AToM’s chairman Vic Jannels picks up ‘Service to the Industry’ award!

I start this week with some fantastic news in the AToM’s chairman Vic Jannels was awarded his second accolade of the year as he picked up ‘Service to the Industry’ at last week’s Specialist Finance Introducer Awards 2018.   The event, held at Madison in St Pauls, London, was attended by over two hundred of the industry’s finest and hosted by Homes Under the Hammer and I’m a Celebrity’s Martin Roberts.  AToM’s system, OMS (One Mortgage System), also picked up ‘Best use of Technology’ and ‘Product Innovation’.  Awesome news and well done team!

The market is pretty quiet currently, apart from the odd ‘cabinet reshuffle’ here and there and at the time of writing, we’re about to get our 17^th housing minister in 20 years!  Mind blowing.

What we are seeing, despite heavy rumours of a bank of England base rate increase possibly as soon as August, is lenders reducing their current rates.  The holiday period is inevitably quieter, although add this to an already quiet market, and lenders need to attract customers to keep on track to hit their annual targets.

Just in the last week, we’ve seen Halifax, NatWest, Platform and TSB all reduce selected rates and our friends at Secure Trust launch a 90% LTV product that caters for those who have had a credit blip in the past.  There are some great rates and options around currently.

Finally, valuations on properties to be mortgaged come in various guises. Every mortgage lender will require a valuation on the property although, in some cases, they will not actually visit. This is because they can often access detailed information electronically.  Remember that this fairly basic valuation is for the lender, at your cost, and should not be relied upon as a guarantee that the property is sound and fit for purpose.  Seek a more detailed survey if you have any doubts.  Recently, and with a lack of stock readily available, we are seeing valuers ‘down value’ a property.  Just because it’s been sold at £330k, does it mean it’s worth that price or has it been sold to the highest bidder.  Always do your home work before the valuer goes out, as if he says its only worth £300k, then you’ll have to find the difference from your own pocket as the lender will only lend against the lower of the purchase price or valuation. 

Stick with your current lender?

So, your mortgage product is coming to the end of it's term.  You may have fixed for an amount of time, maybe two, three or five years.  And now your rate is due to change to the lenders variable rate, which in the main, is higher than the rate you are currently on, and your monthly payments are about to increase.  But hold on, your current lender has seen the light and decided to offer you some 'fantastic' products to keep you.  Even though you are four months out of your product change, they've given you just fourteen days to decide whether to choose a new product to stay with them.  What do you do?

One recent example a customer showed us, had some very attractive rates.  However, when we looked, the same lender was offering better rates through the intermediary sector, with the same fees, etc.  I always say do your homework, and lucky this customer did as it saved them 0.1% on the rate over a three year period.

Even though some lenders put a deadline on any new offerings, remember most are contacting you three or four months before your product changes, so there is plenty of time to review your options and choose the best one for you. 

This is the biggest debt you will ever take on, take your time and ensure you will not regret it further down the line.  Always seek advice! 

With this in mind, we've seen a lot of rate changes and reductions over the last few days.  TSB, Santander, Halifax, Harpenden Building Society, Accord, Platform, Saffron, Kensington, Virgin Money and Precise Mortgages have all made changes, to name but a few.  Key highlights include 5 year fixed rates from 1.75% up to 65% LTV, Buy to Let fixed rates from 2.99%, ExPats in Australia can now be First Time Buyers in the UK, more options for lending in to retirement and many many more positive enhancements.    Lenders want to lend!

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!

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.

Fantastic February!

The Bank of England’s January lending figures report that the number of remortgages rose to 33,498. This is nearly 10% above the six month average. These statistics suggest an increasing wariness of future mortgage rates and in addition, the fact that fixed rate mortgage interest rates were relatively low in January.
Mortgages for property purchases also increased, to 45,723, slightly below the six month average of 46,686. Total lending to individuals increased by £1.5bn.

I suspect these figures to be vastly different for February as some lenders increased fixed rates due to the fluctuation in the money markets and many customers will have raced to secure low rates before they were withdrawn.

Nationwide has reported that house prices increased by 0.3% in February with the average UK house price now standing at £161k. This is 0.1% lower than this time last year. The lack of first time buyers and easily accessible mortgages are still major factors with regards to prices and activity in the housing market.

AToM had a fantastic February for new business received. Applications were up 68% compared to February 2010 and resulted in our best month since June 2009 for new business. This was mainly due to our top four lenders – GE Money, who offer mortgages to the employed with some allowance for previous credit problems. Bank of China, who had a market leading lifetime tracker rate residential mortgage (they also cater for Buy to Lets). Platform (part of the Co-operative Bank Plc) who are actively lending in the Buy to Let market, with small arrangement fees. And AToM’s “Complex Prime”, a number of funders who look to assist those who have been declined by the high street lenders credit scoring systems for no apparent reason. This could include not being on the voters role, having to little (or too much) credit, securing a charge on more than one property, lending into retirement and many other reasons. Whatever your mortgage requirements, speak to an independent mortgage adviser!

New mortgage business up 83%

The Bank of England has reported that mortgage lending in December dropped to the lowest level in two years and Nationwide has reported house prices dropped by 0.1% in January, the first fall recorded by the lender since Aug 2009. Neither of these articles is worth further comment though as there are many positives to concentrate on!

The Buy to Let market was given another boost this week with Platform (the intermediary lending arm of the Co-operative Bank) revamping rates and launching new products. If you’re looking to purchase a property for investment purposes, this lender is well worth a look. Tracker rates start from 3.89% (APR 5%) and only have a £995 arrangement fee (some lenders charge up to 3.5% of the loan amount). These products also have free legal costs for those looking at re-mortgaging existing Buy to Let properties. AToM is one of a small number of distribution partners in the UK chosen by this lender to offer these products.

On the Residential side, one of our local Business Development Managers, from a major high street lender informed us that their remortgage business had increased 7% over the last week and now accounted for 46% of their business. At the same time, those who applied for mortgages requesting a fixed rate product were up 9% on previous weeks.

And finally, January’s new mortgage business received at AToM amassed to an 83% increase, compared to the same period in 2010. Many customers are fixing their rates in anticipation of a possible bank base rate rise, but some are also taking advantage of the attractive bank base rate trackers currently available. Others have more complex scenarios that they needed assistance with, which the high street lenders would not normally entertain. Despite what you read in the national press, we are seeing an appetite from lenders to lend, an increasing willingness to be helpful and, most importantly, approval of applications. Long may that continue!