AToM awarded 'Best Overall Mortgage Packager 2011'

I am delighted to commence this week’s column with the fantastic news that AToM has received a national mortgage lender award! We have been awarded ‘Best Overall Mortgage Packager 2011’ by the lender GE Money Home Lending. It’s rare for lenders to issue awards, so this is really special and great recognition. We have a super team at AToM and this award is real credit to the hard work the staff have put in during the recent tough market conditions.

As a Mortgage Packager, not only do we work with the general public, but nationally too with many Accountants, Mortgage Brokers, Independent Financial Advisers and Estate Agents. With over 10,000 registered introducers on our databases, lenders use AToM to offer their mortgage products seeking quick distribution and marketing to all of the above. This often means that we see exclusive deals, new lenders and product innovations, ahead of the general
marketplace. As a Mortgage Packager, we also collate information for the lenders, obtain employer or accountant references, instruct valuations, obtain mortgage offers and in some cases go right through to requesting funds and instructing completions.

Some of these lenders (such as GE Money) will work through limited distributions, enabling them to control their business volumes. In other words, it’s up to AToM to identify the cases that may, or may not, fit the lenders criteria quickly and direct them accordingly. As a result, lenders may not need to employ as many staff to man the phones or underwrite cases. Thus containing their costs. Others will approach AToM to pilot schemes and iron out any potential system issues before opening the products to the general mass mortgage market. Or to just use our experience and market knowledge to highlight product gaps in the market which the lender can then explore further, if the funding is available!

So in short, we are a little bit like Doctor Who’s Tardis. The AToM shop front opens onto a business which has much, much more going on behind the scenes!

Review your options!

Many of us will review car insurance, home insurance, gas and electricity suppliers to
find the best rate on the market. But it’s astounding how many people just leave their mortgage with their existing supplier. Most lenders look to attract new customers, but are less likely to offer attractive options to stay with them. This, in the main, is due to the different fees and charges that can be added to the new mortgage at the outset. In the current climate, the
lenders bottom line tends to be more profitable with new clients, rather than old. So don’t feel loyal, if a better option is with another lender; think of number one!

That said, we are still stuck with the fact that many lenders do not want to lend in huge volumes. Therefore, you may find that actually getting a mortgage becomes the main obstacle and you may find that you have to stay with your current lender anyway!

The other option, if you’re looking to raise cash for home improvements, to consolidate debt (although not always encouraged) or for another legal purpose, is a secured loan. A secured loan is a 2nd, or subsequent charge, designed for homeowners and which allows the equity in their property to be used as security. Loans are usually between £3.5k and £100k. There are also no 'up-front' fees to find.

We tend to find that many customers looking to re-mortgage to raise additional funds are already on an attractive rate with their lender. To move away could be costly and they could end up on a much higher interest rate. Depending on the amount already lent as a mortgage, compared to the value of the property, most lenders will allow a secured loan to be added as additional borrowing.
The secured loan is usually repaid over a shorter term than a mortgage, circa 3-10 years, but the term can be longer, although this will increase the amount of interest repaid. Rates vary depending on the customer’s circumstances and current level of borrowings.

As with all finance, seek advice and think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other loan secured on it!

2012 - a year for Specialists

A very Happy New Year to you all! Let’s hope 2012 brings us all something to be upbeat about! Although lending volumes are predicted to remain much the same as in 2011, I do predict that the mix will change slightly. We will see more specialist lenders offering products aimed at specific types of customers. This is a good thing as this will help those who may not currently be able to get a mortgage such as those with multiple incomes from various sources, those who have had financial issues, those looking to buy their Local Authority houses, and so on. Lenders may also consider more complex scenarios working on an individual basis and pricing.

The cost of borrowing funds between lenders has risen over the last few months and as such, the cost of fixed rate monies has risen. Remember, these rates are calculated on a different basis to tracker rates. In the main, the former is based on SWAP rates, the latter on Bank of England base rate. With the Euro Zone issues still hanging over all of us, the cost of borrowing funds between lenders was always likely to rise. However, some experts predict that the cost of fixed rates monies is unlikely to decrease again once risen. Back to wishing I had a crystal
ball!

Lenders have already started adjusting their product offerings. Coventry Building Society is the first to pull all of their products! At the time of writing, I have not seen the new products to be launched, so cannot comment specifically. However, lenders product withdrawals pre Christmas all resulted in higher rates. Will they follow suit, or maybe set the trend for attracting business in the ‘January Sales’?

The Nationwide House Price Index suggests that house prices declined by 0.2% in December, but
increased by 1% in 2011 as a whole. The price of a typical home is now £163,822. London saw the strongest growth in 2011 (5.5%), but less regional variation in house prices compared with previous years. The South East saw an annual growth of circa 2%.

Finally, AToM had a very good final quarter to 2011 and were pleasantly surprised at how busy we were between Christmas and New Year. Hopefully, this is a sign of good times ahead and a positive 2012 for us all.