27 February 2009

The day of the First Time Buyer...

The great ‘new news’ of the week is that Northern Rock have confirmed their intent to lend over the next 2 years and are to increase their product offerings to 90% of the property value. This shows ambition from the lender in dire times, especially for first time buyers. A spokesperson, commenting in trade press added ‘We might do some business at 90%, but we will test this market very carefully.’!
With house prices and interest rates so low, today’s market is veering towards first time buyers. Those with a decent deposit have many many options!
For those with less, or even no deposit, the government has recently launched some ‘initiatives’. But do you even know what’s on offer? It can be confusing……………
- New Build Homebuy – Buy 25% of a newly built property with savings/mortgage (some properties in certain areas) and pay rent on the rest.
- Homebuy Direct – Receive an ‘equity loan’ of 15–30% on the cost of newly built properties (some properties in certain areas). You’ll need to repay the loan when you sell the property. The remainder is obtained via a traditional mortgage.
- Open Market Homebuy – Receive an ‘equity loan’ of up to 50% to buy any property. Remainder covered by a traditional mortgage. Interest charges on the loan apply.
- Rent to Homebuy - There are certain newly built properties that you can rent at an affordable rate – 80% (or less) of the market rent, for up to five years. If you can afford it, at the end of 5 years, you can buy part of the property under the New Build HomeBuy scheme.
You need to be ‘deemed’ eligible and may still need some funds to cover costs such as Stamp Duty, legal fees, etc.
For more information, or advice on all mortgages (including First Time Buyers), speak to AToM or visit our new website at www.atomltd.co.uk

12 February 2009

It looks good news, but is it?

The snow invaded and the UK ground to a halt! Although good fun and great to see, the underlying effect amounted to some £3.5bn in lost revenues to businesses, experts have predicted. Add this to an increase in insurance claims (myself being a snow accident statistic!) and you quickly realise it’s been an expensive week. But at least some are spending; the sale of 4x4 vehicles locally seems to have increased!!
More positive movements over the last week with a noticeable expansion in 'sold' signs around the local area and a further Bank of England Base Rate(BBR) reduction to an all time low of 1%. The latter greeted with both applause and despair! Great news for those on tracker mortgages, but bad for the economy. With lenders Standard Variable Rates decreasing, those coming to the end of their fixed rate periods need not move mortgages or lenders. However, we need this to happen so money moves between lenders to get the economy flowing again. Plus, the banks aren’t always passing on the full base rate cut; one rather large (government owned) institution only reduced their rates recently by 0.19% and not the full 0.50%!
Don't ‘panic buy and move’ your mortgage. You may be on a fixed rate and eyeing up some superb tracker rates on offer, but will it put you in a better position? Your current fixed rate may have a redemption penalty, so will cost you to change. It is also likely that a new tracker rate will have a large arrangement fee and tie you in for a few years. It’s unlikely that BBR will remain low for long as there’s the small matter of £228bn lent to the banks, that needs paying back. Guess who’s going to be hit for that!? Thus, check before you do anything abruptly. For free mortgage advice, speak to AToM…

07 February 2009

Lloyds Banking Group use power....

The Lloyds Banking Group (HBOS and Lloyds TSB) began to wield their new found power on the mortgage market this week and withdrew all adverse and self certification mortgage products from two of their subsidiaries, BM Solutions and Bank of Scotland.
This will have a major impact on the mortgage market, not only because they had great products and were specialists in these areas, but their removal leaves the remaining providers who still offer such products, out on a limb and right now lenders are not keen to be 'last man standing' in any product areas. Thus, the next few weeks are likely to witness more changes as the need for these products increase, from both those in genuine financial difficulties and others who simply cannot easily prove all their income. This, despite the governments instruction to banks to lend more will, no doubt, see the contraction of both sectors of these markets in coming weeks. If either self certification or adverse credit products suit your personal requirements, come in and see us, sooner rather than later!
Good news this week came from a surprising source, the Woolwich who launched a market leading 2.29% one year fixed rate for borrowers with a 40% deposit. Their rate then follows the bank of England base rate + 2.29% for a further two years and has a 2% arrangement fee which can be added to the loan and no extended redemption penalties.
Our wish is that others follow suit and that we will see some really competitive rates on offer soon. This will help get the market moving again…