Read the small print and don't get searched

Some comparison websites are causing a stir.  We’ve had a few customers contact us for a mortgage recently who have been totally unaware that they have had a number of credit searches carried out having recently searched for competitive renewal quotes on their home or car insurance.   I’m sure it will be stated somewhere in the small print, but the customers have researched a number of comparison sites and ended up with a number of credit searches on their profile.  This, in a small amount of time can have a marked affect on your credit score, and as such, affect your ability to obtain finance, so read the small print and be aware!  

The Council of Mortgage Lenders (CML) has reported that July’s figures for mortgage lending were up 12% compared to June.  This amounted to £16.7bn and compared to July last year, was an impressive 29% increase.  Positive figures indeed and it will be interesting to see August’s figures as this was also an incredibly busy month.  Interestingly, the First Time Buyer sector has proved one of the larger increases in volume, circa 5%, with an average deposit of 18% and an average loan amounting to 3.31 x income.

We’ve also seen a large increase in requests for secured loans.  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 although costs are added to the advance.

We tend to find that many customers looking to remortgage 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 3-7 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.