Archive for the ‘Mortgages’ Category
With utility, fuel and mortgage costs increasing we are pleased to announce that we have teamed up with The Home Advisory Service to offer our clients a FREE comparison service for Gas, Electricity, Home & Mobile Phones aswell as Broadband, Bank Charges and Credit Cards. Please see the utilities comparisn page for more details (or click this link which opens in a new page) Utilities Comparison
Northern Rock have recently announced a new venture with Lloyds TSB in that some existing Northern Rock mortgage customers will be offered the option to apply for a Lloyds TSB mortgage ‘from a selection of their deals’. As professional mortgage advisors we feel that we should point out the pros and cons of these options.
Firstly the deals will not be offered to all Northern Rock customers and the deals that will be offered are not from their full range. They will also be on an information only basis. This means they are offering a limited choice and you have limited protection as no advice is given.
As Independent Advisors we will of course be able to offer you a wider choice of products and lenders when your existing deal expires. We would suggest that if you are lucky enough to receive this option from Northern Rock that you contact ourselves to discuss the suitability and competitiveness of any products offered.
This is the questions on everyones lips at the moment. With the Government trying to help lenders subsidise deals and stave of a recession, is enough being done by all concerned?
Read our new publication ‘the mortgage’ to find out more about the credit crunch.
Lenders have been reshuffling their mortgage deals on an almost daily basis in recent weeks.
There was a 20% fall in the number of mortgage offers available in just one week.
Big-name providers have been withdrawing offers or putting up the price of a mortgage, claiming they have been swamped with requests on competitive deals.
The credit crunch means that banks and building societies are less keen to lend to each other and do not want to overstretch themselves by taking on new custom
So what does this mean to the average household?
In simple terms as a first time buyer you will need a a larger deposit as 100% deals are pretty much non-existent. For those people with an existing mortgage it means less choice of new deals. That doesnt mean to say there arent good deals available. This means it is now more important than ever to get good truely independent advice when arranging a new mortgage.
Many lenders have recently changed their lending criteria. They are now offering lower loan to value products and some rates are less attractive. This is all as a result of lending in America where bad debts have fallen into arrears. This means that investors who would have bought ‘mortgage books’ from lenders are now asking for lower risk mortgages. It is now more inportant than ever to take professional advice as the number of mortgage products available has roughly halved over the last six months. There are many individuals who are coming off of low incentive deals this year and they should really be speaking to an advisor about a new deal three months before their current scheme expires.
The FSA has launched an awareness campaign after a survey found that one fifth of borrowers are worried about meeting their mortgage payments. A quarter of these people do not have any provision or insurance in place to help with their mortgage payments in the event of accident, sickness and redundancy.
This is a staggering statistic when you consider that people will happily £300 a year to insure a £5,000 car, yet wont pay £300 a year to insure against losing a house worth £100,000 plus !!!!
Recently many lenders have withdrawn from the 100% lending market. These lenders include Northern Rock (no surprise), Alliance and Leicester, BM Solutions, Coventry and Mortgage Express amongst others. Is this due to fears of property price slumps or due to the adverse lending market becoming more restricted? 100% lending is a huge market, especially for first time buyers who will now need 5 to 10% deposit for most lenders.
No issues about paying out in the event of a claim, but are they competitive? It used to be normal that lenders insisted you took their insurance; this is no longer the case. Although most do charge an administration fee (typically £25-£40) if you do not take their insurance. However, you can usually save more than this amount by arranging it through your mortgage broker, provided they are “whole of market” of course.
For first time buyers it’s definitely a struggle in this area. Low income, high property prices etc. How did you manage to buy your first house? Is the Government doing enough to help first time buyers? The stamp duty threshold at £125,000 still means that most first time buyers have to pay it. Some designated “affordable housing” still seems to be difficult to obtain for the average first time buyer.
A very topical one at the moment, some are predicting as high as 7% or more! Rates were at 6% for the majority of the year in 2000. Could it be we have short memories? At that time we considered rates to be low in comparison to nearly 15% in October 1989. But we have benefited from low rates for the last few years. Does the concern about interest rates make you think twice about moving to a new property?
