Lending down, purchases up and are you suitably protected?

UK Finance has confirmed that mortgage lending was down 4% year on year in June, amounting to £21.9bn.  Despite this, house purchases increased nearly 3% as 48,539 approvals occurred, compared to the previous year.  This is encouraging, and we’re seeing 49% of all business coming into impact specialist finance being house purchases.  There’s certainly a lot of properties being developed currently, so this should not be surprising! 

We often associate protection needs with homeowners, but it was interesting to see recent data suggest that the majority of renters are putting themselves and their possessions at risk because they do not have vital forms of insurance in place. Research from Aviva uncovered evidence that just one in five rental households had life insurance, compared to three out of five homeowners with a mortgage. The figures are particularly concerning because the number of renters in the UK is rising, a trend driven by high house prices and other challenges which make it difficult for would-be first-time buyers to get on the housing ladder.

A further study from Sainsbury’s Bank appeared to back up this trend, finding that while 41% of homeowners had life insurance or critical illness cover, just 26% of those renting had such a policy in place.

People are very quick to insure their pet, Sky TV, their travel plans and their house contents, but forget their biggest asset and this frequently gets left to last, or until it’s too late.

Finally, from where we see it, on the front line, I would dare to suggest that consumer confidence appears to be the highest it has been for some considerable time, despite the uncertain economic climates!  July and August are never normally this busy!  It is not just one geographical area either, although does appears to have a leaning to the south. What does seem to be apparent is that the demand is for ‘all types of mortgages' for all types of people!   From the straightforward, to the complex, to the commercial shop front, to the credit issues, to the first time landlord investing in their first Buy to Let property and so much more, we are seeing many different scenarios.  Why not visit our website at www.impactsf.co.uk and review all of our financial offerings and see how we can help you.

Getting a mortgage through the lenders in the current climates is still challenging.

If you don’t appear on the electoral roll or don’t have any credit, when applying for finance, some lenders may consider that you don’t exist financially!  This has been a hurdle in the finance world for some time.  In current climates, it seems that lenders only need to find the smallest of excuses to not agree a mortgage request. Historically, lenders were often more amenable if an applicant could not be located on a credit search. Today, if you have no regular credit commitments or do not appear on the electoral roll at your current address, be prepared for a possible knock-back. 

The market has been pretty quiet this week, with only a few lenders making headlines and reducing rates. I suspect the market is still coming to terms with an unexpectedly buoyant August.  And, be prepared for a good run in to the end of the year, as we know of at least three lenders who are shortly to launch and create a ‘stir’ with their product offerings.

AToM is experiencing large numbers of ‘complex prime’ enquiries lately. One example is for a property which is currently converted in to two properties, but where there is only one registered title.  Another example - for tax purposes - customers seeking to purchase a number of investment properties in a Limited Company name with their company structure designed purely to hold properties.  These are live examples which certainly can be placed. They just need a bit of extra thought and the location of lenders who don’t fit the normal credit scoring mentality.

Getting a mortgage through the lenders in the current climates is still challenging. One day it’s easy to get a case through, 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. 

"Best time ever to take out a mortgage" say the Nationals

The national press were spouting some fantastic headlines last week.  Especially one who ran with a front page stating 'Best time ever to take out a mortgage'!  This of course was fantastic news for the lenders and also mortgage brokers, who were referenced in the article.  

But is it really the 'Best time'?  Ten year and five year fixed rate offerings are in abundance and the lowest I can remember.  What we are also seeing, and have done for some weeks now, is a fantastic rate price war on the high street.  For the right deal, right income, right borrowing percentage of the property value, we're looking at short term deals only just over the one percent mark.  If we'd have been told this would happen a year ago, we might have laughed in disbelief!  In addition, the Bank of England governor in a recent speech even alluded to a possible rate cut after suggesting inflation will become deflation, causing yet more stir across the market and pundits to push back rate rise estimations even further, well in to 2016.

So, there seems to be no right or wrong answer to the question ‘is it the Best ever time to take out a mortgage?'  There is only what is right for your individual circumstances and budgets.  One thing is for sure, rates will change and they are so daily currently!

Finally, AToM are delighted to announce the launch of a new specialist lender, Foundation Home Loans. With just a small number of launch partners, FHL will be offering Buy to Let products across the market with a number of niches including no minimum income requirements, some credit history issues considered, max age 85 at the end of the term, no credit scoring and no early redemption penalties on some products.  This is an exciting time and we welcome FHL to the market and look forward to working with them.

Falling in love.....with long term fixeds?

With ten year fixed rates now below 3% and five year fixed rates falling below 2.25%, the market is awash with activity.  But is the nation really falling in love with long term fixed rates?  Right now, I'd say no.  Despite valentines day being around the corner and Fifty Shades of Grey ready to smash all box office records this weekend (don't get why!?), people are ignoring the romance of their finances and are happy to let their biggest monthly expense carry on at a gamble and remain loyal to their current (lending) partner.!

It's surprising how many people don't review their mortgage rates frequently.  Many still believe that rates can drop further and some just really can't be bothered with the hassle to change.  The reality is that we are on a knife edge and rates are predicted to increase, but the mortgage pundits are now suggesting 2016 is more of a realistic expectation for a rate rise.  As such, many are now taking advantage of the opportunity to remortgage with a free valuation and free legal costs but are chancing their arm with a short term tracker rate (lower rates than fixed, but can fluctuate).  Whatever your risk appetite, the options available now are likely to be better and cheaper than sitting on a lenders standard variable rate or reversion rate.  Don't wait until tomorrow, seek advice and save!

Another reason people don't switch is because they think they are too complex to be helped.  In a rapidly expanding market with highly competitive rates, many lenders have looked at other ways to assist customers rather than just pay rates.  This can include criteria such as types of property, types of customer, income make up, guarantors, charges on more than one property and so on.  The likelihood is that you are not alone in your requirements and there will be a lender out there willing to assist and who probably needs you just as much as you need them!