It's all 'go' in the Mortgage market!

There are many changes in the mortgage market to report on this week!  I start with those who have cut rates or launched new products!  These include Halifax (some rates reduced by 0.5%), Barclays (some rates cut by 0.5% across residential and Buy to Let ranges), Aldermore Mortgages (some Buy to Let rates cut by 0.8%) and Precise Mortgages (some rates cut by up to 1%).  Others including HSBC, Tesco Bank and the Post Office have all launched very attractive low fixed rates.  However, always make sure you read the small print as although the rate may be attractive, the attached fees to the product may not be so and the deposit required is probably quite substantial.  Another important point to check is the rate you will revert back to when the product fixed rate ends.  You don’t want to have a ‘payment shock’ at the end of the term if the rate you revert to turns out to be substantially higher than your initial rate.

Saffron Building Society have launched a superb innovative product in to the specialist sector aimed at those who have had a slight blemish or two on their credit history.   Called the ‘Credit Repair Mortgage’, the product, which has no early repayment charges at all, is looking to assist those who have had financial issues in the past obtain a mortgage with a view to repairing their credit score and eventually getting them back on to high street rates.  The product caters for First Time Buyers as well as home movers and is initially for those who are employed.  The real win win on this product is that the longer the customer is with the lender, the lower their rate becomes.  For example, one product tier reduces annually by 0.4% for the first three years.  This is great innovation!  Terms and conditions apply…

Secured loans have also had a positive week as Shawbrook Bank launched a 95% LTV (loan to value) home owner product.  Loan sizes range from between £3,000 and £25,000 and are secured against the property as a second charge.  This is a really great move by the lender and will service a considerable gap currently in the market when mainstream high street lenders won’t allow a high LTV loan to a customer as a first charge.

Your credit history is the lenders decision maker.

27/8/10 - Dale is away on holiday this week so it has fallen to 'the old man' to scribe and comment on the market. So here goes........

All of the mainstream lenders tend to use a system of credit scoring when deciding if they want to lend to new applicants and even the smallest of 'blips' can cause a lender to decline even best cases. It is crucial that you make all payments to any provider on time. Be it mobile phone, utility provider or lender. They are all prone to putting a black mark on your credit file if you are just a few days late. Some will do so even if you are one day late. So be vigilant, as any such misdemeanour can affect your credit rating. Whilst on this subject, we suggest to clients that they consider subscribing to one of the credit report providers such as Credit Expert or Equifax. Why? Well, a good friend recently applied to a bank to support his son as guarantor. The bank declined my friend who was certain that he had a pristine credit rating. Upon examination, it was found that someone had cloned a credit card and was using credit in his name but not paying back! We managed to resolve this, eventually, but it was a sobering exercise.

Some financial commentators are again talking about a double dip recession. Is this going to happen and if it does, where will it leave the financial services market? There is no doubt that much of the recession was exacerbated by well known TV pundits who seemed to delight in the fame that it brought them. My take on this is that confidence breeds confidence so lets hope that this time we see presenters talking the market up.

The Buy to Let market is enjoying resurgence. Landlords have more tenant applicants than houses available. Of course, this is geographically spread with some areas faring better than others. In turn, first time buyers are still finding it difficult to get on the ladder and parental support is more necessary than ever before.