Not only is it a great time to buy, but remortgaging is becoming attractive too. There are some very competitive 3-10 year fixed rates available and the continued uncertainty in the financial markets is causing borrowers to review and stabilise outgoings longer term.
A few weeks back, I mentioned that fixed rates were set to increase and they are showing signs of doing so! Woolwich have increased their 3, 4 and 5 year fixed rates by up to 0.40% yet, at the same time, have reduced 2 year fixed and tracker rates by some 0.30%. Interesting, as general costs to lenders acquiring fixed rate monies (swap rates) had decreased! Yorkshire Building Society also increased fixed rates by 0.40% for loans exceeding 75% of property value. If this is the sign of things to come, then a trip to AToM in the very near future could be a financial masterstroke!
The Council of Mortgage Lenders estimates that 900,000 homes are in negative equity (house value lower than mortgage balance) and that prices have fallen around 16pc during the past year, although this figure might be open to question! Notwithstanding this, some lenders are showing a willingness to assist. Halifax and Bank of Scotland (members of Lloyds Banking Group) are offering 95% loans to selected remortgage customers and up to 120% of the property value in certain cases. You won’t find these schemes advertised as they are discreet offerings to existing customers. However, anything which helps stimulate the market is encouraging.
Halifax have also launched a scheme where they will pay 50% of your first years council tax bill (to £1,000) to attract first time buyers (available until 23/5/09 - conditions apply).
Continuing the “good news”, mortgage products now available increased to 3,700 in March, a 25% increase on February. And there’s more! Lombard Street Research declared that housing is now affordable and the slump will be over by Christmas!
And finally…The Confederation of British Industry (CBI) says. "The UK recession was more extreme than expected during the first three months of 2009, but the worst is now behind us. The recession is expected to last until the end of 2009 with sluggish growth resuming in Q2 2010. The Bank of England is expected to start raising the UK Bank Base Rate from its current 0.5% level in spring 2010.”
As I started, so will I finish…Buy now…Fix now!
27 April 2009
17 April 2009
Mortgage payments are being missed..
When I was approached to write these weekly columns, the brief was to be descriptive and update readers with news from the world of mortgages not on general release. Whilst I knew times were tough, I didn’t realise how little positive news there actually is (or isn’t) in our market! Believe me, I look for positives but the stark reality of the current situation (and that still looming) makes it difficult. The statistics released by ‘creditaction’ for March, show the reality:
o Average house prices have decreased by £95 every day during the last 12 months.
o A property is repossessed every 10 minutes.
o 2,915 people are made redundant daily.
o 1 person is declared bankrupt or insolvent every 4.5 minutes.
o 33,600 applications for credit have been turned down every day during the last six months.
According to research from Which? homeowners are really feeling the pinch with 62% of the working population fretful that they or their partner may lose their job. Some 43% joint income households are anxious they won’t be able to pay their mortgage.
Despite house prices stabilising the ‘experts’ predict 2010 before ‘some normality’ returns with matters likely to get worse before they get better. Recent news from RBS with the loss of another 9,000 jobs and BT suggesting a further 10,000, indicates that the knock-on market effect will be huge.
Moneyexpert.com estimates that 8% of all mortgages holders have missed one payment during the last six months. One in twelve borrowers! Additionally, they suggest that nearly a third of all adults would face financial disaster within two months if they lost their jobs. Half of those believe they would only last a month.
Simply put, if you miss a mortgage payment, finding a lender to offer you a new mortgage is tough. Miss two or three and its as good as mission impossible.
I have said this with regular monotony but there really is no better time to review your finances and plan ahead for the next two to three years. Ask yourself questions including - if I lose my job how will I pay my mortgage? How will I support my family? If you are stuck for answers, speak to AToM or visit our website for more information. Don’t leave it any longer. Let us help you plan a positive future.
o Average house prices have decreased by £95 every day during the last 12 months.
o A property is repossessed every 10 minutes.
o 2,915 people are made redundant daily.
o 1 person is declared bankrupt or insolvent every 4.5 minutes.
o 33,600 applications for credit have been turned down every day during the last six months.
According to research from Which? homeowners are really feeling the pinch with 62% of the working population fretful that they or their partner may lose their job. Some 43% joint income households are anxious they won’t be able to pay their mortgage.
Despite house prices stabilising the ‘experts’ predict 2010 before ‘some normality’ returns with matters likely to get worse before they get better. Recent news from RBS with the loss of another 9,000 jobs and BT suggesting a further 10,000, indicates that the knock-on market effect will be huge.
Moneyexpert.com estimates that 8% of all mortgages holders have missed one payment during the last six months. One in twelve borrowers! Additionally, they suggest that nearly a third of all adults would face financial disaster within two months if they lost their jobs. Half of those believe they would only last a month.
Simply put, if you miss a mortgage payment, finding a lender to offer you a new mortgage is tough. Miss two or three and its as good as mission impossible.
I have said this with regular monotony but there really is no better time to review your finances and plan ahead for the next two to three years. Ask yourself questions including - if I lose my job how will I pay my mortgage? How will I support my family? If you are stuck for answers, speak to AToM or visit our website for more information. Don’t leave it any longer. Let us help you plan a positive future.
16 April 2009
HIPS from the outset...
New legislation came into force with effect from Monday last week regarding Home Information Packs (HIPS). Every property must now have a HIP available on the first day it is marketed for sale. The seller has to provide a copy of the pack free of charge; however, a ‘reasonable’ charge may be made to cover the costs of copying and posting it!
A National Association of Estate Agents survey has reported that HIP’s are stopping people from putting their property up for sale. The survey found that 65% believe that the new arrangements will actually discourage sellers and this will further damage the property market. The NAEA has called for HIP’s to be scrapped during the recession, and for the Government to re-examine their viability once the economy begins to grow again. If you need a HIP, make sure you shop around as prices vary dramatically and you can purchase them from many sources (including our website!).
The Council of Mortgage Lenders are anticipating some 75,000 repossessions in the UK during 2009. In the US there were over 290,000 in February alone! It is even more interesting when you look at these numbers in terms of households. In the UK it equates to one repossession for every 155 outstanding mortgages whereas in the US it is one for every 27!
We’re hearing various commentaries that house prices are showing signs of stabilising. Some local Estate Agents have confirmed that properties are selling well, but not many new properties are coming onto the market. With demand exceeding supply, this will inevitably stabilise prices. Even the experts cannot agree with the Halifax reporting that house prices dropped by 1.9% and Nationwide reporting a 0.9% rise, both in March!
If the signs are to be believed, this is positive news and lenders appetites for lending should increase. At the same time buyers, who have largely stayed out of the market, will quickly return.
A National Association of Estate Agents survey has reported that HIP’s are stopping people from putting their property up for sale. The survey found that 65% believe that the new arrangements will actually discourage sellers and this will further damage the property market. The NAEA has called for HIP’s to be scrapped during the recession, and for the Government to re-examine their viability once the economy begins to grow again. If you need a HIP, make sure you shop around as prices vary dramatically and you can purchase them from many sources (including our website!).
The Council of Mortgage Lenders are anticipating some 75,000 repossessions in the UK during 2009. In the US there were over 290,000 in February alone! It is even more interesting when you look at these numbers in terms of households. In the UK it equates to one repossession for every 155 outstanding mortgages whereas in the US it is one for every 27!
We’re hearing various commentaries that house prices are showing signs of stabilising. Some local Estate Agents have confirmed that properties are selling well, but not many new properties are coming onto the market. With demand exceeding supply, this will inevitably stabilise prices. Even the experts cannot agree with the Halifax reporting that house prices dropped by 1.9% and Nationwide reporting a 0.9% rise, both in March!
If the signs are to be believed, this is positive news and lenders appetites for lending should increase. At the same time buyers, who have largely stayed out of the market, will quickly return.
06 April 2009
Mortgage Approvals up!
The mortgage world entered this nightmare way back in August 2007. The first signs of problems, to the public eye at least, were that of Northern Rocks issues in October 07. In just that small passage of time, we lost some four or five lenders in ‘our world’. Yes they were relatively small, lending just 1 or 2 billion per annum, but they were specialist. Great for unique self certification mortgages, buy to lets and sub prime. How we miss some of those product offerings today!
Since late 07 and right up to the present (Dunfermline BS this week) many others have fallen by the wayside. Some well known and many not so well known: Victoria, Rooftop, Preferred and Mortgages plc to name but a few. They all gave us, your mortgage broker, many market options and gave you, the customer, products designed to meet your specialist requirements. As with most lenders they were owned by larger conglomerates and had funding pulled at quick or no notice, as soon as financial institutions started to come under the auditors and credit department’s scrutiny. Long gone have the days that a lender was run by sales! Everything now is purely profit and quite rightly, compliance orientated! Ignoring the latter for a second, you may have seen that this week the Woolwich launched a £150 charge for every mortgage application, even if it does not proceed for any reason! With others charging huge arrangement fees for their mortgages, it appears that lenders simply can, right now, call the shots.
There’s no doubt we have a long way to go before we see any decent signs of recovery in the market as a whole. But, as Yazz! once sung, ‘The only way is up!’. In contrast to the announcement from the Council of Mortgage Lenders recently, the Bank of England last week advised that mortgage approvals for purchases were up in February and the highest since May 08. At the same time, consumer debt repayments were the highest since records began in 1993.
Nothing to jump around about just yet, but certainly a glimmer of hope in a very uncertain and testing time for all.
Since late 07 and right up to the present (Dunfermline BS this week) many others have fallen by the wayside. Some well known and many not so well known: Victoria, Rooftop, Preferred and Mortgages plc to name but a few. They all gave us, your mortgage broker, many market options and gave you, the customer, products designed to meet your specialist requirements. As with most lenders they were owned by larger conglomerates and had funding pulled at quick or no notice, as soon as financial institutions started to come under the auditors and credit department’s scrutiny. Long gone have the days that a lender was run by sales! Everything now is purely profit and quite rightly, compliance orientated! Ignoring the latter for a second, you may have seen that this week the Woolwich launched a £150 charge for every mortgage application, even if it does not proceed for any reason! With others charging huge arrangement fees for their mortgages, it appears that lenders simply can, right now, call the shots.
There’s no doubt we have a long way to go before we see any decent signs of recovery in the market as a whole. But, as Yazz! once sung, ‘The only way is up!’. In contrast to the announcement from the Council of Mortgage Lenders recently, the Bank of England last week advised that mortgage approvals for purchases were up in February and the highest since May 08. At the same time, consumer debt repayments were the highest since records began in 1993.
Nothing to jump around about just yet, but certainly a glimmer of hope in a very uncertain and testing time for all.
27 March 2009
Mortgage lending restricted to 3 times income?
This weeks announcement from the Council of Mortgage Lenders advises that mortgage lending figures for February were down some 60% against the same time last year. Hardly surprising when available products had dropped some 85% in the same period and most lenders criteria has changed dramatically! Due to the continued pressures that lenders are placed under, they are finding many ways to refuse applications, even for those with large deposits and good credit ratings. In addition, some high street lenders have recently reduced their maximum loan amounts to £250k, and others lending above £500k are charging an additional 1% per annum for the increased “risk”!
The US government recently announced plans to buy over $1trillion of toxic mortgages from struggling US banks. Mortgages that should not have been granted in the first place and were always unlikely to be paid consistently by the consumer. No surprise there then! However, this is a positive move forward and is intended to stimulate US lenders in to funding again albeit supported by the public sector!
In contrast, the UK Financial Services Authority (FSA) are expected to announce plans to look at restricting the amount of mortgage loans advanced to consumers by capping income multiples. Only 2 years ago you could obtain a mortgage loan at 6 to 8 times your income, depending on your status. This has already reduced to the 4 to 5 level but is heavily reliant on the computer not saying “no”! The new plans are to restrict lending to just 3 times income….
This is partly justified by recent reports from the FSA that mortgage arrears are up 31% for the last quarter of 2008 compared to the same period in 2007. It’s interesting to note that arrears statistics are only reported when the mortgage account reaches 1.5% of the balance. So, on a £100,000 mortgage, the account needs to be in arrears of £1,500. Therefore, the true picture of mortgage arrears is probably substantially higher.
With an average house price in the south east of £248k (BBC statistics) and borrowing at 75% loan to value on 3 times income, you will need to prove annual income of £62k! The days of mortgage rationing are looking more like reality!
Following the success of our Mortgage Clinic we are holding another on Saturday 4th April, from 9am to 2pm, at our North Street office, Horsham. Please do come along!
The US government recently announced plans to buy over $1trillion of toxic mortgages from struggling US banks. Mortgages that should not have been granted in the first place and were always unlikely to be paid consistently by the consumer. No surprise there then! However, this is a positive move forward and is intended to stimulate US lenders in to funding again albeit supported by the public sector!
In contrast, the UK Financial Services Authority (FSA) are expected to announce plans to look at restricting the amount of mortgage loans advanced to consumers by capping income multiples. Only 2 years ago you could obtain a mortgage loan at 6 to 8 times your income, depending on your status. This has already reduced to the 4 to 5 level but is heavily reliant on the computer not saying “no”! The new plans are to restrict lending to just 3 times income….
This is partly justified by recent reports from the FSA that mortgage arrears are up 31% for the last quarter of 2008 compared to the same period in 2007. It’s interesting to note that arrears statistics are only reported when the mortgage account reaches 1.5% of the balance. So, on a £100,000 mortgage, the account needs to be in arrears of £1,500. Therefore, the true picture of mortgage arrears is probably substantially higher.
With an average house price in the south east of £248k (BBC statistics) and borrowing at 75% loan to value on 3 times income, you will need to prove annual income of £62k! The days of mortgage rationing are looking more like reality!
Following the success of our Mortgage Clinic we are holding another on Saturday 4th April, from 9am to 2pm, at our North Street office, Horsham. Please do come along!
23 March 2009
Mortgage rates on the way up?
During the past week some mortgage lenders have reduced their Standard Variable Rates following the recent Bank of England base rate reduction to 0.5% yet others have increased their fixed rates by up to 0.25%! Is this the start of things to come? What is available on a Friday night may not be there on a Monday morning.
Two more mortgage giants, Chase De Vere and Cobalt Capital, shut their doors this week. Both, further casualties of the current mortgage climate and a real loss to the sector.
Recent trade news also suggests that when regulation renewal fees are due in April, 32% of mortgage brokers will choose not to renew. That is a huge number of professional advisors likely to exit the market. Now, more than ever, it is important that you seek out the services of an independent advisor who is not tied in any way to a linked business.
Last Saturday saw AToM exhibiting at the excellent MicroBiz, a great medium for small businesses to work together and understand each others needs and benefits. We had chance to meet many different people there and all with various situations.
Some had been made redundant and were evaluating all options available to them in starting up a business, whilst others, still in employment, were forward thinking should redundancies occur. Being self employed did not seem to scare anyone! All were opportunity seekers, prepared to go over and above the standard call of duty to ensure they survive and are in the ‘last man standing’ pack!
With this in mind, the weekend could be a valuable time for you to complete a full review of your personal finances, or even go out looking to buy new property! More and more people are turning towards alternative methods for securing their families future. With saving returns so low and house prices bottoming out, many experts would agree that property is a great long term investment.
But be wary. As I have commented before, Lenders really don’t want to lend in volume currently, despite the numerous requests from no. 10! So seek independent advice to ensure you get the best available products for your requirements.
See all mortgage products available, for free, at www.atomltd.co.uk and now you can follow the latest AToM product updates on Twitter, Facebook, Linkedin, Ecademy and more, if you’re that way technology inspired!
Two more mortgage giants, Chase De Vere and Cobalt Capital, shut their doors this week. Both, further casualties of the current mortgage climate and a real loss to the sector.
Recent trade news also suggests that when regulation renewal fees are due in April, 32% of mortgage brokers will choose not to renew. That is a huge number of professional advisors likely to exit the market. Now, more than ever, it is important that you seek out the services of an independent advisor who is not tied in any way to a linked business.
Last Saturday saw AToM exhibiting at the excellent MicroBiz, a great medium for small businesses to work together and understand each others needs and benefits. We had chance to meet many different people there and all with various situations.
Some had been made redundant and were evaluating all options available to them in starting up a business, whilst others, still in employment, were forward thinking should redundancies occur. Being self employed did not seem to scare anyone! All were opportunity seekers, prepared to go over and above the standard call of duty to ensure they survive and are in the ‘last man standing’ pack!
With this in mind, the weekend could be a valuable time for you to complete a full review of your personal finances, or even go out looking to buy new property! More and more people are turning towards alternative methods for securing their families future. With saving returns so low and house prices bottoming out, many experts would agree that property is a great long term investment.
But be wary. As I have commented before, Lenders really don’t want to lend in volume currently, despite the numerous requests from no. 10! So seek independent advice to ensure you get the best available products for your requirements.
See all mortgage products available, for free, at www.atomltd.co.uk and now you can follow the latest AToM product updates on Twitter, Facebook, Linkedin, Ecademy and more, if you’re that way technology inspired!
16 March 2009
Products on the decrease, but new launches are great!
Overall, market conditions continue to deteriorate and mortgage products are subject to regular review and withdrawal. Between February and March, more than 20% of mortgage products were withdrawn from the market. To put this in context, the number of available mortgage products today are approximately 2,800 compared with 3,500 in February and more than 20,000 this time last year!
Mortgage Brain, one of the mortgage industries largest product sourcing systems recently commented that, for the first time in three months, fixed rate mortgage schemes had suffered the biggest fall (20%) followed closely by variable rate mortgages (18%) and base rate trackers at 15%.
That said, even though product offerings are on the decline, the actual rates available are extremely attractive. There is no surer bet that, despite the Bank of England Base rate being at its lowest ever, rates will increase. As a result, fixed rate mortgages should and will be in great demand.
One lender recently launched a 10 year fixed rate mortgage with an interest rate of just 4.75%. This really is a superb rate and is available to anyone looking to borrow up to 60% of the property value for either a purchase or remortgage.
For those with a smaller deposit, competitive rate examples include:
- Up to 75% LTV, 3.49% fixed for 2 years, subject to terms and conditions
- Up to 90% LTV, 5.50 fixed for 3 years, subject to terms and conditions
There are also many lenders offering attractive remortgage fixed rates to existing clients. These are known as retention rates and a specialist company like AToM can advise you on these as most are not publicly advertised by the lenders!
Please visit www.atomltd.co.uk where you can now view all major rates in the market and apply or enquire online.
Whether you are looking to remortgage or purchase, with rates so low and potentially tenuous, please don’t delay and possibly regret it later….
Mortgage Brain, one of the mortgage industries largest product sourcing systems recently commented that, for the first time in three months, fixed rate mortgage schemes had suffered the biggest fall (20%) followed closely by variable rate mortgages (18%) and base rate trackers at 15%.
That said, even though product offerings are on the decline, the actual rates available are extremely attractive. There is no surer bet that, despite the Bank of England Base rate being at its lowest ever, rates will increase. As a result, fixed rate mortgages should and will be in great demand.
One lender recently launched a 10 year fixed rate mortgage with an interest rate of just 4.75%. This really is a superb rate and is available to anyone looking to borrow up to 60% of the property value for either a purchase or remortgage.
For those with a smaller deposit, competitive rate examples include:
- Up to 75% LTV, 3.49% fixed for 2 years, subject to terms and conditions
- Up to 90% LTV, 5.50 fixed for 3 years, subject to terms and conditions
There are also many lenders offering attractive remortgage fixed rates to existing clients. These are known as retention rates and a specialist company like AToM can advise you on these as most are not publicly advertised by the lenders!
Please visit www.atomltd.co.uk where you can now view all major rates in the market and apply or enquire online.
Whether you are looking to remortgage or purchase, with rates so low and potentially tenuous, please don’t delay and possibly regret it later….
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