25 November 2011

Inside the mortgage trade exhibition!

Over 70 exhibitors, including AToM, were in attendance at last week’s Mortgage trade event of the year - Mortgage Business EXPO 2011. More than 2,500 Mortgage Brokers, Independent Financial Advisers and Estate Agents visited over the two days to explore the products and offerings of the many Banks, Building Societies, Solicitors, Bridging and Commercial Funders and Specialist Mortgage Packagers. In addition, our trade association (Association of Mortgage Intermediaries) held numerous seminars covering various issues including ‘Mortgage Market updates: the impact of the impending European Mortgage directive’: ‘Consumer Protection’: ‘Current Issues’ and ‘Economic impact of the Economy’. How exciting it all sounds!

However, the reality is that we currently appear to be in a buoyant mortgage market and all of the Lenders at EXPO wanted to lend! This included some of the usual household names (not all could make it!), but more so the smaller lenders with no obvious funding issues, including Building Societies! Especially prominent were those in the Commercial and Short Term Lending (Bridging Finance) arenas.

All in all, we had a good two days exhibiting, made some fantastic new contacts and achieved a real insight as to how the market is currently holding up in various areas of the country. Believe me, the south is doing pretty well…

What I found valuable was the firm response to a question posed during a Lenders seminar with a panel consisting of Nationwide, Barclays, Northern Rock (Virgin Money), Platform (Co-Op) and GE Money Home Lending. The question raised to them all was, simply put, when do you hink the Bank of England will increase the base rate? The responses were pretty similar from all
parties – between late 2013 and early 2014.

Take what you want from this, but all of a sudden, short to medium term tracker rates look more attractive than they did just a few minutes ago!

18 November 2011

Is your adviser qualified?

In October 2004, mortgages fell under the spell of the regulator, The Financial Services Authority. This was not a bad thing as it was becoming very clear at that time that certain areas of the mortgage market were not being patrolled properly and that some of the borrowing public may not, in turn, have been looked after satisfactorily.

Even at that time, many mortgage intermediaries were already professionally qualified, although, not necessarily in the mortgage sector, most being authorised in wider ranging financial services arena. Since 2004, mortgage intermediaries seeking to provide advice and recommendation to their clients have had to be specifically professionally qualified, by examination, and the subsequent denotations that are shown vary in format but mainly incorporate CeMAP (Certificate in Mortgage Advice and Practice).

Therefore, for any mortgage which falls under the regulatory banner you should ensure that the advisor who deals with your mortgage is qualified under this title at the very least and that they are not simply information gatherers for others who will remotely research and advise at arms length. At the moment, Buy to Let mortgages are not regulated although the authorities are looking very closely at this and we fully expect them to fall under the regulatory banner before too long.

So why the need for professional qualification? Simply put, it is in your best interests to be advised by someone who adheres to and works with a high level of principles and who regularly undertakes continuous training to ensure he or she is always abreast of the best market products and practices designed to suit your personal circumstances.

Finally, on this subject, the regulator is now proposing that all advisers take further examinations to ensure that their skill and professionalism is continually upgraded in line with market needs. AToM supports this as we believe in full and dedicated commitment to the profession and we are keen to see the restoration of advice as a welcome requirement of our customers rather than the
less regarded necessity which appears to have become the case in recent years.

11 November 2011

Small positives and Mortgage Expo!

Each month I shudder as various statistics arrive on my desk - £130m daily increase
in Government national debt (PSND); 1,600 people made redundant daily; 99 daily
property repossessions and the suggestion that every UK adult owes £29k (122%
of average earnings). This, in addition to the global issues currently taking up the daily headlines and adding immense pressures to the various financial markets, does not paint a pretty picture of
what might lie ahead.

However, we can take some small positives as current lending markets see a little Retail
Mortgage-Backed Securities (RMBS) action occur. What does this mean? In short, it's a volume of mortgages, bundled together and sold off to investors as a package. On this basis, it dilutes the
downside of any one borrower defaulting. For the industry, it means that the Lender,
once this book is sold, should be able to lend a further amount in new lending. Competition with product pricing is also more active than of recent months and appetite for volume lending is apparent with a few exciting exclusive product launches.

One thing to think about when taking out a new mortgage is the reversion rate of that product (the rate at which the mortgage reverts to, once the incentive fixed, discounted, tracker rate period expires). Some lenders tend to revert to a tracker rate at an amount above Bank Base Rate (BBR). Others revert to their own Standard Variable Rate (SVR), and even in the current climate, they can be high (5.99% +). Always do your homework and make sure you understand all the elements of your mortgage before signing on the dotted line. Ensure that you have no cause for regret later.

Finally, next week sees the great and the mighty of the mortgage industry meeting together at Olympia 2, London for Mortgage Business Expo 2011. This exciting two day event consists of lenders and ancillary businesses showing their wares and seeking to establish increased business relationships and volumes. Many presentations occur over the two days, but the most anticipated
will be the ‘update on the mortgage market by The Financial Services Authority’. I suspect that this one will be standing room only and I’ll update you on their thoughts and views in the coming weeks.

04 November 2011

It's still tough out there..

Getting a mortgage application through a lender in the current climates can still be challenging. One day it appears relatively easy, yet the next, it’s a nightmare! So whatever you do, try to not give lenders any excuses to decline your application or refuse to lend to you. Try to pay bills on time, don’t miss payments where possible and especially not mortgage payments! Any missed (or sometimes late) payments will be registered on your credit file and this is normally used as the basis of a decision to lend to you. Remember that most Insurance companies and mobile phone providers carry out credit searches on people before issuing their products. Try not to incur too many searches in a short space of time. This can also be detrimental to your credit score.

When choosing who to speak to about your mortgage, ensure that the company you are talking to, whether it be a mortgage broker, or an Estate Agents in-house mortgage adviser, has access to the ‘whole of market’ and not just a fixed panel of lenders. If they do not have access to the whole of market, they may not be offering you the best deal available to meet your requirements.
Finally, for some months, a few of the smaller specialist lenders have been offering existing borrowers ‘golden goodbyes’ to assist them in remortgaging away to another Lender. This tends to be a cost effective way for the lender to lower their exposure and re-capitalise over exposed mortgage books, or so we are led to believe! In some instances, the incentive to the borrower to move away has been thousands of pounds. We are aware of some discounting by tens of thousands or up to 25% of the current loan amount! Quite simply, some lenders are happy to pay
substantial amounts to say goodbye! Other lenders have waived early redemption charges on some loans to encourage borrowers to move their mortgage elsewhere. This fad seems to be on the increase again. If your mortgage is a with a small specialist lender, who you know are no longer actively trading, a call to them could be very worthwhile and could decrease your mortgage amount, term and payments!