With all the recent headlines appearing in the national press on mortgage rates, are you looking to remortgage? Most lenders look to attract new customers, but are less likely to offer attractive options to stay with them. This, in the main, is due to the different fees and charges that can be added to the new mortgage at the outset. In the current climate, the lenders bottom line tends to be more profitable with new clients, rather than old. So don’t feel loyal, if a better option is with another lender; think of number one!
However, we’re still stuck with the fact that many lenders do not want to lend in huge volumes. Therefore, you may find that actually getting a mortgage becomes the main obstacle and you may have to stay with your current lender anyway!
The other option, if you’re looking to raise cash for home improvements, to consolidate debt (although not encouraged) or for another legal purpose, is a secured loan.
A secured loan is a 2nd, or subsequent charge, designed for homeowners 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.
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.
As with all finance, seek advice and think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other loan secured on it!
28 January 2011
21 January 2011
Under pressure...!
SWAP rates (mechanism through which lenders can acquire a fixed price for funding over a specific period of time) have risen sharply over the last week. As a result, some lenders have withdrawn fixed rates and launched new products with higher interest rates. Many are predicting that whilst tracker rates (following the Bank of England Base Rate, BBR) will remain pretty low, fixed rate products, once raised, will not come back down. This is despite the BBR remaining at 0.50% for yet another month. The pressure of rising inflation (3.7% in December) is said to be worrying the money markets and pushing up SWAP rates. In addition, rising inflation puts pressure on to the Bank of England to raise interest rates to curb spending. Are we set for a BBR increase in February? Should you fix before it’s too late?
We are three weeks in to the New Year and that can only mean one thing - the arrival of bank statements, credit card bills, store card bills, and so on, showing the Christmas spends. Depressing, I know! But I can’t stress how important it is to make payments, even if it’s the minimum required. If you miss a payment to any financial institution, this will affect your credit score and could affect your ability to obtain a mortgage, whether you are a first time buyer, home mover or looking to remortgage.
Specialist lenders will look at those with missed payments (to unsecured credit), defaults, and/or CCJs, however these lenders price for risk and as such their interest rates are somewhat higher than those offered on the high street.
These lenders tend not to be household names and carry out a manual underwriting approach, rather than a credit scoring decision. Deposit requirements are a minimum of 20% depending on the customer’s credit issues. The higher the financial issues, the higher the deposit required and the higher the interest rate offered. Rates range from early 5%s and go right up to and over 10%. Each application is assessed on its own merits and individual circumstances may differ. For further information and detailed terms and conditions, speak to your local independent mortgage brokers!
We are three weeks in to the New Year and that can only mean one thing - the arrival of bank statements, credit card bills, store card bills, and so on, showing the Christmas spends. Depressing, I know! But I can’t stress how important it is to make payments, even if it’s the minimum required. If you miss a payment to any financial institution, this will affect your credit score and could affect your ability to obtain a mortgage, whether you are a first time buyer, home mover or looking to remortgage.
Specialist lenders will look at those with missed payments (to unsecured credit), defaults, and/or CCJs, however these lenders price for risk and as such their interest rates are somewhat higher than those offered on the high street.
These lenders tend not to be household names and carry out a manual underwriting approach, rather than a credit scoring decision. Deposit requirements are a minimum of 20% depending on the customer’s credit issues. The higher the financial issues, the higher the deposit required and the higher the interest rate offered. Rates range from early 5%s and go right up to and over 10%. Each application is assessed on its own merits and individual circumstances may differ. For further information and detailed terms and conditions, speak to your local independent mortgage brokers!
14 January 2011
Lenders are showing an appetite to lend!
2011 has started with a bang! The Bank of China have reduced their Residential Life Time Tracker rate to just 1.80% above the Bank of England Base Rate. Currently, the pay rate is 2.30% (APR 2.50%). This is available to home movers, those re-mortgaging and also to First Time Buyers, up to a maximum loan of 80% of the property value. A very good rate and a positive step forward from this lender.
BM Solutions, part of the Lloyds Banking Group, have launched some fixed rate Buy to Let mortgages with arrangement fees of just 1.5%. Compared to some in the market, the fees alone might save up to 2% in costs! Many believe the Buy to Let / Investment property market will boom in 2011.
However, with regards to fixed rates, we’ve seen some lenders already increasing their product rate offerings. Whether ‘to fix or not to fix’ your mortgage rate, will be an ongoing debate throughout 2011.
Lenders are showing an appetite to lend. One lender on the AToM panel has allocated a tranche of £10m in funding to be distributed in January. This is great news for the market and in addition, this lender does not credit score. So if a high street lender has declined your application due to a low credit score, or because you don’t fit their particular requirements, you may be exactly the type of customer our lender is looking for. However, please note that they are not looking for those who have had previous credit issues.
Finally, First Time Buyers are likely to be in need of most support throughout 2011. So far, there have been some small glimmers of hope with a couple of lenders revamping their 90% loan to value products, so requiring just a 10% deposit but this is still not enough! The interest rates are relatively high and as such the monthly payments on this type of mortgage won’t be attractive to many prospective borrowers. Those with a higher deposit will attract a lower interest rate. But in current climates, that tends to be difficult to achieve. More still needs to be done to help first timers get onto the property ladder and I hope that lenders take action to assist. Sooner, rather than later.
BM Solutions, part of the Lloyds Banking Group, have launched some fixed rate Buy to Let mortgages with arrangement fees of just 1.5%. Compared to some in the market, the fees alone might save up to 2% in costs! Many believe the Buy to Let / Investment property market will boom in 2011.
However, with regards to fixed rates, we’ve seen some lenders already increasing their product rate offerings. Whether ‘to fix or not to fix’ your mortgage rate, will be an ongoing debate throughout 2011.
Lenders are showing an appetite to lend. One lender on the AToM panel has allocated a tranche of £10m in funding to be distributed in January. This is great news for the market and in addition, this lender does not credit score. So if a high street lender has declined your application due to a low credit score, or because you don’t fit their particular requirements, you may be exactly the type of customer our lender is looking for. However, please note that they are not looking for those who have had previous credit issues.
Finally, First Time Buyers are likely to be in need of most support throughout 2011. So far, there have been some small glimmers of hope with a couple of lenders revamping their 90% loan to value products, so requiring just a 10% deposit but this is still not enough! The interest rates are relatively high and as such the monthly payments on this type of mortgage won’t be attractive to many prospective borrowers. Those with a higher deposit will attract a lower interest rate. But in current climates, that tends to be difficult to achieve. More still needs to be done to help first timers get onto the property ladder and I hope that lenders take action to assist. Sooner, rather than later.
07 January 2011
A positive start to 2011!
A very Happy New Year to you! This is my first day back in the office following the festive period and already I’m struggling to keep up with the number of product changes from various lenders. They are positive changes though!
The Bank of China have reduced their Residential Life Time Tracker rate to just 1.80% above the Bank of England Base Rate. Currently, the pay rate is 2.30% (APR 2.50%). This is available to home movers, those re-mortgaging and also to First Time Buyers, up to a maximum loan of 80% of the property value.
The Coventry has focused on Buy to Lets. With rates from 4.25% and zero arrangement fees, they are well worth a look if you are considering taking a step into the Buy to Let arena in 2011. Many believe this will be a buoyant area generally as First Time Buyers continue to struggle to get onto the property ladder and surrender to renting instead.
The Bank of England has released lending figures for November, stating that re-mortgaging levels increased by some £400m compared to that of October. Approvals stood at 34,262 compared to 30,429 in October with a six month average 28,210. Purchase approvals amounted to 48,019, higher than Octobers figures, but below the six month average of 48,145.
And finally... if there is one New Year resolution to maintain, resulting from the dire year that was 2010, it is to be on top of your finances! By this, I don’t just mean mortgages, although as this is inevitably your biggest debt it should be a priority! Do you have enough life cover? Have you made financial provision to cater for an unfortunate redundancy? Have you written a will? These are all matters that may seem small in isolation but which could prove to be very worthwhile at a later date.
Let’s hope that 2011 see's the beginning of a recovery in the financial world. Last year was depressing financially and this year will be tough too but there are some good signs that the property market, at least, will hold its own. Let’s hope so!
The Bank of China have reduced their Residential Life Time Tracker rate to just 1.80% above the Bank of England Base Rate. Currently, the pay rate is 2.30% (APR 2.50%). This is available to home movers, those re-mortgaging and also to First Time Buyers, up to a maximum loan of 80% of the property value.
The Coventry has focused on Buy to Lets. With rates from 4.25% and zero arrangement fees, they are well worth a look if you are considering taking a step into the Buy to Let arena in 2011. Many believe this will be a buoyant area generally as First Time Buyers continue to struggle to get onto the property ladder and surrender to renting instead.
The Bank of England has released lending figures for November, stating that re-mortgaging levels increased by some £400m compared to that of October. Approvals stood at 34,262 compared to 30,429 in October with a six month average 28,210. Purchase approvals amounted to 48,019, higher than Octobers figures, but below the six month average of 48,145.
And finally... if there is one New Year resolution to maintain, resulting from the dire year that was 2010, it is to be on top of your finances! By this, I don’t just mean mortgages, although as this is inevitably your biggest debt it should be a priority! Do you have enough life cover? Have you made financial provision to cater for an unfortunate redundancy? Have you written a will? These are all matters that may seem small in isolation but which could prove to be very worthwhile at a later date.
Let’s hope that 2011 see's the beginning of a recovery in the financial world. Last year was depressing financially and this year will be tough too but there are some good signs that the property market, at least, will hold its own. Let’s hope so!
23 December 2010
Goodbye 2010.....and 2011 - 'bring it on' !
For my last column of the year, I thought I’d start with the obligatory round up of 2010!
It’s been another year of highs and lows, with many businesses struggling to survive and some major players leaving the market. The beginning of 2010 saw mortgage rates rise, despite a low Bank of England Base Rate (BBR). Yet, a reversal in the second half of the year saw lender rates drop as they chased volume business. Abbey, Bradford & Bingley, Alliance & Leicester, etc re-branded and become Santander. Metro Bank was the first new high street Bank launch in 100 years! A coalition government now steers us on the road to recovery (!) and the Financial Services Authority is to be disbanded. In reality, it is a name change (Consumer Protection and Markets Authority) with a new owner and location (BofE)! I won’t mention the world cup! And, despite consistent ‘mortgage approvals in decline’ stories, there has been increased mortgage activity and lender appetite in recent months.
So what for 2011? There are predicted signs of growth with total mortgage lending estimated to be approaching £140bn, compared to the £136bn estimated for 2010. Tesco Bank are due to launch. House prices are predicted to dip slightly. Who can guess what will happen to BBR although, at a recent conference, a well respected commentator suggested that BBR would not move until 2012 at the earliest. Another major question revolves around interest only mortgages, with many lenders removing this option at certain levels, are its days numbered? Don’t forget the VAT increase due in January. The repayment by Banks of the Specialist Liquidity Scheme, a mere £200bn+, is due towards the end of 2011 and early 2012. We expect to see this as a lender priority late into the year.
So, the reality is another year of highs, lows and a small mix of uncertainty for us all. Let’s also hope someone rushes to help first time buyers…
Thank you for reading my column throughout 2010. It has been a hard task trying to deliver a positive spin in a negative market. There are no plus points for ignoring the truth! Please let me know if there are any specific issues/areas you would like me to cover in coming months. You can email me at dale.jannels@atomltd.co.uk, or call me on the above number.
The directors and staff at AToM wish you, your family and friends a very Merry Christmas and a relaxing New Year. We look forward to being of assistance to you during 2011.
It’s been another year of highs and lows, with many businesses struggling to survive and some major players leaving the market. The beginning of 2010 saw mortgage rates rise, despite a low Bank of England Base Rate (BBR). Yet, a reversal in the second half of the year saw lender rates drop as they chased volume business. Abbey, Bradford & Bingley, Alliance & Leicester, etc re-branded and become Santander. Metro Bank was the first new high street Bank launch in 100 years! A coalition government now steers us on the road to recovery (!) and the Financial Services Authority is to be disbanded. In reality, it is a name change (Consumer Protection and Markets Authority) with a new owner and location (BofE)! I won’t mention the world cup! And, despite consistent ‘mortgage approvals in decline’ stories, there has been increased mortgage activity and lender appetite in recent months.
So what for 2011? There are predicted signs of growth with total mortgage lending estimated to be approaching £140bn, compared to the £136bn estimated for 2010. Tesco Bank are due to launch. House prices are predicted to dip slightly. Who can guess what will happen to BBR although, at a recent conference, a well respected commentator suggested that BBR would not move until 2012 at the earliest. Another major question revolves around interest only mortgages, with many lenders removing this option at certain levels, are its days numbered? Don’t forget the VAT increase due in January. The repayment by Banks of the Specialist Liquidity Scheme, a mere £200bn+, is due towards the end of 2011 and early 2012. We expect to see this as a lender priority late into the year.
So, the reality is another year of highs, lows and a small mix of uncertainty for us all. Let’s also hope someone rushes to help first time buyers…
Thank you for reading my column throughout 2010. It has been a hard task trying to deliver a positive spin in a negative market. There are no plus points for ignoring the truth! Please let me know if there are any specific issues/areas you would like me to cover in coming months. You can email me at dale.jannels@atomltd.co.uk, or call me on the above number.
The directors and staff at AToM wish you, your family and friends a very Merry Christmas and a relaxing New Year. We look forward to being of assistance to you during 2011.
17 December 2010
Sort your finances today, not 'tomorrow'!
A time for giving, a time for receiving and a time to keep a close eye on your finances! I know, boring and Bah Humbug! However, a little bit of your time, and sifting through old paperwork over the Festive period, could save you money in the New Year!
It always surprises me how few people actually know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment. Unsurprisingly, almost everyone knows what it costs per month to the nearest penny! They will haggle for a £10 discount on a new washing machine whilst letting ‘sleeping dogs lay’ when it comes to their mortgage!
It’s very easy when the promotional rate period comes to an end to keep your mortgage with the same lender, ‘brush it under the carpet’, and deal with it ‘tomorrow’. But, we all know tomorrow never comes. A review of what’s on offer from other Lenders could give you a nice start for 2011, especially if you’re currently on a Standard Variable Rate, or equivalent.
Many Lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations and legal costs. Rates are competitively low and mortgage product choice is at it’s highest for some time.
With the Festivities just around the corner, there really is no better time to think about finances. Available credit is in somewhat short supply and the price people will be prepared to spend on Christmas this year may well receive much more thought than in previous times.
It could go two ways - firstly, people could put their cares to one side, forget the 2010 trials and tribulations and flex the credit cards with any spends being forgotten until later. Or secondly, the purse strings will be drawn and funds will be tightly managed.
The important thing is to remember to only spend what you can afford and, if you are a mortgage holder, look to see what savings you can make (it could be hundreds per month) to prepare for a better year in 2011.
It always surprises me how few people actually know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment. Unsurprisingly, almost everyone knows what it costs per month to the nearest penny! They will haggle for a £10 discount on a new washing machine whilst letting ‘sleeping dogs lay’ when it comes to their mortgage!
It’s very easy when the promotional rate period comes to an end to keep your mortgage with the same lender, ‘brush it under the carpet’, and deal with it ‘tomorrow’. But, we all know tomorrow never comes. A review of what’s on offer from other Lenders could give you a nice start for 2011, especially if you’re currently on a Standard Variable Rate, or equivalent.
Many Lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations and legal costs. Rates are competitively low and mortgage product choice is at it’s highest for some time.
With the Festivities just around the corner, there really is no better time to think about finances. Available credit is in somewhat short supply and the price people will be prepared to spend on Christmas this year may well receive much more thought than in previous times.
It could go two ways - firstly, people could put their cares to one side, forget the 2010 trials and tribulations and flex the credit cards with any spends being forgotten until later. Or secondly, the purse strings will be drawn and funds will be tightly managed.
The important thing is to remember to only spend what you can afford and, if you are a mortgage holder, look to see what savings you can make (it could be hundreds per month) to prepare for a better year in 2011.
10 December 2010
A good finish to 2010!
The end of the year is turning out to be quite a positive affair! AToM towers enjoyed a stunning October superseded by a better November for new business applications, as consumers reviewed their finances and looked to secure deals in time for the Christmas break. Many wanting to fix their mortgage payments for 2011, and beyond. Surprisingly, new purchase applications nearly matched the remortgages in number. Although the actual volume of loan amounts decreased by nearly £2m!
For the employed consumer, mortgages are relatively easy to come by. For the self employed, where net profits, drawings and dividends have been generally low over the last 24 months, it’s becoming slightly more difficult, despite the number of mortgage products being on the increase. There are many alternatives than can assist in these types of scenarios. Some lenders will look at adding additional properties as security for mortgage purposes; others will look at investing two or three years upfront mortgage payments as additional comfort for the lender where income is not necessarily easily provable. Whatever the scenario, and no matter how complex, there may well be a lender willing to assist.
Finally, the FSA (Financial Services Authority) has deferred implementing its approved persons' regime until 2012/13. As part of the Mortgage Market Review (MMR), the FSA announced that it would be extending the approved persons’ regime to include anyone who advises on or sells mortgages (mortgage advisers/brokers and Bank staff). The FSA says it remains committed to making these changes to the approved persons’ regime, but as part of its ongoing reprioritisation of work, it is deferring introduction of the changes from 2010/11 to 2012/13.
The MMR may be a controversial proposition, but the approved persons regime is one which most people agree could genuinely benefit the consumer and will be a positive step towards a better industry. The cynics question might be to ask, who’s not ready for these changes? The FSA internally, or the Banks in being able to train their staff in time?
For the employed consumer, mortgages are relatively easy to come by. For the self employed, where net profits, drawings and dividends have been generally low over the last 24 months, it’s becoming slightly more difficult, despite the number of mortgage products being on the increase. There are many alternatives than can assist in these types of scenarios. Some lenders will look at adding additional properties as security for mortgage purposes; others will look at investing two or three years upfront mortgage payments as additional comfort for the lender where income is not necessarily easily provable. Whatever the scenario, and no matter how complex, there may well be a lender willing to assist.
Finally, the FSA (Financial Services Authority) has deferred implementing its approved persons' regime until 2012/13. As part of the Mortgage Market Review (MMR), the FSA announced that it would be extending the approved persons’ regime to include anyone who advises on or sells mortgages (mortgage advisers/brokers and Bank staff). The FSA says it remains committed to making these changes to the approved persons’ regime, but as part of its ongoing reprioritisation of work, it is deferring introduction of the changes from 2010/11 to 2012/13.
The MMR may be a controversial proposition, but the approved persons regime is one which most people agree could genuinely benefit the consumer and will be a positive step towards a better industry. The cynics question might be to ask, who’s not ready for these changes? The FSA internally, or the Banks in being able to train their staff in time?
Subscribe to:
Posts (Atom)