Something to ponder..

I start this week’s column with a brief look back at 2009!
January saw UK plc officially reach recession with house prices in steep decline. BBR dropped in February and has remained at 0.5% ever since. In March, many banks announced dramatic losses. Stamp Duty relief was extended in April for properties under £175k until the end of 09. May confirmed hundreds of mortgage brokers had left the market! In June AToM opened new premises in the Carfax (Hooray)! July’s mortgage business hinted small signs of recovery. August saw a renewed call for Estate Agent regulation and in September Lloyds completed the first mortgage asset backed securitisation in Europe for over a year! In October the FSA circulated their Mortgage Market Review proposals including the removal of self certification mortgages. November saw news of a number of lenders ready to join or re-enter the UK mortgage market and December bought the pre budget report - Oh joy! Overall, not a great business year for mortgages! It can’t get any worse, can it?

So, something to ponder - BBR will increase at some point soon. Some pundits suggest late 2010. We think it will be sooner. Tracker rates remain attractive but if you are waiting on a tracker and planning to move to a fixed rate when BBR moves, then beware….we can almost guarantee that the cost of fixed rates will quickly rise too. So, if you are sitting on a good tracker, is it worth taking a gamble on where fixed rates will be when the uplift in BBR comes? If you are keen on stability, have you thought about the possible advantage of taking a small hit at the front end knowing you are well placed with rate protection when BBR rises? A conundrum to consider during the festivities?

Thank you for reading my column throughout 2009. Please let me know any burning issues you would like me to cover in 2010. You can email me at dale.jannels@atomltd.co.uk or give me a call on the above number.

The directors and staff at AToM wish you, family and friends a very Happy Christmas and relaxing New Year. We look forward to being of assistance to you during 2010. Let’s hope it will be a good year for everyone…

AToM launch 'Complex Prime'

Despite the decade drawing to a close, there is still time to look at a new mortgage! Many lenders offer ‘product transfers’ or ‘retention products’ to existing customers. These are not generally advertised to the general public or offered unless you ask for them. If your current incentive rate has come to an end and you have been transferred to the lenders standard variable rate, you will often have the option to choose a new product from an internal range available to existing clients. Some lenders have a good range of retention products. Others, particularly in the current climate, may not and expect that you will simply pay the new rate or move lenders. When moving lender, you release the original funds back to the current lender to advance to someone else, probably on a higher rate of interest and with an attractive new arrangement fee. Basically, some will make more money if you switch lenders, than if you remain on their books! Most retention products can be arranged within a matter of days. Speak to an independent mortgage brokerage to see what’s available and see whether this is the right option for you.

I rarely promote AToM product offerings in my column. However, this week is an exception! With most lenders, a mortgage is initially agreed using a tick box computer system. If you tick all the boxes, you normally get offered a mortgage. However, if you are not on the voters roll: have too much credit: have too little credit: require something a little more complex…. you may find it difficult to get past the first hurdle. Don’t give up! AToM have launched ‘complex prime’ to cater for such examples. We have an arrangement with three lenders who will ‘manually’ underwrite your application and, if the deal fits, they will look ‘outside the box’ and lend. This is a superb alternative to the current “computer says no” mentality and is a positive step forward by the lenders we are working with. It is refreshing and harks back to the days of real underwriting! Call AToM now to find out more.

Trackers remain the product of choice.

4/12/09 - We are suddenly well into the Christmas season and as such, I should really look to be upbeat and not announce anything other than glad tidings. So, I won’t be able to let you know that the Citizens Advice Bureaux have reported an increase in debt problem queries and are now handling an estimated 9,300 new enquiries every day. I certainly won’t mention that 1,000 people are seeking some sort of formal debt rescheduling every working day. And, lastly, I will definitely refuse to write about the 386 people who will be declared insolvent or bankrupt today or that it is equivalent to one person every 3.72 minutes. Stark facts indeed as released by ‘creditaction’. What these disturbing numbers signify is that, even though it is the season to be jolly, reality determines that this Christmas may prove to be a financial burden too far for many and the price people will be prepared to spend on it may well receive much more thought than in previous times. It could go two ways - firstly, people will put their cares to one side, forget the 2009 trials and tribulations and the credit cards will be flexed with any spends being forgotten until later. Or secondly, the purse strings will be drawn and funds will be tightly managed. Whichever applies to you, just make sure you’re happy and don’t regret it later!
Other news - House prices have increased for the seventh month in a row according to the Nationwide. Rising by 0.5%, the average house price is now at a similar level to that of 2006 and 2.7% higher than in November 2008. Mortgage product availability is also increasing. As lenders fight for market share, great new products and innovations are being sought. One lender has launched a very attractive 10% deposit product that tracks the Bank of England base rate plus 4.29% (so 4.79% - APR 4.4%). Trackers still remain the product of choice as experts predict that base rate will remain static for some time. So, if you are in the market for a 90% mortgage, and your income can stand scrutiny, this is a product well worth further investigation.