30 September 2011

Low rates and new lenders!

As we enter the final months of the year, we are starting to see more positives from some lenders as they relax their previously strict underwriting criteria. New lenders are also knocking on our doors to see if we can distribute their products. Hoorah! An appetite to lend! I suspect others will make a last ditch attempt to end the year on a high by offering lower rates to attract decent volumes of business in order to hit targets. Rumours are that we shall see some low and attractive tracker rates, but only available for a limited amount of time (i.e. one week, etc). Watch this space! But be wary that if you are after a fixed rate, these are currently more volatile and rates are moving rapidly, some up and some down, depending on the term of the deal.

That said, long term rates have been considerably higher than where they are now. If you are on a long term fixed rate, in excess of 5%, then it may just be worth having a review to see if re-mortgaging now could save you money. With many lenders offering low rates and some offering fee free re-mortgage deals, there’s no harm in reviewing your current mortgage product to see if money can be saved. Even if you are to incur redemption penalties to change lenders, a new mortgage could still work out financially beneficial although this is an important calculation in the overall process. Speak to your local independent mortgage advisers to find out more. It could be a very worthwhile conversation in the run up to Christmas and looking to the future!

Finally, the Buy to Let market has had a busy week. The Post Office withdrew its entire range of Buy to Let products. The lender says it plans to concentrate on helping First Time Buyers and Residential mortgages. And Kensington, the only lender in the Buy to Let market to offer an 85% mortgage, has withdrawn their product. After a bumper few weeks, the lender has allocated their tranche of funding on this great product offering. They will continue to offer mortgages up to 80% of the property value.

23 September 2011

Don't allow un-necessary credit searches

A mortgage is the biggest debt you’re likely to ever take on, so you need to do your homework and understand more than just what certain marketing / PR headlines suggest about how the “100% mortgage is back” or how Bank Base rate will not rise for many years, or how much profit the banks are reportedly making!

Advice is crucial and should, ideally, be sought from a company offering ‘whole of market’ mortgages. Remember that some Estate Agency chains and Banks, in particular, can normally only offer advice on their own products or from a limited number of lenders.

Be wary that the more of these you talk with, the more likely you are to be credit searched. Make sure you stipulate at the outset that you do not authorise any credit searches, until you are happy to proceed with a specific product or lender.
Also, if not presently, but you have plans to apply for a mortgage in the not too distant future, keep your eye on your credit. Don’t miss or make late payments to any provider. All financial institutions will base their decision initially on your credit history. If you have missed or late payments, or even a lot of recent searches (from multiple finance/mobile/car/home insurance applications), this could be detrimental to your ability to obtain finance, at a competitive rate. If you have not reviewed your credit search before, get it for free (30day trial period) from Credit Expert (see www.atomltd.co.uk for a link). It’s well worth a review and a good insight on how attractive you may, or may not, look to a lender.

Finally, as lenders endeavour to control volumes and distribution, many limit which companies can access their products. Therefore, it is with delight that Platform (The intermediary lender of the Co-Operative Bank PLC) has retained AToM as a specialist mortgage distributor for a number of their products. The lender has a good appetite to lend in a specific arena in the mortgage market and we are privileged to be one of only 3 selected companies in the UK to promote their services and exclusive products.

17 September 2011

Discount to leave your current lender?

The FSA (Financial Services Authority) has published its latest Mortgage Lending Data for the UK covering the second quarter of 2011. The key areas of interest are -
- The proportion of lending for house purchase, which includes buy-to-lets, increased from 54% in Q1 to 59% in Q2,
- Lending to first-time buyers rose from 14% in Q1 to 16% in Q2.
- New lending at fixed rates increased in Q2 to 56%.
- The average rate on new advances rose from 3.65% in Q1 to 3.81% in Q2, which the FSA puts down to the increase in fixed rate lending and a rise in the average fixed rate from 4.24% in Q1 to 4.43% in Q2

Despite the latter, fixed rates are really very competitive in the current climate and well worth a review.

Other figures released this week show that mortgage lending may top £40b which would be £3b more than the last quarterly predicted figures. This is very positive.
However, be aware that we have just seen an increase in the three monthly LIBOR rate (London Interbank Offered Rate) which has increased to 0.90%. This is the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London (effectively a measure of confidence between banks). Reports suggest that the European debt crisis is pushing up LIBOR rates as banks start to eye each other with suspicion again. Watch this space!

Finally, I’ve mentioned this before, but its back on the mortgage lending radar. A few dormant lenders are offering customers a discount (some up to 30%) off their mortgage as an encouragement for them to move away. If your current lender is one of these (and is not actively lending) then it’s worth a call to see if you qualify for a discount. Normally, they will give you a deadline in which to complete the transfer of your mortgage but I’m sure it’s a timescale that AToM could meet assuming you meet all of the new lenders criteria requirements!

09 September 2011

Another Summer gone....now time for a Financial review!

The summer holidays are over, the kids are back to school, and you may (or may not) be looking forward to peace and quiet and having some time on your hands. However, as the final few months of the year race towards us, maybe it’s time to start thinking about 2012 and what trials and tribulations this may bring.

Without doubt, the only certainty in the current financial markets is uncertainty. When will bank base rate rise? Who really understands what is happening with house prices? Will 2012 mortgage lending be more or less restrictive than what we have seen throughout 2011, especially as the banks scrape and save(!)to pay back the circa £300bn to the Bank of England in early 2012, advanced to them via the Special Liquidity Scheme? Will the world really end on 21/12/2012? Ok, the latter is a Mayan ancient prophecy and has nothing to do with mortgages....!

All of the others point towards ensuring you review your current financial arrangements and determine that you are on the best deal to see you through the medium to long term. Whether you require the security of fixing your payments for an amount of time, or whether you are a bit of a risk taker and might look at a short to a medium term tracker, or a discounted option, right now, all are available at attractive rates in the mortgage market.

Other things to consider - Do you have a Will? Statistics show that only one in three people has a will in place, with the remainder leaving the state to take over and determine how their assets and belongings are distributed, if they die.
Do you have Life Assurance, Mortgage Payment Protection, Accident Sickness and Unemployment cover, Critical Illness Cover, and more? Any of these products might be beneficial to your personal circumstances or needs.

A quick review with an independent mortgage advisor with permissions for access to whole of market mortgage rates and other associated financial products, could be time very well spent.

02 September 2011

Remortgages are creating a stir...

Despite coming towards the end of the holiday season, there is certainly a lot of mortgage activity happening! AToM have seen a huge increase in enquiries for re-mortgages as customers look to refinance existing deals on to better rates or raise capital to purchase other properties or for home improvements. There’s no better time to review the market as there are some competitive rates currently available.

With rates so low we have also seen a vast increase in customers looking to consolidate debt and add these to their current mortgage. This can sometimes cause issues. If you consolidate unsecured finance in to your mortgage, although your monthly payments may be lower, you may be paying more for your debt over a longer term.

Those whose finances have got out of control tend to look at debt management plans, or Individual Voluntary Arrangements (IVA). Again, the lower monthly payments may help in the short term, but you may well find it hard to gain an approval from a lender to refinance at a later date. Lenders tend to shy away from debt management plans and may not touch anyone who has been in an IVA unless it has been discharged for more than four years. Advice should always be sort before entering in to these types of arrangements.

At AToM, we are independent and we will happily go through the pros and cons of changing any of your financial details before proceeding to conduct any credit searches or decision in principles. You need to be clear that it’s the right deal for you. If your current deal is still the best option for you, we will suggest you stay where you are.

Whatever you do remember to check what terms and conditions apply and also remember that your home may be repossessed if you do not keep up repayments on your mortgage.