and specialist banks who offer retail banking services.

The retail banks are the largest financial institutions in the UK economy. It is therefore surprising to some to learn that they were not major players in the mortgage market until comparatively recently.

There are several reasons for this:

• As banks were responsible for holding the current and deposit account balances of personal and

business customers, the government sought to regulate them through monetary policy controls.

Faced with these controls, banks found it impossible to offer mortgages alongside other types of

commercial lending.

• Prior to 1982, building societies offered mortgages at rates of interest that were often lower than the market rate for funds. The system was administered through a recommended rate system operated under the auspices of the Building Societies Association.

• It is only in recent times that financial institutions have used the demand for mortgages as a

springboard for lucrative cross-selling of mortgage related products and services, such as general and life assurances.

• Prior to deregulation the building societies operated a recommended rate agreement through their trade association, the Building Societies Association (BSA). The members of the BSA agreed

recommended rates of interest for basic savings accounts and mortgages on a monthly basis. This ‘cartel’ broke down in 1982 and opened the door to new entrants. With the abandonment of the recommended rate system, mortgage rates converged on market rates of interest and this made mortgage business more attractive to the major banks and other financial institutions. Moreover, most of the larger banks recognised that it was in their interest to offer customers a ‘one stop shop’ for financial products in order to develop longer term customer relationships.

Some of the major building societies shed their mutual status to become listed public limited

companies. Some of these were in turn purchased by larger banking groups.

Banks are incredibly powerful players in the market. When a customer approaches a bank for a

mortgage, the bank may already have provided a whole range of general banking services for the

same customer, enabling a complete financial profile of the customer’s financial and personal

circumstances to be formed before a risk decision is taken.

As a result of these factors, all of the major retail banks now offer mortgages. Not all banks are the same, of course. Some see themselves as general providers whilst others seek to offer more specialist services.

As well as offering mortgages for residential purposes, many banks provide:

• mortgages for part business and part residential purposes;

• commercial mortgages;

• mortgages for high net worth clients.

Building societies

The building society industry developed as a response to the massive increase in the demand for

housing during the industrial revolution of the eighteenth and nineteenth centuries. Building societies are mutual organisations and as such are owned by their members. They began as small housing clubs where people would get together to build up a fund that would be used to purchase (and often actually build) houses for the members.

Despite the fact that many modern building societies offer virtually a full range of banking services, they retain their mutual origins. To this day, every member has a single vote regardless of size of savings or borrowing balance, so no individual or group can dominate or control the society.

Until 1986, building societies were restricted by law to offering only retail savings accounts and

residential mortgages. The Building Societies Act 1986 enabled them to extend their services so that they could compete with retail banks to offer more ‘mainstream’ banking services. Further

deregulation followed with the Building Societies Act 1997, which eased many of the controls that

remained.

As well as residential mortgages, building societies can offer money transmission services, other types of lending, land services and insurances. They are allowed to own subsidiary companies and invest in associated bodies (such as the LINK shared cash dispenser network). What distinguishes societies from other banking institutions is that they must continue to operate in a manner that is consistent with their ‘principal purpose’ as laid down by the above Acts:

• at least 75% of their lending must be secured on residential land; and

• at least 50% of their funding must be derived from retail sources – mainly from personal customers.

One of the great difficulties that have faced the building society industry in recent years is that many of the larger societies have relinquished mutual status to become public limited companies. These include the Halifax (which was the largest building society prior to conversion), Alliance and Leicester and Woolwich. In most cases, this change in corporate form has brought with it instant dividends to members in the form of ‘free shares’. In turn, considerable pressure has been brought to bear on the remaining societies to shed their mutual status. Following a spate of conversions in the 1990s, the building society industry has stabilised to some extent. Most societies have pledged themselves to mutuality and have become more pro-active in selling the benefits of this mode of operation.

Next time we will look into insurace compaines and supermarkets

How to select the best mortgage lender

2009-04-23T17:22:00.001+01:00

Most borrowers always ask the most obvious questions about fees, what the interest rate is and how long the term is. However there is so much more you need to take into consideration. In your quest for the best mortgage lender there are many steps you need to take and many questions you need to get answered before you make the next move. Some of the questions below relate to using a mortgage broker.

What is their level of experience? how long have they been a financial advisor ask them if they only sell mortgages or do they cater for insurance, pension and investments.

What understanding do they have of the mortgage market, economics and now the credit crunch?
While no one can predict what the bank of england will do with the base interest rate will do tomorrow, next week, next month or years if your looking long term. Your advisor should be able to guide you with facts and figures to support each case.

How long should you lock into a fixed rate for?
If the economy is at its lowest it might be wise to lock in for longer, When the credit crunch first arrived people were still taking fixed rates for 5 years and now they are stuck when the Bank of Englands base rate is at 0.5%. Your broker should be able to advise you on this.

If you follow these steps and asked these questions, along with the usual questions you will feel more comfortable making the big decision. You should also get a better understanding and sense that your mortgage broker is giving you sound advice. Compare these answers to others you have got whilst shopping around and you will get a consensus for what is believed to be true.

Doing this research yourself will expand your knowledge and you will feel more at home in the mine field of financial services.

Once all of this has been done, you will feel confident that you have made the correct decision and found the best mortgage lender for your needs. Dont do it all on your own speak to a professional mortgage broker.

Use a Mortgage Broker is a Good Idea

2009-04-23T11:42:00.001+01:00

Getting yourself a mortgage is stressfull, take it from me. So why should you use a mortgage broker and what will he or she bring to the table?

Well, to start with even just applying for a mortgage is a bit of a daunting process there are usually 20 or so pages to an application form, but on the whole most consumers feel they are able to make this step. Some people in the interests of saving a few quid try to tough it out on there own and go straight to a high street lender and try to get the lowest interest rate. If you do this and your not 100% sure what your doing you could make a costly mistake. Using a mortgage broker or mortgage professional is a good idea for Joe Public in search of that perfect mortgage and although there is sometimes a fee involved, it is nothing compared to the procuration fee a mortgage broker would recieve when you complete your mortgage.

A decent mortgage broker will know all of the current deals available across all lenders not just the ones from the high street, with this knoweldge he/she will also understand the different requirements for each lender. Say for example you only have 3 months bank statments. One lender might require 6 months but if the affordability stacks up they will accept 3 months. Its these little quirkes that make using a mortgage broker the right choice for many.

Who would benefit most from a mortgage broker?

New home owners
People who are uncertain about there choices
Those with a blip on the credit file
Those who want to understand the requirements
You might want a more personal service
Let someone else worry about the stress and the constant chasing

Obviously its completley up to you but my advice....... give one a ring, it doesnt cost to talk

SVR's: April 29th 2009

2009-04-22T08:01:00.002+01:00

Standard Variable Rates

At the time of writting this the following rates are correct as found on each lenders website. I will be updating these lender svr's each month. It is important to follow the trend in Standard Variable Rate's as they move more often than not against the bank of england base rate.

Abbey = 4.24%
Alliance & Leicester = 4.99%
Nationwide = 2.50%
Halifax = 3.50%
Mortgage Express = 2.50%
Northern Rock = 4.79%

4 Things For Low Mortgage Rates - Do You Fit?

2009-04-21T12:34:00.001+01:00

With new low mortgage rates below 5% advertised by mortgage lenders, it would appear it's a good time to refinance or purchase that property you have been dreaming of? After all, it seems we are in the region of the bottoming out of house prices.

When you look close at these wonderful rates published by mortgage lenders it is difficult to see who will actually qualify for these deals and in my view the rates published by mortgage lenders are not proportionate to the rates that will be recieved.

Recently the administration that goes into a mortgage application has risen dramitically, I have been working in this industry for 7 years now and all we were doing is reducing the amount of signatures required, pay slips to be provided etc. Due to recent events all mortgage lenders have now increased the criteria to get a mortgage thus tightening thier compliance belts and managing the risk accordingly.

It is now not un comman to be asked for 2 years financial rcords, for someone who has never missed a payment on any credit.

Those with a small credit blip, like a late payment will never be offered these fantastic rates which are advertised.

So what are Mortgage Lenders basing their decisions on:

Your credit report

Your income against debt

How much deposit your putting in

Value of the house your purchasing / Remortgaging

So what has changed:

Deposits are given more weighting to the balance

Your credit rating required has gone up in the last year or so

Valuation values of homes are down significantly

More documentation is required

It is a great time to buy still, but visit a mortgage broker or lender to make sure you qualify for these good rates. Then you wont be disappointed. Happ house hunting.

Get a 10 year mortgage

2009-04-21T12:20:00.001+01:00

Buying a home is one of the biggest decisions for all of us. However most of us will need to get a loan from a finacial institution to make this a realtity. As most people are now aware after the credit crunch and all the press surrounding it, mortgage lending is the backbone of this economy and all economies around the globe. We have found ourselves in recession which all started back from Northern Rock and other lenders running out of readies because the american banks had no money to buy books of mortgages from us.

Banks used to lend you the money against the house value you whished to purchase or remortgage. The monthly cost of your mortgage depends on many factors but mostly its the loan borrowed over time. Then an interest rate is added to this and your interest rate depends on your credit score. I would like to focus on the time aspect of borrowing for your mortgage and what benefits you can get by reducing the term of your mortgage.

The only thing you need to remember is the less time you take to pay the loan back means the less money it costs you. In some cases its not unheard of to pay twice what your house is worth over the term of your mortgage. However if you were to over pay by £50 then you will be suprised at how much that comes down. I am quite luck as I am with Mortgage Express and they have a system called "choices" which allows me to overpay when I can.

I am overpaying currently and my mortgage term has shrunk by 8 years.

Thus in later life I will be better off financially and I will not have to worry about paying mortgages or even using the extra money to top up a pension fund.

It is important to work out your outgoings and what you can afford to pay off, always talk to your lender or mortgage broker before making any decisions.

Mortgage Rates

2009-04-21T10:26:00.002+01:00

If you are planning to buy or refinance a new home the ideal solution for you is to study the past to the future evolution and the outlook for mortgage rates.

Was that line confusing? Could it be said a different way? Of course it could.

Before getting your mortgage look at the history of rates and predictions for the future.

Now they both say the same thing but both are written differently and its that jargon you need to get through.

Before deciding to sign a contract for loans you should be sure that your interest rate of loans is in sequence with current trends. Is also essential to decide on the refinanciaciny buying a house make the most of trends in its favor as a consumer. Currently we are slowly seeing an upturn in mortgages and this means that house prices are on the up. So now is the optimum time to buy......... If you can afford the heavy deposits still required.

The main reason of those seeking to refinance their housing loans is capitalized during the term of low rate of interest is available. If you wish to take advantage of the lowest rate for your needs refinance is essential to monitor any movement in the economy that affect interest rates. For the time being it looks like interest rates will be low as many industry professionals expect the Bank of England to keep the base rate at 0.5% for the foreseeable future. The longer this goes on the lower rates will follow because Mortgage Lenders need to keep the books turning over a profit and whilst they probably do not want to lend in this market we will see things move out of nesscity.

Sometimes a decreasing mortgage rate is not only the reason for the choice of a refinance mortgage loans. As an example, people who have adjustable rate mortgage or SVR loans usually prefer a fixed interest rate mortgage refinance, When you have a fixed rate you know that whilst you have the mortgage fixed for that term you will pay x per month. Those who are surfing the SVR wave at the moment are watching closely to see if rates move north and then we will see a big influx of fixed rate mortgages.

When the mortgage industry is suffering as it happened during the year 2007, it is really necessary to update the trends in terms of the mortgage loans market. It is a duty to consumers to be extremely careful in their efforts to maintain in the way of the factors that greatly affects the cost of the loans. We need to be looking at every stat that is released. House price index, inflation, best buy tables, newspapers, economic studies etc.

It may be best to consult or have the services of professionals who can handle loans for you at this time because of changing criteria all the time.

Interest Rate Prediction - Remortgage Now?

2009-04-14T15:04:00.001+01:00

Mortgage rates are so important to the decision that everyone has to make about their mortgages. Are they going to hold the base rate or are they going up? It is very difficult to see a drop in current interest rates for the forseeable future. Whatever the interest rate is today will always fluctuate up and down espcially in the current economic climate.

So what affects mortgage rates?

First and foremost is inflation. Whatever that inflation factor is will make that mortgage rate fluctuate. A general rule of thumb here is if inflation is on the up then so will mortgage rates. At the time of writing inflation is on the decrease but this decrease is slower than the rate of base interest is dropping. Why is this? In an effort to keep inflation in the green the Bank of England has reduced interest rates faster to halt the slide.

So what affects inflation?

Directly affecting the inflation factor is the supply and demand of the economy. It is a very complicated subject just keeping an eye on the inflation factor will help you forecast the general direction of mortgage rates. If you want to keep your eye on the economy you should measure the Pound against other currencies. Also a tinker in the stock market will show if the economy is picking up. Its important to remember that economy, inflation and interest rates are 3 different subjects but are very closely linked.

In times gone by any change in the mortgage rate will be 1-2 % and probably will bottom out at 4% and never more than 10% even in the most volatile times of history. However we are now at 0.5% the lowest in its history and we have been frozen at this for the last 2 possible changes. More often than not rates will move but they will only move at half or even a quarter of a pecentage point. It is highly likely that the next review of interest rates will see the first rise in years.

So what does all mean to you?

Bank of England base rate will probably never be less than what it is now but that doesnt mean that mortgage rates are at their lowest yet. you should talk to your lender about refinancing now as it will not be long until the optimal time comes. You should research the market and follow the best buy tables daily. It could help you pay off some bills, improve your home, or just having extra money. We are approaching the tipping point ladies and gentlemen so lets make the most of it before we are back up to the 5% region.

Mortgage Approvals are on the rise

2009-04-09T13:07:00.001+01:00

Hometrack together with other AVM providers have given some good news to the uk mortgage secort. In their latest report they have discovered that the number of home buyers was on the rise at almost one firth of last month. Even though the average house price continues to drop it was found that the houses were sold more rapidly than in Feb. More good news followed from the bank of england by figures which showed mortgage approvals for homebuyers rising by 20 percent. Lets also not forget that the first quarter of the year is notoriusly bad for mortgages anyway as people are not submitting offers on property over the festive period. Tie this in with interest rates and house prices sliding it is no wonder people have sat still.

Leading experts have warned that these steps towards recovery could be scrubbed of the board with weak economic growth, rising unemployment and poor availability of mortgages still. Property prices in January dropped 0.6%, their lowest monthly fall since May last year. Feb showed that house prices rose again so we can detirming from this that we are approaching the tipping balance of the econmic scales. The yearly rate of fall in the property prices is now 10.3 percent which is not very good. Staying on the positive end of the scale, lending statistics of Banks have shown almost that we approved 6,500 more loans last month compared to a 6 month average of 30K ish :). If we can maintain these figures for the next 2 months we could declare the horribly titled "credit crunch" over. So what else is on the horizon?

With the base rate is at its lowest for all of time, most borrowers are raking in the cash with some awsome low mortgage rates, especially people who have got trackers. As a result remortgages fell by 4% in February to just under 33,000 and remain considerably below 53,000. A few years ago remortgages were comman place as this was a way to stave off the dreaded SVR, now in an extrodianry turn of events that SVR is everyones friend. You can bet your bottom dollar that as soon as the slightest sniff of a rate hike, people will scrammble for a remortgage to fix the rate.

Hometrack ran a poll of around 1,800 agents and surveyors across England and Wales have put these spikes in interest down to people searching for a bargin. When is the best time to search for a bargin? Right at the bottom of the trade. Which is even better news as if people buy then money starts to flow around the very baron river that is financial services at the moment. Prospective home buyers are registering with estate agents not in droves but a steady increase in month on month.

Most if not all analysts say that these figures offer a first indication that sinking housing market may just have bottomed out. Howard Archer of HIS Global Insight says: 'Any recovery was likely to be gradual and fitful for some time to come.' Thats a great observation but how can we expect to recover to an end point that is no where near the start point. Mortgages will never be the same again so why are we continuing to look at year on year etc...

Independent Mortgage Advice

2009-04-08T11:18:00.001+01:00

There are many different types of loans on the market from tracker mortgages, fixed and variable rate, buy to let, shared equity, liftime, discounted and the good one at the moment of SVR to name but a few. First time buyers and existing home owners should get independent mortgage advice to explain these terms as well as tell them all about the mortgage market; which has changed a lot over the last twelve to eighteen months. It is also advisable to revisit or visit for the first time mortgage protection products and criteria.

Even if you have thoroughly researched the available products from an online resource and have a good knowledge of the different terms, there are still over 1,000 different deals available from over 100 lenders. That is a lot of leg work to do to find the best deal. Currently the mortgage products are droping and the market is becoming less grey but understanding the pitfalls is a different story.

You can get independent mortgage advice from a mortgage broker. There are two types of brokers, one that will search the whole of the market for you to ensure the best deal is found. Plus they can offer their expert advice to you and often for free. The other is a broker that has to work from a selected panel of mortgage lenders. Both are equally good as long as the panel is large enough to incorporate each of the major high street banks. So whether you are serious about looking now, are due to remortgage soon or even if you just curious if you are able to get obtain one in the current climate a mortgage broker can help. In fact with business levels at an unprecidented low they will probably bend over backwards for you.

Before selecting a broker for your advice, do ensure you first of all ask that they have the correct qualifications. Secondly check if there is a fee. If you are happy to pay a fee for their service great, but there are many great fee free brokers who offer a service which are just as good. If you do go with a fee free broker, you do have the option of walking away if you aren't comfortable with the service provided at any point.

2009-04-08T10:17:00.001+01:00

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Should you buy now?

2009-03-28T08:33:00.000Z

Yes is the answer, if you have the deposit needed to obtain your mortgage now is the time to buy your house.

Inside UK mortgages is happy to predict that the interest rates are at the lowest and will move higher over the course of this year and house prices are begining to creep upwards so its starting to turn into a sellers market again. However your not to late, the are some fantastic properties available and almost at a knocked down price.

If you have had your eye on your dream home now is the time to get it.

Mortgage protection

2009-03-27T08:30:00.000Z

It looks like a shift in consumer patterns is showing that more people are aware of mortgage protection and how beneficial it is.

This must have come about after people have been facing redundancy at have looked into their mortgage protection products. It has probably been discussed between friends and then they check their mortgage protection product.

Some people may not have mortgage protection so what do they do?

To start with the lender that provides your mortgage will probably also provide mortgage protection as it is in their interest to keep the payments flowing. So check them out for a quote.

You can also go to a comparison site to check mortgage protection or directly to a mortgage broker who will be able to provide you will a quote for mortage protection.

Don't delay, get it sorted. It might just save you a nasty surprise one day.

Next base rate change?

2009-03-26T16:30:00.000Z

The next review of the bank base rate is not due until the 9th of April, so what are the predictions?

With just over 2 weeks to go inside the mortgage industry we are seeing some signs of improvement. Not much admittedly but none the less a little glimer of hope.

With this in mind it is my prediction that the base rate will not be lowered. Why?

3 reasons mainly, by holding the base rate it would signal to the country that we believe the crunch is either over or at its worst. Thus injecting some consumer confidence into the market.

The second reason I have is lenders will be able to stabalise their product offerings thus bringing out slight variations to their products and increasing the amount of schemes available.

The last reason is about face..... If the BoE drops the base rate to 0% then they have no room to manover. It is my guess that we will stick with 0.5% for the next few months whilst quantative easing is still making its mark on the economy.

More will be revealed in two weeks or so I would guess.

A long time

2009-03-26T08:30:00.006Z

Its been a long time since I posted as we have been making some improvements to the systems at work in order to survive what I now think is the last mile.

We are on the home straight and pushing for the finishing line however we have expended a lot of engery at this point in the race. Like with many firms I do not think its going to be sprint finish for us more a limp accross the line but those who have been smart and predicted the length of the slump may well use this opportunity to start to push on so they are at the front of the pack.

So why am I optimistic that the end is in sight....

House prices are up and the amount of buyers is also. Tie that in with the news that lenders are lending again and things start to look better.

It is widely thought that financial institutions have shed the number of employees it needs but maybe a few last tweaks are planned. This inturn will promote job security.

Let's see where we are at the end of April

Beware of fraud

2009-03-23T12:57:00.000Z

United Kingdom mortgage borrowers and those searching to remortgage their property or property portfolio want to beware because mortgage fakers are on the ascend. The menaces of mortgage fraudulence remain to loom large on the face of global recession and financial turmoil.

Over fifty policemen apprehended eight gentlemen and a adult female who are suspected to be involved with over £forty million mortgage fraudulence in southeast of England. Remember behind all mortgage fraudulence there is to be a squad of pro fraudsters who act in a circle to make their systems look authorised and lawful.

Therefore how ought you fend off becoming a dupe of mortgage fraudulence? Here are a couple of angles:

Educate Yourself: study and reread every the docs exhaustively. If you do not understand anything and then ask queries. You will be able to even consult your lawyer in front of signing any agreement or docs. Be sure to hold on to copies of papers with you.

Know your limits: nearly all of the mortgage fraudulences are flourishing as the fraudsters bid a price that's substantially above the average market price*. A lot of people in their hurriedness and in concern of suffering such tantalising bids finish up as mortgage fraudulence dupes.

Acquire character reference: they are important to get sources and be sure to check it. Don't judge the mortgage lenders from the means they appear or however convincingly they speak. The fraudsters are by and large middle aged people with blameless looks and know how to allure folks. Think back the nine people that were apprehended recently, they all are of age between twenty-nine and seventy-three.

Don't hurry matters: Remember that hastiness brings concern. The fraudsters could be interested in rushing along matters up just you had better keep your calmness. Managing your household constitutes an important decision of your life. Take time and all essential cautions prior to making any business deal.

House prices across Europe go down

2009-03-13T07:04:00.000Z

Remember that holiday home that always increases in value? Well homes across the whole of europe, including the UK are still falling. This is the first time we have really heard anything of our neighbours but its also quite comforting to know the French are struggling like us. Not very PC I know but its my blog and I don't like the French!!

Back in good old england, we are told the house prices are up and down. I have heard 2 reports saying they are down and 1 in favour of a rise. Intresting thing about this is between them all is a range of 5% now how can these indexes be so far appart?

Oh well, let's go with the safe option and say house prices are down. The end

Consumer confidence is creeping up

2009-03-12T07:47:00.000Z

News filtering through that stats show consumer confidence is growing slowley in the financial markets. I have been harping on for ages about how if everyone is back out and buying the credit crunch will be over quicker than expected.

So this news is filling me with confidence, let's just hope I am right.

All major firms have released what will be the worst figures ever produced. They have cut their overheads significantly and this means that with a little luck they will return to profits this year. With profit brings stability. Not only for compaines but those people working for the company. With this stability it filters across the whole economy.

So come on people, splash out all of that saved money and let's save England without the governments help :)

Bad news for brokers

2009-03-11T07:04:00.000Z

A recent survey has shown that of all those people that seek professional advice, 70% of them actually go direct to lender.

Of the 30% that do stay with the broker nearly all of these are made up of people with buy to let portfolio's or first time buyers purchasing a new build.

In a world where mortgages are getting simpler by the day and the consumer is becoming less affraid of mortgages and the news is educating everyone these stats can only get worse in the favour mortgage brokers.

You CAN buy in London

2009-03-10T09:44:00.000Z

The mayor of London Boris Johnson has announced a scheme to allow people on to the property ladder in the nations capital.

The details of the scheme are quite complex and you need to have a PHD to work out if you qualify and the chances of qualifying if you have a PHD are slim to say the least!!!

So what have I worked out...

You can rent accomodation at 80% of the rent. So you can save the 20% until you have enough deposit to buy the property your renting.

Forgive me for being cynical here, but is this not a way to just get cheap rent!! Wouldn't it be better for you to still pay 100% of the rent and then when you want to buy they give you 20% back on what you have paid.

Other news in this section include more money has been made available to kick start stalled housing projects in the current economic climate, help for government agencies to house people and new legislation on what permits a tennant!!

IMLA says bulk selling will be back in ........ 2011

2009-03-09T07:25:00.000Z

The intermediary mortgage lenders association seems to be touting around the year 2011 like its the new millenium bug year. They say that the process of borrowing to lend and then selling the mortgages to someone else will be back on in 2 years time.

Great news for a mortgage broker, mortgage packager and smaller lenders. It may well be too little to late by then and to be perfectly honest do we really want to go down that route again.

I think its all well and good saying it will be back, but is never going to be in the same form as it once was, do the IMLA really believe this is not going to become the greatest regulated activity of any activite. Hell, I expect the FSA to bring out a new permission just to even talk about it.

£12.5bn and the FTSE hits a mega low

2009-03-08T07:07:00.000Z

HSBC are looking to raise 12.5bn over the next few months but this has brought about reprocussions in the financial markets. the FTSE and the Dow Jones hit record lows when the news broke.

It seems very strange to me that while some people are predicting that the end of the problems are near others seem hell bent on smashing the dreams and organising share sales to increase capital.

I think the main issue here is HSBC have not been in the news and seemed to have coped quite well but in truth have just been fortunate enough to be so profitable that they have appeared stable even though they have been losing money much the same as everyone else. Well, losing their monsterous profit margin.

Still, you can't trust the stock market at the moment it has more ups and downs that the average speed bump riden town these days.

Mortgages in the SUN !!

2009-03-07T14:06:00.000Z

For a long tim, The brits seem to have had an obsession with buying 'a home in the sun'. There are many TV shows now on that advertise just this very subject, as well as many adverts on the TV, News papers and websites. They all entice people to find their little piece of heaven in warmer parts of Europe and further out with a popular destination being in Florida.

Many people are finding this idea and it being implated in thier brains that this becomes a life long dream, a goal, the kind of thing in life that says to them "I've done it, made it and now I can relax" A lot of Brits are actually making this a reality, everyone knows someone who has a place in the sun. So why cant you?

The reason people buy these properties are either for investments or just to have a place to emmegrate too after retirement.

Some surveys have shown that a massive 33% of all British residents intended to make owning a foreign property a reality.

Some cannot wait to make the jump much earlier in life, either as a permanent residency or as an investment that will be lent out and then wait until retirement. In most countries such as Spain, there are limited opportunities, to obtain mortgage financing locally. Those people that do opt for local financing have trouble with local mortgage brokers who do not think twice about charging a rediculous fee. The moral of this story is to show around and find out who is trustworthy. If you can visit the area, speak to other ex pats and get a feel for how they achieved the dream.

A little while back before the infamous "credit crunch" UK mortgage lenders were more likley to lend to you for a second property abroad than they ever were. This is now not the case as most people are finding it difficult to secure money against one property that is in the UK.

You are more likley to have success in borrowing the capital if you can prove that the property is self funding by way of renting it out to holiday makers. If your feeling confident it is very possible to rent your place to a local whilst you plan your next move. This gives stability of a sitting tennant rather than the fluctuations of a seasons.

You could of course, buy a home abroad, that needs some work, This could be work you do yourself if you prefer to be doing things rather than sitting on your sunbed. Also it is important to remember that the only commodity in this would that is free is your time and enthusiasum. However, you should be looking to make a profit from your work, x days, x ammount for a new kitchen adds x ammout to the value of your property.

Refinancing your house in the UK is fast start way to getting the required funds for your dream house. It is not without its perils though. Getting equity released from your home is likely to bring about a higher mortgage and leaving you short on available funds to make the improvements or to cover the new mortgage. Also be careful in the current market as property values in the UK are shrinking and releaseing say 20% equity will actually be close to releaseing 30% of the value.

House prices - what's going on

2009-03-07T07:18:00.000Z

According to various website and estate agents expect home sales are asking for a large asking price. This means that propert prices will start to increase in around 3 months time.

This is due to demand increasing at the fastest rate I can remember. News filtering round that prices are on the up means that the bottoming out of the market is almost done or done in fact so if you want to buy now is the time. Its almost like a reverse christmas sale!!

Provided you can get the large deposits required you will find yourself making a nice return on your money. We are not saying that property prices will rise anything near the rate they did in the 10 years previous to the last 2 years but it would be a fair assumption that you will get more for your money than you would in the bank.

Some "experts" are predicting that propert values will rise by 10% for the next 3 years. That number is high in my opinion and far to early to predict in these turbulent times.

Anyway, the more people talk about it the more wind their is in the sails.

Interest Rate March 2009 goes down

2009-03-06T09:59:00.000Z

As expected, the interest rate has been lowered to 0.5% and that means more savings for home owners with mortgages.

The reality here is now some people the banks are making no money and for the lucky few people, the bank is actually reducing the capital borrowed as some peoples mortgage is -0.6%.

My mortage express mortgage has been halved since my fixed rate ran out in january and another 1% has come off the variable rate. This came in two 0.5% reductions in both Feb and March.

Also news that the Bank of England will be releasing £75 billion into the financial system over the next 3 months. Again as predicted it will not be in the form of bank notes but it will be released similar to a video game.

Some lucky soul will just buy whatever they want (stocks, bonds etc) and when they enter the ammount they want to purchase this becouse fake money however when it arrives at the bank it will be shown as real money.

A simple way to look at this, you go to the shops and buy a news paper for 20p and you hand over a Monopoly £1 note. Has it hits the shop keepers hand it turns into real money.

Brilliant eh? Now who wants that job?

Good times for mortgage times brokers

2009-03-06T06:59:00.000Z

As the credit crunch still has its jaws firmly locked around the uk mortgage industries neck. It has brought about some interesting partnerships to beat the times.

Non moreso than Mortgage Times (Vision Network) and Legal and General. It was hardly the best kept secret in the world but what it does definatively offer is broker stability plus better rates.

Mortgage times are now offering to their Appointed Representatives and those Directly Authorised using the club is the chance to be paid more and be paid on exchange. Actually the choice is down to the broker if they want the money on exchange giving greater flexibility to the broker.

On top of all this the broker is put at ease that an international company is handling the money.

Mortgage times IT staff have been working flat out and have produced a slick new system that allows its brokers to claim direct proc fees, use a conveyancing system and add a £300 referral fee this will then autoclaim the proc for you.

So using the new tech to the full potential could net a mortagae broker adding £300 broker fees the best part of £1000 per case and the reasurances that moneys are handled by L&G and a solicitor.

It seems Mortgage Times are on the right path to bringing back its glory days and bringing back the glory days to you the mortgage broker.

Bonus's and Pay

2009-03-05T18:09:00.000Z

The FSA (financial services authority) have made strides today to regulate how much people are paid via salary, bonus and commission. It is a bold move and one that is going to require a lot of work and more importantly planning.

The move surely comes about because of press related to some bonuses some banks wanted to pay after they took handouts from the government.

How exactly they will regulate this is hard to say. My guess will be a percentage of profit caps and a cap on percentage of salary. However as is always the case with large corporations there will be some people who are just a cost base. Take an IT support person for example, their contribution to a large organisation is much harder to measure against someone who is paid x and made y profit. It is anybodies guess how this will work.

Having said how difficult it is and how it cannot work for all situations I commend the FSA for stepping up to the plate. I look forward to reading all about this soon.

Interest Rates 05/03/2009

2009-03-05T07:45:00.004Z

It is highly likely that the Bank of England will reduce the base rate today to 0.5%, this would mean massive savings again for people with mortgages and less money for those with savings.

More importantly this will leave the Bank of England with little room to manuver in the coming months. Only half a percent will be the new standing rate and another cut from there may not be realistically possible. There is talk of that the Bank of England will be moving to inject some money into the economy. Not by printing bank notes and giving them out but by buying back bank assests to give the UK banks money in there pockets to start the lending process again.

It would be a bold move but as the UK Banks have already been bailed out and not passed these fotunes back to the consumer it would need tougher lines to ensure that the banks do not get rich off this scheme without handing any out to us.

Another problem with dropping the base rate again means that it eats into the profits of the banks, thus slowing the lending rate again and whilst its favorable to borrow most do not seem to be able to get the money they require because they do not meet the tougher criteria set out by the banks.

If the Bank of England was to increase the base rate, it might encorage people to save more thus inturn giving the banks more money to play with. The only real definate in all of this is we have to do something and which way we choose to go will always rock the boat for someone.

Follow up post will come after 12:00 GMT today when the announcement is made.

House prices are down!! (Who to believe)

2009-03-04T18:14:00.000Z

It is almost impossible to put your finger on the correct answer here. No sooner did they announce that house prices are up they then announce the are down again. The only saving grace here is the reports show they have gone down less than they said they went up last month which gives us a net figure of 0.1% up over the year!!

I watch with a very keen eye over the comming weeks as Northern rock moves back to the front of the field. I would assume that now more people are qualifying for a mortgage as the raise the LTV bar that house prices will start to move north again.

Mortgage Express SVR tracker

2009-03-04T11:34:00.000Z

I have been reading around the internet that not all Standard Variable rate mortgages from Mortgage Express are tracking the base rate.

I can confirm that mine definately is as I saw another drop in mortgage payments this month as the rate fell to 1% in Feb. I have run my calculations and can confirm that I was paying 3.5% up until the 10th of Feb and from then on I was paying 3% which is in line with tracking the base rate to the day and the penny.

A rough calculation on these rate changes will show that on a £100,000 mortgage each 0.5% works out to around £65 per month on average over the longer and shorter months.

This can change of course if your lender does not bring the rate changes to you straight away.

If you need to change your mortgage it is always a good idea to seek professional help.

Financial shares

2009-03-03T18:24:00.000Z

Who wants to dabble in the stock exchange with financial institutions. There is a huge profit to be made also a huge loss for others. I would imagine at the moment its is very much like playing russian roullette with a two chamber gun. The odds of successfully picking a good share to back cannot be any higher than 50 50 even if you are inside the industry.

Everytime you pick up a paper there is one bad news story, followed by somebody taking too much bonus. How can you expect share prices to increase if you have nothing to base your research on.

If I were dealing in millions of pounds at a time I would just stick with what I got. Its too voiltile and the risk outweighs the possible profits in my eyes.

What do I know, I am not a trader!!

I'm in negative equity

2009-03-02T12:18:00.000Z

I checked my house price today against a very reliable tool we have at our disposal in the office to find out I am in negative equity as of today.

Hey its not that bad because its only £950 but when I look back its important to understand that at its maximum I was £20,000 in the black and over the last 6 months my house has lost the best part of 10% of its value.

Ii have no intention of selling soon so it really doesn't make that much difference to me but I would like to see it pushing back up the chain if you don't mind.

Mortgage lending is still going up but is still down ?

2009-03-01T08:10:00.000Z

That's the headline from an industry magazine. So does it mean to real people.

What they are trying to say here is year on year lending figures are down but month on month lending figures are up. Let's play around with some made up numbers so you get the idea.

Jan 2008 there were 50,000 mortgages sold
Jan 2009 there were 10,000 mortgages sold
Feb 2009 there were 11,000 mortgages sold

So we increased lending by 1,000 in feb but compared to last year we did 39,000 less.

For people to start feeling the effects of rate cuts or even feeling comfortable in their jobs we need to have lending again to similar 2008 levels.

If you remember correcrtly when the government bailed out these banks not even a year ago it was on the firm understanding that they would lend at similar levels as before. So what has happened to that great idea?

You need a 15% deposit

2009-02-28T08:00:00.000Z

New reforms moving around the financial services watchdog the FSA and other industry bodies are toying with the idea that at least 15% will be the minumum deposit everyone would require to get a mortgage.

This is another hearsay story to be honest but there is no smoke without fire. It was not long ago that the prime minisiter said that 100% lending should be banned and now we are hearing stories that the maximum lending should be 85%. Personally I think it will be capped at 90% when a new legislation is formed.

This will of course bring about a new set of problems. First time buyers will find it very difficult to get on the ladder so what does our wonderful government think of that? Are their new incentives being drawn up or does everyone have to fight for themselves?

Is it time to flush the economy with cash?

2009-02-27T08:46:00.000Z

Should we be thinking of printing some money for us to feel wealthy again?

I have been of a firm opinion that consumer spending is the only outlet to these terrible times. So if we printed money and lined everyones pockets so they could spend more would it solve the problem.

I think not to be honest, the problems have raged on for too long now and any money that drops into peoples hands will go staright into savings. Why would you spend money at the moment whilst half of the country is worried about losing there jobs.

Its a vicious circle and one that is still spiralling downwards. It is my fear that we will have to wait until it takes its natural course over the next 5 years until it burns out like a hurricane without water.

Does anyone else have any suggestions?

RBS and Lloyds Group

2009-02-27T08:01:00.002Z

Both of these giants are reporting loses in the billions and RBS are posting a UK record loss for the last year.

Any company can fall to the current econimic climate but really.... To post a lost of these numbers only spells miss management. Even if the world entered world war three I don't think these firms would be able to loss as much as they have.

In general the way of the world is someones loss is another persons gain. So is there someone out there who has inherited billions of pounds? No is the answer.

What used to happen is the banks would ring up a big bill of mortgages and then sell them to an unsuspecting bank in the US. Now these banks stopped buying and our banks were left with these mortgages and no way of servicing them because they had not factored in keeping the book.

What should have happened is they should have sold to a multitude of banks then they would have been covered at least so they had time to change the model.

So the answers here are:

Nobody is rich
We have seen terrible management
We all pay the price

Interest rate of 0%

2009-02-26T18:19:00.000Z

The buzz arounf the mortgage market is that another rate cut is due to come in. To top this news its is being mooted that we may even see interest rates slashed to zero, that's an interest rate of 0%.

Obviously this is all just hear say at the moment as we never know what the MPC are going to do with the bank of England base rate but I am a firm believer of there is no smoke without fire!!

If you are lucky enough to be on a tracker mortgage and especially lucky to be on one of those nationwide 1% minus the base rate it is possible you will be getting paid to live in your house.

If you are unlucky enough to have paid your mortgage off and you are a saver.... I am sorry to report that there is no sign of it ending yet although the FTSE will soon be a good bet I think!

What is a good rate?

2009-02-25T18:26:00.000Z

Its all a matter of circumstance really, if you have good credit and a decent deposit you should be knocking on the door of 3%. If you have bad credit and not much of a deposit you will find it difficult to get a mortgage or you will be in the 7% bracket.

Its probablly best to stick to a tracker deal at the moment or at least do not fix your mortgage for more than 2 years.

At some point the rates are going to have to go up to pay back the government borrowing so be careful and read as much press to stay in touch with the rates as when they start to move you need to aswell.

Subscribe to this blog to get the low down on what to expepct over the coming year.

Mortgage Express

2009-02-24T21:55:00.000Z

At the time of writting this post Mortgage Express are offering some very good deals to exisiting customers. Those on an SVR will find it very easy to move mortgages with MortgageExpress and those who are in a fixed rate can still take advantage of not having an early repayment charge.

You should either contact mortgage express direct or a mortgage broker to find your best options.

Lending news

2009-02-24T08:14:00.002Z

So the new lending from Northern Rock has been splashed accross the front pages of this mornings news papers. Does this mean people will sit up and take note.

Certainly it has pricked up the ears of my friend who has a mortgage with northern rock.

All we need now is for other lenders to read the papers and jump on the free lending for all band wagon!

90% mortgages are back!!!

2009-02-23T21:30:00.002Z

Northern Rock are going to make a £14bn splash back into the UK mortgage market, It is also claimed they will be putting up loans with an LTV of up to 90%

The publicly (tax payers) owned bank will start lending on a larger scale after a year of trying to lose customers. Out in the current market conditions it is difficult to move unless you have 25% deposit or equity. Decreasing the amount of money required to obtain a mortgage will certainly help the whole industry and as predicted in an earlier post we are pretty sure this has come about because of a few signs of property values increasing again.

Mortgage lending has run dry as banks have refused mortgages to buyers unable to stump up a deposit of at least 25%.

When Northern Rock collapsed in 2007 it was one of the UK's biggest and most active lenders with new products being launched nearly every week, its sudden downfall was blamed on pushing irresponsible mortgages of up to 125%. When it was taken over by the public it was ordered to cut its lending rapidly in order to repay the massive £27bn it was lent by the government.

It will be reveal today that the bank has already repaid £18bn of the £27bn debt. Whats more in a major change of direction, An announcement is expected that it plans to lend £5bn this year and a another £9bn next year to allow it to expand its mortgage lending. Albeit I dont think the good old days of 125% loans will be surfacing anytime soon!! In fact our Prime Minister has actually come out and stated that 100% mortgages are to be banned!! Well Mr Brown.... Thats not exactly sticking your neck out is it?

Time will tell but I think this will be the start of other lenders coming back to lending money. Everyone has been sitting around playing a waiting game and looking for someone to make the first move. Nowthis move has been made with other once aggressive lenders come back or will they wait and see what happens?

Are jobs safer?

2009-02-20T08:35:00.000Z

So as we approach the last month of quarter 1 2009 are things more stable? Is your job safer?

It looks like things are settling down at least. Things might not be on the up yet but the decline is slowing and many companies are finding it easier to work in these market conditions.

Many companies have reduced staff numbers and overheads to a skeleton crew. The effects of salary saving here is starting to stabilise companies. Other companies have put together a "salary sacrifice" option and most people out of fear of not getting another job have taken the option.

Some industry magazines are saying that green shoots are showing as we reported a few weeks back but I think their will be more casulties before we can honestly say the crisis is over.

How is your company coping in the current climate?

Feb 2009 rate cut

2009-02-19T08:17:00.002Z

The meeting notes have been released from the feb 2009 base rate meeting and it shows that the MPC were unanimous in the decision to cut the base rate by .5%

Many thought that it would not be as clear cut as that but it certainly leads to the real possibility to cut rates again in March.

My money is on another 0.5%, across the mortgage industry people are linning up for a 0.25% cut and a few people think it will stay the same.

What do you think?

Asking prices

2009-02-18T08:06:00.000Z

Again today the industry magazines are reporting that asking prices are going up. To me that does not say they are all selling but some must be. I don't think their ever was a problem demand for housing its just those that created the demand could not get a decent mortgage without a decent deposit.

However the news that the asking prices are moving north follows news that property values increase by 1.6% last month is a step in the right direction.

If this trend continues then the banks will feel more comfortable lending at higher LTV's bringing 1000's of players back into the game. This could be the start of an upturn.

How long will lenders wait to feel comfortable?

This is anyones guess but we own the lenders and our govenment should be pushing hard down this line.

We will wait to see what happens over march.

FSA have the banning stick out again

2009-02-17T08:08:00.001Z

Recently, the FSA seem to be banning brokers all over the place. If this is a natural occurance the maybe when we were awash with money we just never heard about it.

Let's look into the details to see why they were banned!!

How to increase your house value

2009-02-17T07:53:00.001Z

1) Get planning permission for an extention or a loft conversion.

It is relativley cheap to get the permissions for home improvements. If you cannot afford the cost of the home improvement then just getting the paper work in order before you sell will increase the value. This will not be applicable to a remortgage as such but you may be able to borrow the cost against the new improved value before you start.

A valuer is likely to take into consideration the new value and in effect recommend to the bank that the money they lend you will be worth the cost.

You are effectively borrowing the money to make the improvements against the equity you have in the property and then increasing the value back above the equity you borrowed.

2) Garden works

Never underestimate the value of a new fence or a nice patio. These can reap the rewards when in comes to selling. It shows you have taken care of the land your property is built on and you have expertly marked your land so there will be no disbutes with neighbours. Also a finely trimmed patch :) is much better to look at than a whole heap of brambles!!

3) Decorating

If you are thinking of decorating go for neutral colours, stick with just paint!! Its far cheaper and gives a moden feel to the property. It allows your prospective buyer to use their imagination to decide what they want to do. This tip of course has a floor and that is if you live in a listed building and its a small cottage with a thatched roof, nice beams inside. Then the modern look does not help the value unless it is expertly done!!

How mortgages will change

2009-02-16T08:16:00.002Z

It is common knowledge now that the uk mortgage industry has changed forever. So what do I think will change.....

Firstly, there will never be a tracker / svr that does not have a collar. Before the "credit crunch" happened banks could never see the bank of england base rate drop this far so the thought of a collar was only for those over cautious with their lending. I think for sure these collars will be in place for ever more.

Secondly, 100% lending has dissappeared for the foreseeable future. Fixed rate mortgages have a life span. For aurguments sake let's say. 2 year fixed rate. Lenders must be 100% sure that the property value will increase over 2 years and the base rate will not exceed the fixed rate. So with pressure on the banks to lend at lower rates they need to counter balance the risk. They really do not have an option than to stick at lower LTV's.

These are the most important changes I can see over the next few years but it is almost changing recently, whilst all of the banks are watching one and other it is possible that the industry will move slowley and predictably. Now if 2 lenders start making some waves and risking it a bit to cash in. Then we will see some serious action.

Until then........ Sit tight.

Mortgage express and your mortgage

2009-02-13T08:33:00.000Z

Do they want your money?

No seems to be the popular answer at the moment. The offer for waiving the ERC is still running and they are still not taking any new business.

So what are the plans for mortgage express?

I think they will just sit there on the money coming back from loans, they then pay off bradford and bingley. New lending is not on the agenda however mortgage express were very big in the buy to let markets and I can see a specialist arm of the company forming to take on this increasingly popular niche.

Still, my debt is with them so I will watch it closely. Maybe they could go bust and I would not have to pay my mortgage back:)

Fat chance

Will rates come down further

2009-02-12T08:15:00.000Z

Who knows is the best answer but let's play out some of the options.

You still cannot get a decent fixed rate over a long period and even if you find one that looks attractive then be sure to check out the fees involved. After a little research I can see a fixed rate of 3.39% fixed for 2 years. However if you move lenders or products after 2 years the actual cost is nearer 4.69%.

So if the base rate comes down again how is that going to any effect on the mortgage industry if all the lenders are playing it super water tight safe? Therfore I say no, they will not drop it again.

Will it go up? Unlikley too. Our government seems to think the answers to all of our problems are lowering the bank of england base rate. It has not worked so far but they will not put the rates back up due to fear of looking incompetant. The major problem for them in the future is people are now happier paying a lower rate for their mortgage. If we were to increase the base rate at the same rate as it decreased we could well have riots in the streets!!

House prices go UP!!!!

2009-02-11T08:17:00.001Z

Figures released by the nationwide house price index have showed a growth of 1.6% now is this a sign of upturn? Too early to tell but we are going to keep a watch on this just in case.

RBS bonuses

2009-02-11T07:24:00.000Z

Hey, before I start I very much like a bonus much the same as everyone else. However at what price do the rumored bonuses come at?

All bonuses all over the world are either linked to profits or individual performance. Generally if you are higher up the corporate ladder your bonus would be linked to company profits. If your a cog in a large company you are likely to have your bonus linked to your / team performance. There are many exceptions to these statements but on the whole these would be true.

So who / how and where do the RBS guys fit in. Nobody can claim that its profit related bonus. RBS not long ago announced that they lost millions. So where and who qualifies for a performance related bonus. The only place I can think off is customer service based staff for dealing with a higher workload whilst others were made redundant. What if you exceptionally cut costs and greased the antiquated processes and saved money. Would it be right to get a bonus?

Nobody knows how the scheme is going to be divided up however RBS need to think very carefully before announcing any such strategies.

Did you get a bonus? Or are you in the pay cut camp?

Importance of Mortgage underwriter

2009-02-10T15:59:00.000Z

A Mortgage underwriter is a person that has the perfect knowledge about mortgage loans and taking calculated risks. A Mortgage underwriter can help you to get the approval and pre-approval for the loan. Mortgage Underwriters usually have a set mandate. For example a level 1 underwriter could approve loans of up to £200,000 at an LTV of 75%.

It is quite realistic that each lender will have a different set of scales and different criteria to hit each level.

Generally a mortgage underwriter will look at your financial circumstances, your credit history and the criteria for the mortgage product you wish to apply for. Once your mortgage application has proceeded to “offer” more often than not this will come with a set of conditions. So for example, 3 months bank statements, p60 and residency and identity clarification. The underwriter will then tick these things off and once completed a firm offer will be on the table subject to valuation.

In some “advanced” parts of the mortgage industry will evaluate a mortgage underwriter on 3 levels. Compliance: how many times a mortgage has been processed outside of criteria. Speed: Not so much an issue at the moment but when the banks were flush with money it was important to give out as many loans as possible. Profitability: If a lender serviced its own loans it would be possible to rate an underwriter against arrears. If too many applications fell into arrears maybe the client was not suitable for the product. It could be the case that the mortgage should never have been issued.

Should you use a broker?

2009-02-09T10:56:00.000Z

Well, firstly lets get my bias opinion out of the way. Yes.

On to the facts, a mortgage broker will provide you with an expert opinion of mortgages available to him or her. These do not include mortgages you can get by going directly to Abbey, Halifax or others. Heres an example of where using a broker will be more expensive:

Brokered Mortgage:

Broker fee £199
Valuation fee £359
Application fee £499
Interest rate = 3.29%

Direct Mortgage

Broker fee £0
Valuation fee £499
Application fee £499
Interest rate = 3.19%

So in conclusion a broker could make you an offer and make it sound very attractive as the application fee is the same as the lenders and you even save some money on the valuation fee if the case is going "packaged". However you would be financially better off if you went to the lender directly.

So what do brokers bring to the party?

A broker will have an indepth knowlege of the market and can offer you products to protect your mortgage and you family. A broker can also move your mortgage application from one lender to another with relative easy and they do most of the leg work for you. So generally for a hassel free mortgage application with sound advice a mortgage broker is a good option.

In conclusion I like to use a broker and will continue to use a broker as this is a big decision and getting advice of a massive financial commitment is important to me. Should you wish to go direct to a lender this is your choice of course.

Leeds BS slice 0.6% off of thier 3 year fixed rate

2009-02-08T11:18:00.000Z

Leeds building society have recently cut a chunk out of what is now classed as a long term fixed rate. The actual rate is 4.25% fixed for 3 years. The question is, do you think that the rate is good? I think its questionable, certainly its the lowest over 2 year fixed on the market but it would be difficult to see a decent SVR getting up passed there in the current conditions.

Still, If you safe in your job and you like to know what your fixed payments will be, its a good option but I can see other lenders trumping this fairly soon

Brokers cannot survive on proc fees

2009-02-07T10:11:00.000Z

When mortgages were flying of the shelves faster than a nintendo wii, mortgage brokers rarely used to charge a fee. The proc fees and volume of mortgages they were doing ment that the income was plenty.

Now the new world is biting hard and brokers are finding there feet in now what is a very competative market. According to a survey 60% of mortgage brokers charge an up-front fee to compensate for time spent on setting up the deal. It used to be the case that if a client did not fit at one lender there was always another lender that would take them. Nowadays if a client "falls out of bed" with lender A the chances are lender B will say the same thing.

The good news is that 16% of brokers have said they have never charged a fee and would not be doing so in the future.

Commercial properties are dropping

2009-02-06T10:29:00.000Z

The value of a commercial property is apparently over 25% lower than list time last year accourding to the IPD (Investment Property Databank). This is the largest drop since.... all time or when records were started back in 2001.

The reason beign cited here are small businesses going bankrupt and the general dwinddling of the economy. What is my advise i hear you ask? Well if you have a dead cert money winner and have been thinking about starting your own business, now is the time to buy that plush office.

My Mortgage Express Mortgage

2009-02-06T10:22:00.002Z

The day after the interests sink to a new low.. Thats right we now the bank of england has set the base rate a 1% (Feb 2009) the SVR on my mortgage product is 3%. Thats exactly half what I was paying 2 months ago.

I am told that the standard variable rate for mortgage express products differs from mortgage to mortgage so you should telephone them and ask. I have called them a number of times over the past few months and they answer the phone promptly, no automated press this and that number. You dont actually need your mortgage account number either just your address, your name(s), date of birth and how much you payment is. Give them a call on 08457 248 248.

Consumer cofidence is down... Shock

2009-02-05T08:19:00.001Z

According to the nationwide consumer confidence index, consumer confidence has fallen again in January. Apparently the consumer confidence level is half the level it was this time last year which is in direct relation to the growing concerns about the economic downturn.

We all know now that in 2008 the UK fell into a recession, and it seems people are still struggling to come to terms with the money they have and how much I want to save. The UK government is doing little to enhance the confidence of UK consumers, it appears as though things have gone quiet on the financial front. Maybe the extremely poor weather in early February has taken the focus of the economic crisis over time being. People are still losing their jobs, house prices are still falling, savers are not getting any money.

When will our government actually do something positive to turn this country around, why does it always appeared to me that we are always the worst hit?

I've just had another thought that I should create a new blog focuses on interviewing technique for those people made redundant so have a chance against the other 2.6 million people were out of a job.

Stick or fix

2009-02-05T07:09:00.000Z

Ladies and gentlemen, with the looming BoE rate announcement just hours away the mortgage industry is very much in 3 camps.

Camp 1: Lower, the economy is starting to show signs that it wants to move. Let's give it a nudge and watch it save the UK.

Camp 2: stick, we have done enough its just a matter of time now the wheels are moving.

Camp 3: higher, we need to contribute to our savers who will put more money in if we increase the interest rate they received.

Me, I am in camp one because I have a large mortgage and could do with the extra funds. However, if I think about the country as a whole. I think we should stick the same.

What do you think?

Are mortgages the key to this country?

2009-02-04T07:20:00.000Z

An interesting topic wouldn't you say. We all know by now that the sole cause of this credit crunch came about because our mortgage lenders were borrowing large sums of money from bigger banks in the US.

This all dried up and then our banks had to close its doors because it could not sell the debt on in bulk. So why did this effect the like of woolworths, MFI, zavvi and many others?

I walk through my high street and the shopping center and each day the is a new closing down sign followed a few days later by some boards coloured a dirty brown shade. I think this re-enforces the comman denominator here that we all believe our mortgage and house is the main concern. It far out weighs the need for new shoes or even to pay off the credit card on time.

When the chips are down us Brits freeze and do nothing and wait for someone else to make the first move. So with consumer spending down the whole country grinds to a halt. All of this because we relied on the banks of the USA.

One thing we as a country need to do is remember we need to survive on our own, we need to understand that the USA has made some pretty bad decisions lately and we followed them down this road. What if we were to say, no thanks I'll try it my way?

Would this problem still be going on or would we be beginning to prosper again like the ignorant French?

Oui Monsuier

BSA say "no" to rate cuts

2009-02-03T10:44:00.002Z

With interest rates set to become a topic of conversation again in 2 days. BSA (Building Societies Association) have announced that they do not want another interest rate cut. Its no real surprise really as building societies are generally funded and founded by savers. And with savings rates falling its customers may seek alternate forms of investments.

I have sympathy with some savers, for example a pensioner who has saved for 60 years will be seeing a decrease in income and quality of retirement years. There are others though who want higher interest rates soley for personal gain.

The impact of rate changes are having a "shaking" up of society. Those who do not have savings and have large debts are getting a nice helping hand. Those with no debts and savings are not getting richer as fast as they were. The intersting point for me is the poor are catching the rich at a faster rate than ever before. So the credit crunch is squeezing society.

What would happen if everyone was equal ?

Bank lending is UP!!!

2009-02-03T07:20:00.000Z

So reports coming out from those people that are still in a job in Englands capital, are saying that lending is up and mortgage advisors should be prepared for an upturn??

In my view they have had the best part of 18 months doing nothing. If they are not ready now they never will be.

What does this mean?

Not a lot really, everyone in the industry is waiting to see the numbers. Even if the numbers do start to add up, no one will see the hard physical cash until at least 8 weels later!! No hands up everyone who thinks their company can last another 8 weeks?

Will your mortgage lender pay you?

2009-02-02T08:29:00.000Z

The FSA (financial services authority) does not think that borrowers are taking a tracker mortgage will end up being paid by lenders even if the bank rate falls to 0%. However the FSA believes that when these mortgages were first taken to the thoughts of the bank rate becoming zero was not even possible. What would happen to this country if the cost of borrowing was zero? The problem for most banks if they cannot borrow from the larger banks therefore they have to maintain their savings rates to get in additional funds.

What a lot of banks have done is introduced a collar on thier tracker rates which means if you're a tracker mortgage of 1% plus base and today in January your mortgage rate would be 2.5%. If a lender applies a collar to this tracker mortgage of say 2.5% then even if the Bank of England's base rate drops by another half percent in mortgage would remain at 2.5%.

Those lenders that never envisaged that the Bank of England base rate would drop this low are facing problems because they are contractually binded to lower their lending rate to track the BoE base rate.

Lowest ever fixed rate by Woolwich

2009-02-01T15:24:00.000Z

So the competition in the marketplace is rapidly increasing. After last week's announcement by Abbey to drop its fixed rate to 3.39% the Woolwich has launched a new fixed rate mortgage at 2.29% for Woolwich this is record-breaking territory. It is safe for 1.5% lower than any fixed rate is produced before. This new product will only allow a fixed rate for one year and after this year it does move to a highly competitive 2.29% tracker. The Woolwich have covered themselves by only offering this product to borrowers who have an LTV of 60%.

I think this is good news, the means we are on the right track and a competitive market always good for the consumer.

FACT: at the end of the third quarter 2008 the Woolwich (lending arm of Barclays) provided 32% of the U.K.'s new net mortgage lending.

Why should you use a mortgage broker?

2009-01-31T12:48:00.000Z

I work with many mortgage brokers and they all have a wealth of experience in the financial services industry. What I have noticed though is you get two distinct types.

Those that take every bit of business and push it through as fast as they possibly can. Earning quick fast cash for you. Then there are those that really look after you, give you the personal touch and get you going back for more next time around.

Now not sideing with either of these approaches but one thing is for sure your likely to get the same advice from both types. A broker will weigh up all of your options, your credit profile and initial circumstances. 9 times out of 10 they will come to the same conclusion.

The problem at the moment is it is so difficult to predict the next swing in the financial markets.

Your still much better off seeking professional advice from these helpful buch of people.

Can the President save your job?

2009-01-30T11:24:00.000Z

Well this is something I am very interested to find out for obvious reasons. So there is talk of a near one trillion dollar deal that is going through the motions over in the US and all of the world economic issues stemed from the US. Now we know that there is plenty of money over the pond but what is going to happen to you and me?

I think that it will take many weeks to get the deal put in place and even more weeks for the US to feel any benefits. Then a month or so for it to start to roll here. So even in our wildest dreams anything the new most powerful man does is going to take 3 months to get here. Now hands up everyone if they think their job is safe for the next 3 months?

What will be interesting is will our so called closest friend share the wealth or is this where we find out that those puppet strings have been cut?

The most critical problem for our economy

2009-01-29T12:45:00.000Z

The Treasury committee today has stated a lack of bank lending is the most critical problem for our economy in the short term. They believe the government should ensure there is highly available credit and this needs to happen swiftly. The report from the Treasury committee has also stated that what we really do need lower interest rates to maintain and stimulate economic growth our country's savers must not be forgotten the report suggests that possibly the Treasury committee should seek measures that will also support savers through these treacherous times.

On a side note to this report the Treasury understands that even though we are suffering an economic downturn the government should still be trying to hit the 2010 child poverty target.

Redundancy and mortgage savings

2009-01-29T08:17:00.000Z

I get the general feeling in the UK at the moment that people are scared to spend money incase they lose their jobs. That's fine in my book because I am very much sitting in that boat. However what if we were to throw caution to the wind?

If those people who are saving the extra money were to go out and spend it?

Then this would bolster the profits of other companies thus securing jobs in the process and then would things start to move to calmer waters?

All I ask is what is our Government doing to ensure public confidence is returned to its good people. Surley this is the key to a safe future.

My advice....... A national holiday where everyone needs to spend at least 200 quid? Who's in?

Mortgage packagers

2009-01-28T08:26:00.000Z

Where are they now?

With lenders either closing and going back to their home country or others pulling the plug on distribution business we find that a small number of packagers are left with a small number lenders lending.

Lenders seem hell bent on moving the money provided by us the UK tax payer. To save their own skin and in the process moving to close avenues to do new business. This is bad for all parties. New business consultants at the lender, underwriters, admin and even the post room at your local packager are struggling to hold on to job.

Any chance of survival? The hopes were to look to 2009 for inspiration but that has been as usful as a slush puppy to an eskimo.

Lenders have done nothing to improve the situation and our government has done nothing to pressurise the banks into doing something. So in a last ditch attempt ans straw clutching exercise we look to this man across the pond, Obama for his wonderful world saving package.

Fingers crossed everyone.

London buyers

2009-01-27T09:12:00.000Z

Are those green shoots the politicians are talking about actually starting to show through?

Well the amount of buyers in London are on the rise supposedly and the surrounding areas are also reporting a rise. This begs the question to me. The first parts to feel the house price collapse were in the north and london was the last. So going on these very early predictions are house prices in the capital going to rise higher and faster than anywhere else in the UK?

We will have to keep an eye on the situation.

New tracker from Abbey

2009-01-26T08:12:00.000Z

Products LIVE from Friday 23th Jan 2009

Abbey has introduced a wonderful new range of three-year tracker mortgage products, with rates starting at 3.99% up to 75% LTV. Interesting is this as its the first rate to drop below 4% for a 75% LTV. The flip side to this is I am now paying 3.5% at 100% LTV. The power of the credit crunch works for some :)

Anyway, the max loan size available on these products is £350,000

Other news coming out of the Santander subsidury is that you can now fix your large loan at a rather unattractive 5.24% over 10 years. This makes me believe that the Abbey has its eggs nicely nestled in the "rates will be low for many years" basket. We will see in due course if this is a cool move or an attempt for more disposable income to nudge the cashflow along?

5 things to do with your monthly mortgage savings

2009-01-25T09:24:00.000Z

Well done, the reason you have found this blog post is because you are currently paying less for your mortgage per month than you have been. Either because you switched to a better deal or as the current market stands you has slipped nicely into the warm arms of your standard variable rate.

So what should you do with your money, we are going to put forward a few ideas and discuss the pro's and con's of each idea. The common goal is to get yourself into a better position for when you do remortgage.

First option

Mainly for older houses, get central heating installed or perhaps you have needed a new boiler for a while but never had the funds. With home information packs and EPC's now required, should you wish to sell your property in the near future you will need to show that your home does not cost a lot of money for energy. This will increase both the likleyhood of a sale being made and will also add value to your property.

Second option

Double glazing will increase your house value for 2 reasons. One being similar to the above with energy savings and the other giving the impression that your house is well cared for. New windows from the front of a house look amazing and if you combine new windows with a tin of paint you can revamp the exterior ten fold. In the winter months it is a good time to get quotes for windows as generally the window companies are less busy because people do not want the windows taken out and the cold air coming in. See our guide on how to deal with window sales people.

Third choice

Kitchens and Bathrooms, these are the most expensive area's of the home to decorate. You may not always have enough spare money lying around to get these improvements done but now you have. Do not underestimate the size of these jobs, I have just finished the kitchen in my house but this is because I have been lazy and had to learn the skills from scratch! Did you know besides the bedroom the kitchen is the most used room in the house?

Fourth choice

Extensions, conversions and conservatories. Square footage = house value. We don't really need to go into any more detail on these maters. Things to remember are planning permission, get plenty of quotes and chose a time when it doesn't rain every day. I am no weather man but I think if you can call the english weather correctly then you need to get yourself down the BBC pronto.

Fith choice

You can just sit on the savings or plough the extra back into the mortgage to decrease the loan size and even the term of your loan. You will see no benefits now but later in life your circumstances will become much more comfortable allowing you to plan your pension and retirement years with a few extra pounds to do so.

If you can do any of the above you will be doing yourself a favor somewhere in your life. Hey if you can do 2 or 3 before the mortgage rates go back up then you will be miles better of.

Resource links:

How Does Today's Economy Affect Your Mortgage?

2009-01-24T11:01:00.000Z

Countries worldwide are facing a recession, and the UK is no exception. The Bank of England has already cut base interest rates down to 1.5%, and there are plans to reduce it even further. If you have a mortgage on a house, you may have many questions buzzing around inside your head. Many analysts are saying that the UK could face a very deep recession, so what does that mean for your mortgage? What does it mean if you want to get a mortgage?

With a variable or capped mortgage, you could of course be benefitting a great deal from the low base interest rates. However many people decide to opt for a fixed rate mortgage because of the security it offers - and the interest rates on these mortgages are significantly higher than 1.5%. There are options you can explore if you happen to have a fixed rate mortgage, however, to try and seek a benefit from the worldwide recession.

The whole process of refinancing your mortgage is made extremely easier if your mortgage is at the end of its term, and needs to be refinanced. However if this is not the case, talk to your current lender; find out what they can do to help. But don't stop there - check with other lending institutions and find out what products they have, and what they can do to get you out of your current mortgage.

Unfortunately for everyone, including new homeowners looking to get their first mortgage, lenders are also tightening their credit. Even though the Bank of England base interest rate is 1.5%, lenders may charge a higher premium to someone who, even a short time ago, might have qualified for a lower rate. Even further, lenders could refuse a mortgage to someone who may have qualified for it in the past. With less credit available, everyone is being very careful.

There is, thankfully, help on the way from the government. Banks are getting money from the government in order to grant new mortgages, so it may be possible to obtain one for the first time. It is prudent to ensure that your credit is in good standing and that you have a good debt ratio, or else you may not be approved - even with an influx of cash for new mortgages.

As always, check with a financial advisor or a mortgage broker to explore your options. While rates are low, mortgages approvals aren't increasing due to a tightening on credit. It is difficult to obtain a mortgage in the UK, but not impossible.

80 20 mortgage

2009-01-23T09:14:00.002Z

I am sorry to say you won’t find any of these around anymore, an 80 20 mortgage was very popular with northern rock borrowers, some people actually went with 90 10 mortgages with them.

An 80 20 mortgage used to be an excellent choice for people that did not have a deposit to put down on the property, this is the 20 part of the 80 20 mortgage. What some lenders used to do was lend the 80% as a mortgage to get you a low interest rate and then sell you a secured loan on the same property for 20% thus giving it the name an 80 20 mortgage. Other advantages of an 80 20 mortgage sometimes ment that you did not have to insure yourself against the mortgage because it appeared as though you had equity to cover it. This part of the 80 20 mortgage was often overlooked and felt a little “dirty”.

When people took out an 80 20 mortgage they 20 part had a fixed interest for the entire time of the mortgage, this was sometimeVAs confusing for the borrower as 80% of the loan would eventually fall into the clutches of interest rate fluctuation whilst the 20% would remain at a fixed rate for 25 years (for example).

Statistically people were taking new mortgages out just short of every 10 years, this number was dropping during the boom from 2000 to 2008. It is expected that the number will start to rise as people wish to stay where they are in the comfort that nothing is changing. When the market picks up agin it will be forever different but I doubt the 80 20 mortgage will ever return.

HSBC say "overpay while you can"

2009-01-22T18:49:00.000Z

We have mentioned before about the benefits of overpaying on your mortgage if you can. Today HSBC are telling thier customers the same thing. Apparently they will be writting to thier customers on a variable or tracker mortgage and telling them the benefits of overpaying. I am all for overpaying and reducing costs and length of the loan but something doesnt add up for me.

Are HSBC doing this to be nice?

We like to think so and if this is the case then a nice big pat on the back for them as they are looking after the customers.

Are HSBC doing this for any other reason?

Maybe, what if by selling the idea to some 30,000 people and explaining the benefits people will start to over pay. Now if everyone overpays £100 per month thats a staggering £3,000,000 in the banks pocket to play with each month.

Call us cynical or something similar but thats a lot of money for just being "nice".

Guide on when to get off the SVR wave

2009-01-21T20:21:00.000Z

So your at the end of your fixed rate or you have been on the standard variable rate for some time. What should you be doing and when should you move?

What you should be doing at the moment is either saving the extra money or spending it on home improvements and push the property value up. This will enable you at the right time to move to a mortgage product with a better rate once the financial markets stabalise.

At the time of writing this post the bank of england base rate is 1.5% and most lenders offer an svr of 1.5% - 2.5% above the base rate. So it would be safe to assume you are paying an interest rate of around 3 - 5%. What the bank of england will do at the next review on the 5th February 2009 is still a mystery, I am plumping for it to stay the same however it could go down. We have already broken the barrier for the lowest ever interest rate since the bank of englands inception so we can expect they are not shy in cutting again. With the economy still showing no signs of picking up it would be difficult to raise this rate.

As each month passes at these low rates the banks are more comfortable offering lower fixed rates (see earlier post regarding 3.69%). So the ideal time to move will be just before the BOE starts the rate rise again. This does not constitute advice but if a fixed rate gets anywhere near the 3% barrier I will be moving products.

My reasons for this are as follows. To get house prices stable we as a country need to start moving home again, to start people moving we need to stop the increased amount of customers falling into negative equity. Couple this together with a higher consumer confidence and job security increasing things will start to move. Then it is the right time to switch to a fixed rate.

So keep watching the news and one day, our government might get one of its hair brained schemes off of the ground or mortgage lenders might start playing ball and come out of their shell again.

Of course, I will post here when I am moving mortgage and my reasons for doing so. In the meantime, keep your money and bide your time. The consumer revolution is coming and we need to take full advantage after what has been a dire 18 months.

3 steps to avoid repossession

2009-01-21T18:34:00.000Z

This article is a quick guide on what you should do if your mortgage falls into arrears and your mortgage lender is on your case.

Firstly, Call them and take notes of the conversation. Then follow the call up with a letter confirming what was discussed. In most cases you will be asked to make extra payments and if you are the one initiating the communication line you will be the one who benefits. Each time you speak to your mortgage lender follow the same process. You could just deal with them via letter but responses may take time to filter through the postal department.

Secondly, Never take the first offer of extra payments. Work out what you can afford and subtract a percentage of this amount then offer to pay this. Nine times out of ten this will be enough to saticfy your mortgage lender. If you stick to the overpayments until the arrear is paid off then everyone is happy. If you are finding it difficult or your circumstances change repeat step 1 at the earliest possible oppourtunity.

Thirdly, If you end up with a summons do not think this is the end of the road. You must attend court, if you cannot afford a solicitor then telephone the advice lines or citezens advice. You can still save your home by attending court. You can put your version of the story accross, you can make a fresh offer, you can appeal to the judges better nature. The important thing to remember is you will be repossessed if you do not attend.

Finally, It may seem as though losing your home is the end of the world but in the grand scheme of things its not. Sure its not much fun and it will bring about uncertanty and stress. Please remember that many people have overcome such financial problems and it will honestly all hang on communication.

Please do not delay, call your mortgage lender now.

Overpay your mortgage?

2009-01-20T18:52:00.000Z

We have looked into people who come in from the fixed rate, but what about those who have always been on the tracker and standard variable rate mortgages?

For those lucky individuals who are not cash strapped at the moment, and have been able to continue to pay the same monthly payments this will be taking years of the term of the mortgage. For example: if your mortgage was around £1000 per month in October the minimum payment would now have dropped to some £690. If rates continue to stay at the historic low rate and they continue to pay their £1000 per month they would be saving over £15,000 and with a little bit of black finish paying their mortgage nearly 10 years earlier.

If you can do is a fantastic idea to overpay on your mortgage, even if you can just afford an extra £25 you will see the benefits in later life. Some lenders will allow you to overpay by up to half of your monthly payment and some prefer to take a fixed amount extra on top of your monthly payment. Mortgage express for example having choices system which allowed you to overpay any amount and this amount can be changed each month.

There are many mortgage calculators around that will calculate the benefit of this, you can find some by clicking the calculator link on the far right hand side of this page.

Or maybe you should save more money by moving your gas and electricity providers?

Are you underinsured?

2009-01-20T14:15:00.000Z

As a result of the prolonged credit crunch it appears that over half of the people renewing their general insurance cover are underinsuring themselves by as much as 10%. This could soon escalate into a bigger problem for all of those who have underinsured themselves, what would happen if your house burnt down?

Granted, everybody needs to look at some cost-cutting measures and if you decided that you can underinsured yourself by 10% for content only than this would be acceptable. You must realise though you cannot underinsured the value of your property, buildings insurance. Buildings insurance is what pays you should your house fall over and this money is used to rebuild the property to the same standard. You'll be in breach of your contract with your mortgage lender if you do not have adequate buildings cover.

It is a good idea to see if you can save money by switching. You can do that here....

Fixed rate breaks 3.69% barrier

2009-01-19T20:24:00.000Z

On the 16 January 2009, legal and generals mortgage club (intermediaries only) will be launching an exclusive two-year fixed rate only for remortgage customers at 3.69%. This product has been created by Alliance & Leicester who are now part of the Santander group. However it's not all good news the maximum LTV will be 60% and the arrangement fee is a whopping £1499. Although you will get your valuation fee refunded upon completion and Alliance & Leicester will provide the legal fees the maximum size you can get is £250,000. Although the rate is a good headline rate this does nothing for first-time buyers or those with a higher LTV. In my opinion lenders are still not forthcoming with decent rates for people who find themselves in a high LTV or negative equity situation. You could look at this as a lenders are starting to break the mould that mortgage rates must still come down and the LTV thresholds need to rise. There is very little purchase business going on at the moment but that is no surprise.

Are you feeling any benefit from interest rate cuts?

2009-01-19T19:54:00.000Z

New data released from the CML is showing that mortgages are now taking a lesser percentage of the average income. According to this data interest payments typically consumed 18.2% of all each monthly income during November 2008. This is basically down to mortgage products being lent to people who are low risk because there were LTVs were remaining low. In November first time buyers took out mortgages in the region of £1.4 billion. Compared to the 1.8 billion spent in October.

This proves that the market is still functional provided you have a large enough deposit / equity in your original purchase. The next step for the government to increase consumer spending is going to be much more difficult task. Those who are currently profiting from lower rates are doing nothing more than putting the money under the bed and waiting for the market to bounce back to previous levels. The longer this continues the worse the situation will be.

If you are feeling the benefit from interest rate cuts what are you doing with the savings you make each month?