Posts Tagged ‘finance’

Now could be a good time to invest in property

Saturday, April 2nd, 2011

There are many people out there that are wondering how they can make money on their heard earned savings given the fact that savings accounts are offering little to nothing by way of returns. Since the base interest rate fell to just 0.5 percent two years ago many homeowners have welcomed the lower repayments that have come from the base rate drop. However, the news for savers has not been so good, with interest rates on savings plummeting.

For those with life savings to invest there are a number of options available, and some officials believe that now could be a good time to invest money in property. There are a couple of reasons for this. At present property prices are more affordable than they have been over recent years. Whilst some sellers are putting properties up at higher prices they are failing to secure sales because many would be buyers cannot get mortgage finance. This makes it more likely that sellers will drop their price for those that are willing to buy and especially for cash buyers who are ready to make their move.

A second and very significant reason for investing in property is the sky high demand for rented property amongst those that are unable to get mortgage finance or do not wish to take on a mortgage at present. This means that those planning to invest in property and then rent it out could make a nice profit as many people are keen to rent a home privately, with some even placing sealed bids and gazumping one another in terms of how much they are willing to pay each month for the privilege of renting the property.

There are a number of things that you need to think about when choosing a property for investment. For example, it is important to have your property is an area where you will get a lot of interest from would be tenants and where there are essential facilities and amenities nearby depending on your target group. For example, if you want to rent to students make sure that the property is close to a university or college.

Another reason to consider the location is that house prices vary widely from one area to another, as has been shown in a number of recent reports. This will have a significant impact on your initial investment.

Tags: essential facilities, cannot, base interest rate, news, finance, present, time

Posted in Featured Articles, Mortgage News | No Comments »

Getting debt advice in the New Year

Tuesday, December 21st, 2010

Over the past couple of years getting debt advice in the UK has become more and more difficult, as the demand for these services has rocketed because of personal debt levels, the global financial crisis, and the recession. Many people have found themselves in a position where they need to get advice relating to their debts, but getting access to these services and this advice has become a more difficult and long winded process.

It is likely that following the New Year many people will be hoping to sort out not only their existing debt but also new debt that they may have built up over the festive season, and it is likely that debt charities and advisors are going to see a sharp increase in the number of people looking for advice and assistance once January rolls around. For those hoping to get advice this can mean more lengthy delays.

Those that think that they may need help and assistance with their debts next year are therefore advised to seek help early on from one of the various debt charities and debt management agencies that are around. With delays becoming longer all the time as demand for these services continues to increase registering early on for an appointment could make all the difference.

One official said: “With the impact of the government Spending Review, uncertainty over job losses, and the financial hangover of Christmas many people will be seeking financial advice about their debts. Whereas people used to get an appointment in a matter of days this now stretches to a couple of weeks, and if demand continues to increase it could become an even longer wait. It is therefore important to register your interest early on if you want advice in the New Year to help manage your debts.”

Tags: season, official, United States public debt, management, debt, debt relief order, finance

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Survey reveals debt worries amongst consumers

Thursday, December 2nd, 2010

Many people are in debt these days, with personal debt levels amongst some households having increased as a result of the global financial crisis and recession, which has left many people strapped for cash. However, there are concerns amongst a large number of people with regards to how they will repay their debt and whether they will ever be free of it.

According to the survey nine out of ten people have run up unsecured debts, and many of these are concerned over whether they will be able to pay back the debt. Around 89 percent of consumers aged between 18 and 35 had debts that they had run up in the form of loans, overdrafts, and credit cards, and a third said that they did not think that they would ever be free of the debt.

The survey also showed that 54 percent of consumers would have to continue borrowing money in order to fund the lifestyle that they wanted. Another 20 percent of consumers said that they were not worried about their loved ones having to cope with their debt in the event that they died before the debt had been repaid. A massive 80 percent of consumers said that even in the current climate it was still too easy to borrow money on credit cards and through banks in the form of loans.

One industry expert said: “The majority of UK adults owe money in some way, shape or form, but to see that almost a third think they’ll never be free from debt is quite alarming. When borrowing money from any source, how you are going to repay it should always be in the back of your mind. A lot of people don’t really think about the consequences of borrowing money and it can be easy to get complacent, but keeping it all under control should be a priority from the off. Only borrow what you really think you can afford to pay back.”

Tags: majority, mind, result, finance, massive 80 percent, event, lot

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Personal debt issues could hit public sector workers

Thursday, October 21st, 2010

According to some industry experts many public sector workers could face rising levels of personal debt as a result of the many cutbacks that have been made by the coalition government. Having outlined the cutbacks in his emergency budge earlier this year the Chancellor of the Exchequer, George Osborne, was more specific about his cutbacks in his Spending Review in October, and there are fears that there could be around half a million job losses in the public sector.

The Consumer Credit Counselling Service has said that more and more people will have to face up to personal debt issues, and since the government cutbacks will also have a knock on effect on the private sector there will be many people that will struggle with their debts due to job losses and cuts in their hours.

Many people are already struggling when it comes to managing their debts because of the problems caused by the recession and the global financial crisis. With the cutbacks that many people now face at their places of work the problem could become even worse, and a rising number of people will be considering insolvency, debt management plans, and other solutions to enable them to deal with their debts.

The Consumer Credit Counselling Service has said that anyone that is concerned about repayment of their debts is advised to contact them or a similar debt charity so that a solution can be reached with regards to how the debt issues can be handled.

One official from the service stated: “I would urge anyone struggling to repay their debts to seek help from a charity such as CCCS or Citizens Advice who can provide free advice and support.”

Tags: Spending Review, Personal finance, job, Chancellor of the Exchequer, Consumer Credit Counselling Service, finance

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House sales fall again in September

Thursday, October 21st, 2010

It has been reported that property sales for the month of September fell for a second month in a row in September. The figures relating to property sales were released by HM Revenue and Customs, and showed that in September the number of completed sales fell to just 78,000. This compared to 82,000 in August, and was also lower than the figure seen in September of last year.

This is said to be the first year on year drop in sales since the start of the year, and comes following increased difficulties for those that are looking to take out a mortgage, with continued restrictions within the mortgage sector. The Bank of England has said that mortgage lending has become increasingly difficult, and that lending levels are likely to become increasingly subdued over the coming months. The Council of Mortgage Lenders said that total mortgage lending for September this year came to £12 billion, which was the lowest September figure since 2000.

A number of surveys and reports have been released recently, and many have shown that there has been a stop in mortgage lending and a fall in property prices, which have been fuelled by the drop in property purchases. On the other hand rental prices are said to have increased as a result of the high demand for rental properties from the many people that are not able to get a mortgage to buy a place of their own.

One housing industry expert said: “To see the number fall from 12 months ago is a worry. If transaction volumes continue to fall then we will see even greater uncertainty in house prices in the coming months making it harder for those who have to sell to find a willing buyer.”

Tags: mortgage, Sales, property, finance

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Increase the chances of getting a loan

Tuesday, October 19th, 2010

For many people these days getting a loan has become increasingly difficult, and this is partly due to the fact that lenders are being so stringent when it comes to lending criteria. With many people desperate to get finance it has become increasingly important for those looking for a loan to do all that they can to boost their chances of success.

There may be many people that are looking for a loan in the run up to Christmas, and with so many people worried about their finances for Christmas many may be relying on getting a loan in order to fund their Christmas spending and purchases.

It is important that you do not apply for a loan if you do not stand much of a chance of getting it, as this could adversely affect your credit, making it increasingly difficult to get finance in the future. It’s a good idea to take the time to order and look through your credit report before you apply, as you can then see whether you are likely to be seen as creditworthy by lenders.

It is also important to ensure that any loans that you do apply for are going to be suited to your needs. You should check the eligibility requirements on any loans you are considering carefully to ensure that you fir the criteria in terms of minimum income, age, credit status, and other criteria that may be in place.

It is also important to ensure that you compare a range of different loans in order to boost your chances of success, and this is something that you can do with speed and ease online. By comparing different loans and lenders you will be able to see which ones offer loans that are suited to your needs and which can offer the best value for money on borrowing.

Also, before you start applying for a loan work out what you want from your loan in terms of whether you want a secured or unsecured loan depending on whether you are a homeowner, how much you need to borrowing, what sort of repayment term you are looking for, and what to sort of repayments you can afford on a monthly basis. You can then focus on lenders and loans that are going to be suited to your needs rather than making random applications for loans that may not be suited to you.

Tags: Christmas, Unsecured loan, credit history, Personal finance, finance

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Payment shock for borrowers if interest rates rise

Saturday, October 16th, 2010

Officials have expressed concern that many homeowners in the UK could be left facing financial hardship if the base interest rate increases, and some have suggested that those that are in danger of facing higher repayments may want to do some forward thinking and look into safeguarding themselves against higher repayments.

Industry experts have said that interest rates in the UK could start increasing as early as next spring, and for those that are on variable rate mortgages and have been enjoying the rock bottom interest rates there could be a sudden payment shock as they find that their monthly repayments suddenly soar. One official said that homeowners needed to brace themselves for the possibility of an increase of possibly 2 percent over the next year or two.

One expert said that it was worth homeowners on variable rate mortgages considering the low rates of interest now available on fixed loans, and safeguarding themselves by switching to a low rate fixed mortgage for a few years. This would then protect them from unexpected repayment increases if the base rate was to increase over the next year or two, as their rate and repayment would then be fixed for the specified duration such as two or three years.

Andrew Montlake, a mortgage advisor, said: “As rates have fallen to historical lows people should be taking advantage of some of the attractive fixed rates on offer. While it is nice to be on a low tracker rate, this can change quickly and people have to be sure they can afford not just a 1 per cent rise, but possibly a 2 per cent rise in rates over the next year or two.”

Tags: Fixed rate mortgage, Variable-rate mortgage, Interest, finance, mortgage

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Steps taken to improve loans to businesses

Thursday, October 14th, 2010

An important first step has been taken by the banking industry to improve lending to businesses in the UK according to recent reports. The move comes following mounting pressure from the government, which has expressed concerns over the lack of finance for businesses in the UK, which could ultimately hit the economy hard.

UK banks are now said to have proposed a £1.5 billion fund for investment in small businesses in the UK, and many industry groups and officials have described the proposal as an important first step by the banking industry. A report has been issued to the treasury by the banking industry, and the £1.5 billion business fund is one of the key proposals that has been outlined in the report.

According to reports the money from the fund would be invested in businesses over a number of years, and would buy up to a 10 percent stake in businesses that have an annual turnover of between £10 million and £100 million. Both the Chancellor of the Exchequer, George Osborne, and the Business Secretary, Vince Cable, have welcomed this proposal by the banking industry.

The two made a joint statement about the measure, and said: “We have been absolutely clear that banks need to improve the lending environment for small businesses. It is important that the banks now deliver on these plans.”

The move was also welcomed by the Confederation of British Industry, with officials from the group stating that this was the sort of scheme that they had been calling on for some time. The CBI said that the fund would make a valuable contribution when it came to the financing of businesses. The move comes after accusations that banks have not been providing sufficient funding and credit to businesses since the onset of the financial crisis.

Tags: loans, finance, banks, business

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Shapps wants interest rates to be kept low

Thursday, October 14th, 2010

In a recent speech a member of the Monetary Policy Committee, which votes to set the UK base interest rate, said that he believed the base rate needed to increase from its all time low of just 0.5 percent. Andrew Sentance has voted since June to have the base rate increased, believing that this is the only way to curb spiralling inflation.

However, the UK Housing Minister, Grant Shapps, has stated that it is necessary to keep interest rates low for as long as possible in order to ensure that homes are more affordable and keep the property market buoyant. He was speaking at the conference for the homebuilding industry in London recently, and said that at present people simply couldn’t afford to buy homes and couldn’t get the finance that they needed to do so.

He said that last month interest rates on a 75 percent loan to value mortgage were at a record low of 3.79 percent on average, and he said that this had resulted from measures that the government had taken to try and reduce the public deficit as well as from the base interest rate, which has been at its lowest level in the history of the Bank of England for the past nineteen months.

Shapps said: “It’s really important that we keep interest rates low for as long as possible. The biggest problem at the moment is that people can’t afford to buy your product because they can’t get the lending to get it.” He added: ” We need a housing market that is best described as boring,” he said. “We can’t go on thinking that your home is your investment, your retirement plan, and your roof over your head. We have to live in a country where housing becomes over a long period of time more affordable, and that means steadier house prices without boom or bust.”

Tags: Grant Shapps, interest rate, Interest, finance

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Base rate stays on hold

Thursday, October 7th, 2010

Homeowners will be pleased to hear that the Bank of England and the Monetary Policy Committee have decided to keep the base interest rate on hold at its all time low for yet another month. This will mark the nineteenth month in a row that the base interest rate has been at its lowest level in the history of the Bank of England, which is 0.5 percent.

For homeowners who are on variable rate mortgage this will help to ensure that they can continue making lower repayments, thus avoiding the risk of being unable to afford their mortgage repayments. The move will also be welcomed by many industry groups, who are keen to see the base rate remain at its record low for the foreseeable future.

The decision to keep the base rate on hold has not come as any great surprise to most industry officials, as most had not expected the MPC to put the base rate up because of the continued fragility of the UK economy. This is despite the fact that one MPC member has voted to increase the base rate for the past four months in order to try and keep a lid on rising inflation.

At present inflation stands at 3.1 percent, which is far higher than the 2 percent target set by the government. However, the Bank of England believes that at present it is more important to stimulate spending and ensure the security of the economy by keeping interest rates low than increasing the base rate and focussing on inflation, which it believes will start to come down in due course.

The central bank also announced that there would be no extension of the quantitative easing scheme that was launched by the former Labour government, and through which £200 billion has already been ploughed into the economy.

Tags: finance, interest rate, bank of england, Monetary policy

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Mortgage lending to fall before increasing

Thursday, September 16th, 2010

An industry official has recently predicted that mortgage lending levels in the UK will fall before they rebound again in the coming months. The prediction has been made by Andy Pratt, chief operating officer at Alexander Hall, who claims that the August mortgage lending figures will show a decline in lending levels from mortgage companies, and that this will continue before any rebound in lending levels is seen.

His comments come following data that was released by the Council of Mortgage Lenders, which showed that there had been an increase in mortgage lending for the month of July compared to the previous month. July saw 56,000 approved home purchase loans compared to 52,000 approvals in June. However, Pratt believes that this trend will not continue when the August figures are released.

Lenders were thought to be easing up on restrictions relating to mortgage lending levels, but criteria is still very tight for many groups including first time buyers, many of whom cannot afford the repayments despite lower interest rates, and many others who cannot raise the high deposit that lenders are still demanding for their most favourable rates. Lenders are still being very cautious over who they lend to, leaving many first time buyers unable to get onto the property ladder.

Mr Pratt did add that there were signs that lenders may be intending to offer a wider range of mortgage products at higher loan-to-value ratios in the future, and this could help to reverse the trend of falling mortgage lending levels over time. However, he said that the sector would see a fall before any increase was seen.

He stated: “From the feedback that I am getting from everybody in the market, the applications in August were worse than the seasonally adjusted expectations. I think this is probably the lowest point.”

Tags: mortgage, Mortgage loan, mortgage products, finance

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Increase in calls to debt advice agencies

Thursday, September 9th, 2010

The huge public deficit in the UK is causing big headaches for the new coalition government, which blames the former Labour government for the problem and is making huge cutbacks to try and reduce the deficit. However, there is also the matter of spiralling personal debts, which are causing the same headaches for households and consumers that simply cannot cope with their debt levels any longer.

Figures have shown that the number of calls being made to the National Debtline run by the Money Advice Trust has more than doubled in the past year, as consumers struggling with their rising debt levels and sinking income struggle to keep up with repayments. Since 2008 the number of calls being made to the advice line has soared according to officials, with the global financial crisis and the recession both having taken their toll on consumer finances.

The charity has said that unless unemployment growth is halted these debt problems could continue to soar. However, with the coalition government having made huge cutbacks in the public sector, and with this expected to have a serious effect on employment levels in the UK the debt problems being experienced by consumers and households could get worse.

The Money Advice Trust also touched upon the debt problems that are being experienced by elderly homeowners, and suggested that a solution in these cases would be to release equity from their homes in order to settle other debts and reduce outgoings.

An official from MAT said: “There can be no doubt that continuing high levels of unemployment are contributing to the personal debt problems faced by the British public. We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies.”

Tags: debt, Money Advice Trust, finance, unemployment

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Consumers should shop around for personal loans

Wednesday, September 8th, 2010

Officials from a financial group have recently reiterated the importance of shopping around for the best deals for consumers who are looking to take out a personal loan. The advice comes from Sainsbury’s Finance, with officials from the firm stating that consumers could potentially save a small fortune by taking the time to shop around for personal loans rather than going for the first loan they come across.

Personal loan rates are said to have been rising recently despite the fact that the base interest rate is at an all time low of just 0.5 percent, and this is particularly true for smaller personal loans of less than £5000. Some consumers may find therefore that they are better off going for a slightly larger loan and paying less interest than a smaller loan that comes with a higher rate of interest.

With interest rates on personal loans on the rise it has become all the more important for consumers to compare the different rates and terms on loans from a range of providers before making a decision or commitment. Steven Baillie, head of loans at Sainsbury’s Finance, said that consumers looking for a loan of around £10,000 could potentially save a massive £1000 by shopping around.

He said that many people were paying over the odds for a personal loan even though they didn’t have to, and that by shopping around they could have saved a fortune on their overall cost of borrowing. With Sainsbury’s consumers are able to apply for a personal loan of between £7500 and £14999 with a typical APR of 7.8 percent.

Baillie said: “Ultimately, you must make sure you’re getting the best possible rate for your requirements and not paying over the odds, because you don’t have to.”

Tags: loan, credit, finance, Sainsbury's, Interest

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Is it worth consolidating your debts?

Wednesday, September 8th, 2010

Trying to deal with a wide range of debts can be difficult at the best of times, but in the current financial and economic climate many people are experiencing real difficulties when it comes to keeping on top of debt repayments. Over the past couple of years many people have built up a range of debts, such as overdrafts, credit cards, store cards, personal loans, and more, and this has left them facing real financial problems.

Those that decide to take action to try and address their debts do so in a variety of ways, as there are a number of options that are open to those that need to sort out their debt issues. Some people who have no hope of being able to repay their debts may opt for solutions such as bankruptcy, Individual Voluntary Arrangements, Debt Relief Orders, and debt management plans.

There are also people who have a variety of debts, but do not want or need to take such drastic action as insolvency or debt management solutions, which could ultimately make their financial future difficult in terms of being able to get credit and finance in the future. For many of these people one effective solution is to consolidate their debts in order to reduce costs and minimise on hassle, and without taking any risks with their financial futures.

Consolidation is not the answer for everyone. For example, for those who have poor credit histories and scores the chances of being able to get an affordable consolidation loan – or any consolidation loan – may be slim to none. Also, those that are severely overstretched on their finances may find that the reduction in monthly cost from having a consolidation loan may not actually be of any real help, as their budgets are still overstretched.

For those that feel that they could comfortably continue making repayments if they wrapped up their other debts with a consolidation loan this could be the ideal solution. In addition to possibly cutting the amount paid out on debts each month these loans will enable borrowers to cut the hassle of having to deal with a variety of debts and creditors, giving them the convenience of having just one creditor and repayment to manage.

For those that do decide to opt for a consolidation loan to bundle their various debts into one it is important to remember that the interest rates, repayment periods, and terms can vary from one provider to another, so it is well worth taking the time to compare different loans and lenders before making any decision.

Tags: debt, debt consolidation, finance, debt relief

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Next year could see more people looking for debt advice

Wednesday, September 8th, 2010

A financial industry group has stated that the number of people seeking debt advice and relief could soar next year, as more and more people find themselves unable to deal effectively with their debts and financial commitments. A number of factors are likely to lead to an increase in the number of people experiencing difficulties with debt repayments, which could lead to more people needing help.

The prediction has come from a spokesperson for Lovemoney.com, who said that amongst other things rising unemployment over the course of this year could lead to more and more people struggling to pay their debts, and these people could end up needing advice on dealing with their unmanageable debts next year.

According to the head of consumer finance at the firm Ed Bowsher unemployment could soar over the course of this year, and this could make it impossible for many people to keep on top of their debt repayments. He said that options would be limited for those that were affected, and they would have to choose from filing for bankruptcy or opting for other solutions such as debt management or Individual Voluntary Arrangements.

He also said that it was likely that banks would end up writing off a lot of personal debt next year, as a result of the influx of consumers that may find themselves unable to meet repayments on loans, credit cards, and other debts. The huge cutbacks made by the coalition government in the recent emergency election are likely to affect job in the public and private sectors according to officials, and this could leave a huge number of people high and dry when it comes to repaying their debts.

Tags: Lovemoney.com, debt, finance, unemployment

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Few banks lending to new customers

Tuesday, August 31st, 2010

The global financial crisis and the recession has led to the near collapse of the banking system in the UK, and were it not for the money from the public purse – which is made up of taxpayers’ money – many banks would have run into even more serious problems than they already have encountered.

During the financial crisis many of the country’s major banks had to be bailed out with the use of taxpayers’ money, but despite this recent research has shown that there are only a few banks that will now lend to new customers. The figures were revealed after one financial website carried out an undercover investigation via lenders’ websites, and last month it found that only four lenders were offering loans to new customers.

Around twenty six lenders’ websites were put under scrutiny as part of the investigation, and those carrying out the investigation determined that banks appeared to be lending to only carefully selected customers, and even then they were charging high premiums for the privilege. Interest rates on personal loans were found to be at their highest in ten years, even though the Bank of England base rate stands at just 0.5 percent, which is the lowest in the history of the central bank. The average rate on a loan of £5000 was 12.6 percent, which reflect how huge the margin between bank loan rates and the base rate has become.

An example highlighted by the officials that carried out the investigation was the Barclays site, which read: ‘You could be eligible for a Barclayloan Plus if you’ve held a Barclays current account for more than 12 months, paid at least £1,000 into your account each month, managed your account well and have a good credit history.’

Tags: Interest, Bank, finance, bank loan rates

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A third of Brits will lend to friends

Tuesday, August 31st, 2010

In the current financial climate there are many people that may be struggling to get any sort of finance such as an overdraft, loan, credit card, and the like, and for many of these people the only option left available is to turn to a family member or friend to borrow money if the need arises.

However, the concern for friends and family members when it comes to lending money is whether they will ever see it again, as the pressure for a person to repay someone that they are close to is obviously nowhere near as great as if they borrow the money that they need from a lender.

Recent research has shown that one in three Brits would be prepared to lend money to a friend that was in financial need, but many are convinced that they will never see the money again. Around 32 percent of those responding to the survey said that they would give their friends a loan, with the typical loan amount being around £40. However, many of them said that they did not think that they would see their money returned to them.

Around 35 percent of respondents to the survey said that they knew that they would have to keep reminding their friends if they wanted the money to be repaid, and a further 25 percent said that they would be too embarrassed to ask their friends for the money back and would therefore end up writing the debt off.

The survey also showed that 70 percent of those that had lent money to friends had to wait at least two weeks before they got the money back, and 4 percent had ended up waiting for more than a year to be repaid. Another 18 percent said that they would not see their money again. Around 7 percent of respondents said that they had decided that they would never lend money to friends.

Tags: finance, debt, loan, friends

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Panic could mean many fix their mortgage rates

Monday, August 30th, 2010

Recent predictions from industry officials have sparked concerns amongst many homeowners over their future repayments, with one official claiming that the base rate could rocket from its current all time low of just 0.5 percent to a shopping 8 percent over the next couple of years, which could push mortgage interest rates up to 11 or 12 percent.

For many homeowners this would put them in financial dire straits, adding hundreds of pounds a month to their mortgages and putting them at risk of losing their homes altogether if they cannot find the extra money to make these higher monthly repayments.

It is now thought that these claims and predictions over the base rate increasing could result in people flocking to fix their interest rate before the base rate does go up, although nobody knows when this will be. Some experts have said that the recent reports and predictions are simply scaremongering, and have warned consumers not to rush into taking measures that may prove unnecessary.

However, others are warning consumers to look into the options available to them, as although the base rate may not go up yet it will go up at some point, and consumers need to have a good idea of what their options are if and when this happens. For those that would struggle to maintain repayments on their mortgages if the cost went up each month this is particularly important.

One financial industry official said: ‘If borrowers know they would struggle if rates started to jump, it is important to look at ways of preventing mortgage payments shooting up.’

Tags: Mortgage loan, finance, interest rates, mortgage

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Mortgage restrictions affect first time buyer numbers

Monday, August 30th, 2010

It has been reported that restrictions in the mortgage market have resulted in a drop in first time buyer numbers. A report has been released by the property website Right Move, with the data showing that there has been a significant drop in the number people looking to purchase their own home this July compared to the same month last year.

The property company claims that the number of first time buyers looking to buy their own home this July fell to 22 percent and this compared to 31 percent in July of last year. The research indicated that there were a number of possible reasons for the sharp drop in first time buyers looking to get onto the property ladder over the past twelve months.

Right Move officials also warned that the number of first time buyers was at half the level that was required for a healthy housing market. This will come as a blow for the property market, which has been experiencing real difficulties since the onset of the global credit crisis and has only recently started to experience any degree of recovery.

The availability of mortgages is a major concern for many people, and with banks still being very cautious over mortgage lending many may be concerned that they will not be able to get a mortgage. Another problem is that many would be first time buyers cannot raise the deposit that lenders are demanding, and this could be made even worse by news that the Bank of England may be intervening to have mortgage loans capped thus restricting access even further.

Miles Shipside from Right Move said: “With the number of prospective buyers at the bottom of the chain being half of normal levels, the question sellers further up the chain will be asking is ‘who will be at the bottom of my chain?’”

Tags: finance, Mortgage loan, mortgage, first time buyer

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Buy to let mortgage market could remain difficult

Thursday, August 26th, 2010

During the boom years in the property sector buy to met mortgages became very popular, and many people invested in properties to rent out over the course of the property boom. However, since the global credit crisis and the near financial collapse seen over recent years the mortgage markets have changed radically, and buy to let is just one of the sectors that have been affected.

Getting a buy to let mortgage has been difficult for the past couple of years, and although the mortgage market is said to have improved over recent months officials believe that buy to mortgage access will remain restricted for some time to come. Buy to let mortgage lenders are also facing a drop in confidence levels amongst would be landlords.

Research was carried out by LSL Property Services, and in its report said that there are a number of factors that are contributing towards the state of the situation. Officials believe that the bleak conditions in relation to buy to let mortgages could continue until at least 2012.

Increased capital gains tax in the UK has been partly blamed for the situation, as this means greater financial losses for higher rate tax payers. This, in combination with house price falls seen recently, has given rise to speculation that the buy to met mortgage market could continue to experience difficulties.

The survey that was carried out that previously 48 percent of landlords thought that it was a good time to buy due to rising rents and house prices. However, this confidence is said to have been stopped in its tracks because of the situation with capital gains tax and the more recent fall in house prices.

Tags: mortgage, landlords, buy to let, finance

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Boosting your chances of getting a mortgage

Tuesday, August 17th, 2010

Finding a suitable mortgage these days is not an easy task, and with so many lenders imposing restrictions when it comes to offering mortgage loans it is important to be prepared before you take the plunge. Without some sort of preparation and research you could end up wasting your time on mortgages that are unsuitable, that you cannot afford, or that you are not eligible for, so some forward preparation can go a long way.

One of the things you need to check is how much you are able to borrow, and it is advisable to do this before you even start searching for a property, as otherwise you could end up looking at properties that are out of your price range. This will also stand you in good stead if more than one person puts in an offer on the property you want, as the seller will have peace of mind that you can definitely borrow the amount needed.

Another important consideration is the type of mortgage product that you want, such as a fixed rate mortgage, a standard variable rate, a tracker mortgage, or one of the other mortgage products that are available. Many lenders offer a range of different mortgage products, and different ones will suit different needs. However, if you are unsure which is best for you it is always worth seeking financial advice from an independent mortgage advisor.

Your eligibility for a mortgage is another thing that you need to consider, and this includes checking your credit rating, as this may determine whether the lender is likely to take you on. You should check your credit rating as early as possible, and if it is poor it may be worth considering holding off getting a mortgage until you have time to improve it, as the difference in interest, and even the chances of getting a mortgage, can be greatly affected.

Comparing mortgages is vital when it comes to finding the right deal. You can do this yourself using resources such as the Internet, where you will find many lenders and deals. However, getting a mortgage can be a tricky affair, especially for first time buyers, so you may want to consider enlisting the help of an experienced and well connected independent financial advisor. You may have to pay a fee upfront, but can then be sure that the advisor will be working to get the best deal for you rather than one that makes him or her the most commission.

Tags: independent financial advisor, mortgage products, mortgage, finance, Mortgage loan

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Lending to businesses down due to banks

Tuesday, August 17th, 2010

Since the onset o the global financial crisis small and medium sized businesses have really struggled to get access to finance from banks, and this has caused a great deal of concern amongst many officials, including the government, with regards to how the economy can improve if businesses are not able to get the finance that they need.

It has been suggested in the past that the reason behind lower lending levels to businesses was a mixture of lending restrictions on the part of banks and weak demand from businesses, which were said to be wary about taking on finance in the current financial climate. However, one group of industry officials has said that weak demand is not the reason behind the low levels of lending to businesses, and that this is largely down to banks.

The claim was made by members of the Telegraph’s group for owner-managers, who have claimed that amongst banking frontline staff there have been inconsistent lending decisions, more security demands, higher charges on overdraft facilities, and a general lack of knowledge when it comes to business lending.

The owner of an estate agency said: “I almost believe them when they say there is no demand but it probably has a lot to do with the terms they want to lend on.”

Another business official explained how her business loan request was handled, stating: “It all started out well, with ‘can’t see it will be a problem’ kind of statements, which slowly deteriorated to silence; then not bothering to return my calls; to a ‘no’ decision; to treating me like something that had dropped off the end of their shoe. And absolutely no explanation of why or how their position had changed.”

Tags: loan, Bank, Business_Finance, buainess, finance

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A third of home equity pensioners pay off debt

Thursday, August 12th, 2010

Over the years many older homeowners who have had equity in their homes have drawn on this equity and used the money for a variety of purposes, from making repairs and improvements to the home to treating themselves to a once in a lifetime trip overseas.

According to a recent report many pensioners who are drawing on their home equity are now using the money to repay debt. Figures show that around one third of retired pensioners that are taking equity from their properties are now using the money to repay their debts. The research was carried out by the University of Birmingham, and was on behalf of the charity Age UK.

The most common reason for taking equity from the home for retired pensioners was still to carry out repairs, improvements, and maintenance in the home, and around half of all those taking equity from their homes were using the money for these reasons. Key Retirement Solutions, the equity release specialists, have said that this year older people will spend around £550 million on home improvements.

Like many other people a rising number of pensioners have accrued more debt over recent years as a result of the financial crisis and the recession, and using their home equity has become an effective solution for many of these older homeowners to repay the debt and ease their financial problems.

One consumer said: “My elderly aunt had built up a fair amount of debt in terms of credit cards and loans over the years, and now she’s retired repayments were becoming a struggle. However, she did have cash tied up in her home so rather than struggling along each month we advised her to use the money that was in her home to clear the debts and then spend some time enjoying retirement.”

Tags: finance, debt, credit, equity release

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Further problems for interest only homeowners

Thursday, August 12th, 2010

Over a number of years prior to the global credit crisis many people buying homes were able to get interest only mortgages, and these mortgages allowed the buyer to repay only the interest on the mortgage over the repayment term, with the actual loan amount being repayable only at the end of the repayment term.

The reason why so many people opted for this type of mortgage was because the monthly repayments were far higher because borrowers were only making repayments on the interest rather than on both the capital and interest. However, the idea behind these mortgages was that borrowers had a sideline investment that they could use to pay the loan off at the end of the mortgage term, and this is something that many failed to do.

As a result of the high risk associated with interest only mortgages many lenders have now stopped offering them, and there are concerned that this could cause severe problems for current interest only mortgage customers who need to remortgage.

Officials have said that around one million homeowners who have interest only mortgages could be sitting on a mortgage time bomb because they may find that if they need to remortgage they will get moved to a repayment mortgage, which means that their monthly repayments will be far higher.

A spokesperson from Private Finance said: ‘Borrowers are under increasing pressure to switch to a repayment loan. But the monthly cost of a repayment mortgage is far higher than interest-only, so if lenders stop offering interest-only options, borrowers may be unable to remortgage. This could mean going onto their lender’s standard variable rate (SVR), rather than remortgaging to a fix or tracker, which could become unaffordable when interest rates start to rise.’

Tags: remortgage, finance, Interest-only loan, mortgage

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Many people confused about mortgages and finance

Thursday, August 5th, 2010

These days the world of finance has become increasingly complicated, and a huge number of financial products and services means that whilst consumers certainly have far more choice they can also get very confused by the wide range of financial products and services that are available from different banks, lenders, and financial institutions.

In fact, a recent survey that was carried out has confirmed that the vast majority of adults in Britain are confused about a variety of financial products, which can be quite dangerous in the current financial climate when it pays to have some level of knowledge about different financial products and some level of understanding about how they work.

The study was performed by the University of Bristol and the insurance comparison site confused.com. As part of the study around six thousand consumers were polled, and the research found that a huge number of people were confused about various financial products suc

h as savings, mortgages, pensions, and more.

The study found that the least confusing financial product or service for consumers was credit cards, with 40 percent of respondents stating that they were not confused at all by credit cards. However, a massive 83 percent of respondents expressed confusion when it came to mortgages and pensions.

Banker bonuses created confusion for 84 percent of respondents, and 80 percent said that they were confused by changes to tax rates. When it came to unemployment rates 75 percent of those responding to the survey were confused. The survey even showed that 42 percent of people lay in bed at night pondering over this confusion.

An official from Confused.com said: “It’s not surprising that financial products and terms account for so much confusion in modern life. It’s easy to see how making decisions could lead to stress and worry.”

Tags: mortgages, financial products, confused.com, finance

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BBA says mortgage lending still subdued

Friday, July 30th, 2010

A recent report from the British Banker’s Association has shown that mortgage lending levels for the month of February remained subdued. In its report the BBA stated that the UK’s big banks approved 35,275 mortgages for the month of February, which was not much higher than 35,154 seen in January. (more…)

Tags: British Bankers Association, Banking, mortgage, Personal finance, Financial Services Authority

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Is it worth overpaying on your mortgage?

Monday, July 19th, 2010

Whilst there is no doubt that many people are struggling when it comes to their finances following the last couple of years, which have been financially turbulent for everyone, the one good thing that has come into effect for homeowners is the rock bottom base interest rate, which stands at just 0.5 percent, the lowest it has ever been in the history of the Bank of England.

Whilst this rock bottom base rate is good news for homeowners that are still paying on their mortgages, as it means that their mortgage repayments fall if they are on a variable rate mortgage, it is not so good for savers, many of whom are not getting returns on their savings.

As a result of this situation many people have asked themselves whether it is worth putting the money they save on their mortgage repayments into a savings account given the low level of return that they will get on it. Instead, many have opted to use the extra cash to overpay on their mortgage, which could ultimately mean that they pay far less in interest over the term of the loan and could cut the repayment term dramatically.

For some of those people that have seen their mortgage repayments drop as a result of the base interest rate the savings have been significant, and considering that the base rate has been at 0.5 percent since March of last year many would have saved a small fortune if they had put the money into savings. However, by overpaying on their mortgage some homeowners have made even more in the long run because of the huge amount of interest that they will save and the years that they can cut off their mortgage term.

Industry officials have said that by overpaying by a relatively modest amount each month whilst the going is good and the base rate is low some homeowners could shave years of their mortgage repayment term and could save thousands of pounds in interest. On the other hand putting the surplus cash into savings will earn very little in the way of interest in the current climate.

By overpaying on mortgages consumers can really make their money work for them, and even if this is only possible on a temporary basis until the base rate increases and repayments increase it can still make a big difference to homeowners.

Tags: mortgage, savings, finance, overpay, Mortgage loan

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Irish banks told to hold fire on negative equity mortgages

Friday, July 16th, 2010

Banks in Ireland that were planning to start offering negative equity mortgages have been told to hold fire by regulators until a decision has been made with regards to whether these products should be allowed. There are fears amongst officials and regulators that these mortgages will simply push consumers even deeper into debt, sparking a debate as to whether they should be allowed.

Already there are around a quarter of a million homeowners that are currently in negative equity, where they owe more on their mortgage than the property is actually worth. According to figures this could swell to around 350,000 by the end of the year, which means a rising number of homeowners will find themselves tied to their property because of the negative equity.

With the negative equity mortgages that some lenders have been planning to offer homeowners would be able to transfer the negative equity from their existing mortgage onto the new one. However, whilst this could provide convenience for those that want to move to start a family or to take up a new job it could also land many people even deeper into debt.

Regulators are said to have written to twenty one banks so far telling them to hold fire on launching these mortgages until they have decided whether it is wise to allow the mortgages to be made available.

The regulator stated: “We intend to examine the merits of such products further with a view to consumer protection to see whether such products should be available to consumers and if so what restrictions should apply. Such a product may lead to consumers being overexposed or facing future repayment difficulties.”

Tags: mortgage, finance, Ireland, negative equity

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OAPs paying debts with cash from equity

Wednesday, July 7th, 2010

According to recently released figures many OAPs are paying off their debts through the use of cash from their equity. The data comes from Age UK, with officials from the company stating that more than one third of pensioners who have unlocked equity in their homes have used the money in order to pay off some of their debts.

The research was carried out for Age UK by the University of Birmingham. It found that around 35 percent of pensioners who had unlocked money from their homes through equity release had used the money to clear some or all of their other debts, and around 50 percent used the cash from their equity to pay for essential repairs. The research found that 36 percent of those releasing equity from their home had used the money for a holiday.

The research found that those that were releasing equity from their homes could be divided into three distinct groups. One group, which was the group that was financially better off, often used the money to make an early bequest or a large one off purchase. The second group tended to use the money to improve their standard of living. The final group, which the group that was worse off financially, used the money to repay their debts.

The data also found that two thirds of people that were aged over sixty five were people that had no mortgage with low or modest incomes. Many were also struggling when it came to maintaining their homes. Over the past couple of years, with the difficult financial climate and recession to deal with, many more OAPs have had to consider the option of equity release in order to manage financially. Many are also struggling on their current pensions.

Tags: debt, equity, pensioners, equity release, finance

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Payday loans – friend or foe?

Tuesday, July 6th, 2010

Payday lenders have received a lot of bad press over recent years over the level of interest that they charge on their short terms loans for borrowers that are looking for money to tide them over for a short period of time. With many payday lenders the APR charges can indeed be very high, which can instantly put some people off. However, there are also a number of benefits to these loans, which could make them useful for some people.

Whilst the APR on payday loans can be high it is important to remember that the loans are designed to be used over a very short term such as several weeks. As the name of the loan implies this type of loan is meant to be taken on a short term basis to tide borrowers over until payday, and this means that borrowers will not really end up paying that much for their borrowing.

Payday loans can prove ideal for those that find themselves short of money one month or have unexpected bills or emergencies arise for which they do not have the funds. These loans are not designed to be used on a regular basis in the same way as many people use their overdrafts every month, as otherwise they will prove costly. However, as a one off or for occasional use they often provide an effective solution for those in short term financial need.

Another thing to bear in mind with payday loans is that there is usually no credit check required, so those with damaged credit will not have to worry. However, borrowers will need to prove their income, personal details, and employment details, as these loans are only available to those that are working and can therefore repay the loan when they get paid.

The upper limits on payday loans can vary depending on the lender and on the income of the borrower. Generally payday loans are for a limited amount of money, with upper limits generally tending to be around £1000 with many lenders. However, this is something that borrowers should check when looking at which payday lender to go through.

For those that need finance on a long term basis a personal loan or credit card is the best option, but for those that just need to bridge the gap until payday comes around again payday loans can prove to be a good choice.

Tags: credit, loan, Personal finance, finance, payday loan

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