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Low base rate doesn’t stop defaults on mortgages

Friday, April 1st, 2011

According to recent reports the level of defaults on mortgages loans has increased during the first three months of this year, even though the base interest rate stands at just 0.5 percent, where it has been for the past two years. Since March 2008 the base interest rate has been at just 0.5 percent, with the decision to lower it in order to try and improve affordability, cut repossessions, and boost the economy.

Since then it has stayed at this low level, and for some homeowners this has seen significant amounts of money slashed from their monthly mortgage repayments. However, although repayments for many homeowners with variable rate mortgages have come down because of the lower interest rates the cost of living has soared and many have become used to using the spare cash to pay rising bills and additional debts that they have accrued since the interest rate fell.

When the base rate increases again, which it is expected to over the coming months, those that have found another essential use for the money that they saved on their repayments when they base rate fell will struggle to rise the money to meet increased repayments. This will lead to more and more people defaulting on their mortgage repayments unless they take action early on to ensure that they can cope with a rate rise.

If the level of defaults on mortgage repayments does rise it could mean a further increase in the number of repossessions in the UK, which became a huge issue after the onset of the global financial crisis and the recession. Banks are expecting default levels over the next three months to increase to their highest level in a year.

Tags: Mortgage loan, base interest rate, low base rate, monthly mortgage repayments, Default (finance), debts, base

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Slow year ahead for UK property market

Wednesday, December 29th, 2010

According to recent reports the UK has a slow year ahead of it when it comes to the mortgage and property markets, as challenges and difficulties in these sectors are still rife. Whilst there has been talk of recovery for both the mortgage and property sector following the global financial crisis and the recession there are still many hurdles to overcome, and it is unlikely that there will be much improvement over the coming year.

When it comes to property prices many industry experts are expecting property values to drop again this year, with supply outstripping demand in what has become a very difficult and turbulent climate. The mortgage market will also remain subdued, with factors such as job losses, low consumer confidence, and lack of deposits fuelling a lower level of mortgage applications and approvals.

The Spending Review from the coalition government has resulted in a hundreds of thousands of expected job losses, and this will make both consumers and lenders err on the side of caution. Consumers will be too worried about their job security to apply for mortgage finance, and lenders will be very cautious about who they lend to given the climate.

First time buyers are also still struggling to raise the deposit levels that lenders are demanding, which will also affect the number of mortgage applications and approvals, and will mean that once again the buoyancy is stripped from the property market, further driving down prices.

One industry official said: “Although there may have been recovery in the property and mortgage markets since the worst of the credit crisis and recession there is still a very long way to go. The expected job cuts from the Spending Review will do nothing to help these sectors, as it means that both potential borrowers and lenders will be on their guard.”

Tags: mortgage markets, Mortgage loan, buoyancy, recent reports, caution consumers, credit crisis, improvement

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FSA plans could impact on property market

Thursday, September 23rd, 2010

The UK’s financial regulator, the Financial Services Authority, has found itself at the centre of a scathing attack by the Council of Mortgage Lenders recently over its plans to try and restrict mortgage lending in order to cut risks and reduce irresponsible lending.

The FSA has stated that it has plans to bring a number of measures in to restrict mortgage lending in the UK and cut out high risk loans, and this includes scrapping interest only mortgages, capping the amount that consumers can borrow, and slowing down applications.

The Council of Mortgage Lenders has slated the FSA for its plans, stating that these measures could have a serious impact on consumers and house prices. The CML said that many people would lose their dreams of homeownership as a result of the measures, and property prices could be driven down.

The CML said that consumers were right to be concerned about the plans from the FSA, as they could have a serious impact on the housing market as a whole, and could leave many of those hoping to get onto the property ladder out in the cold. The group also said that the FSA had admitted that these plans would probably lead to property values in the UK falling.

Michael Coogan from the Council of Mortgage Lenders said: “This is just one of a number of unintended consequences of the FSA’s well-meaning but misguided proposals that the CML believes the UK’s existing 11 million mortgage borrowers have every right to be concerned about.”

The FSA said: “We are keen to ensure that people who can afford a mortgage can get one, and also to protect vulnerable consumers by making sure that anyone who does take on a mortgage can afford to pay it back.”

Tags: Financial Services Authority, Mortgage loan, council of mortgage lenders, mortgage

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Why are so many people continuing to rent?

Wednesday, September 22nd, 2010

These days there are many people in the UK who are renting a home rather than deciding to buy their own property, and whilst this is damaging for the property market in the UK there are a number of reasons why many non-homeowners are continuing to rent and are not getting onto the property ladder.

The fact that so many people are now deciding to rent has pushed up the average rent in the UK over recent months, and this has been coupled with the fact that a rising number of landlords have been selling up, resulting in lower supply of rental properties and higher demand.

The mortgage market has been difficult for some time, with many people unable to access affordable mortgages, and this is particularly true for first time buyers who may have wanted to get onto the property ladder but have been unable to get the necessary finance from lenders.

Another of the reasons that many people are not buying property at the moment is because they cannot afford the deposit that is needed to get a mortgage from most lenders, as this has soared over the past couple of years with many demanding a minimum deposit of at least 15 to 20 percent of the property value in order to offer a mortgage.

For many the financial climate and economic fragility simply isn’t stable enough for them to make such a huge commitment as purchasing a property, and this is yet another reason behind the rising number of non-homeowners that are deciding to rent rather than try and get onto the property ladder. Whilst the recession may be officially over many are still in fear of losing hours at work or even losing their jobs, with the coalition government’s cutbacks in the public sector likely to produce job losses both in the public and private sectors, and this has made many too wary of committing to something as huge as a mortgage loan.

The good news is that whilst the lack of buyers in the property market may be driving up rental prices due to increased demand the same situation is also helping to drive down the cost of purchasing a property because of the lack of demand amongst buyers coupled with an increase in people trying to sell their homes, and recent reports have indicated that asking prices have now fallen for the third consecutive month, which is good news for those that do decide to buy.

Tags: Mortgage loan, Renting, mortgage, Property ladder, first time buyer

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Consumer confidence levels in mortgage and property markets still low

Thursday, September 16th, 2010

It has been announced that the level of consumer confidence in the mortgage and property markets is still low, despite claims that lenders may be easing up on mortgage lending to some consumer groups. Although there have been some recent improvements in the mortgage markets in the UK consumer confidence is still suffering, according to a recent report.

New figures have been released by the Building Societies Association, with officials stating that a large number of people in Britain are still not confident when it comes to the mortgage and property markets. The figures were compiled as part of the September 2010 BSA Property Tracker Survey. The figures showed that the number of consumers who lacked confidence in the markets increased from 21 in June to 26 for this month.

A large number of Brits do not believe that now is a good time to invest in property, according to officials involved in the survey, and there were many others who cited a number of factors as barriers to being able to purchase a property. These barriers included lack of job security in the current financial climate and difficulties in raising a deposit given the high level of deposit that some lenders were still demanding. More than 56 percent of respondents to the survey gave these reasons.

The BSA said that whilst access to mortgages was now better than it was earlier in the year many people were still left out in the cold due to factors such as job security, their credit history, and their debt levels.

BSA head of mortgage policy Paul Broadhead said: “It is clear that concerns about future falls in property prices are having a significant impact on consumer confidence.”

Tags: Mortgage loan, Personal finance, mortgage, Consumer confidence

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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: finance, mortgage, mortgage products, Mortgage loan

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How do shared ownership mortgages work?

Wednesday, September 8th, 2010

Shared ownership is an option that is now being considered by many first time buyers looking to get onto the property ladder. Buying a property outright in the traditional way has become impossible for many first time buyers, and this is due to factors such as mortgage restrictions, high deposit demands, and high house prices, all of which have affected buyers’ ability to get the mortgage that they need.

Shared ownership is a scheme that has given first time buyers a chance to get onto the property ladder gradually, and for many is the ideal solution because there is no huge deposit or mortgage required as there may be when buying 100 percent of a property. With shared ownership buyers only have to take out a mortgage for part of the property value depending on the share that they are buying, which means that the repayments are more affordable, the likelihood of getting the mortgage is higher, and the deposit is not as much as it would be with a fully mortgage.

It is worth bearing in mind that not all lenders offer shared ownership mortgages, so you will need to do a little research to find out which ones are able to help. Shared ownership properties are dealt with by housing associations, so you may be able to get advice from the housing association that you are going through with regards to mortgage lenders that may be able to help.

Over the past few years lenders have placed strict restrictions on their mortgage lending, and whilst prior to the credit crisis lenders were offering multiples of up to five times the borrower’s salary this has all changed now, making it difficult for buyers to get the amount they need to buy a home in the traditional way. In addition lenders want far higher deposits, such as 20 or 25 percent of the property value, and this is something that is impossible for many to raise.

With a shared ownership mortgage buyers may be buying a 25 or 50 percent share of the property for example, which means that they only need a mortgage for the percentage of the property that they are buying. The remainder of the home is rented from the housing association, but as and when the buyer is able to afford to buy more of the property it is possible to staircase and take on a larger share until the buyer has purchased 100 percent of the home.

Tags: mortgage, Mortgage loan, first time buyer, Property ladder

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What will happen with the base rate and mortgage rates?

Tuesday, August 31st, 2010

Since March of last year the base interest rate in the UK has been at an all time low of just 0.5 percent, which is the lowest it has ever been in the history of the Bank of England, which spans over three hundred years. However, with inflation getting out of hand it is highly likely that at some point in the near future the Monetary Policy Committee will have to consider increasing the base borrowing rate.

Whilst nobody has a firm idea of when any base rate increase may take place there has been speculation over how quickly and rapidly the rate may rise. Some believe that the rate will be increased this year in order to keep a lid on inflation, whereas others believe that it is more likely to be early of mid-2011 before any rate rises are implemented due to the continued fragile state of the economy.

One industry official has suggested that the base rate could increase surprisingly rapidly over the next couple of years, going as far as to say that the base rate could leap from its rock bottom level of 0.5 percent to as high as 8 percent within the next couple of years.

For homeowners with mortgages this could spell really bad news, as it could mean mortgage rates rising to 11 or 12 percent, which could add hundreds of pounds a month to the average mortgage. With some people still suffering financial problems because of the recent recession and job losses this could have a really negative impact, and could leave many people unable to afford their repayments, which could lead to rising repossession numbers.

With this in mind it may be worth homeowners looking at their options when it comes to their mortgages. Whilst nobody should rush into taking drastic action as a result of the rumours and speculation it is always advisable to have a good idea of the options available so that you can be prepared for when the base rate does start to increase.

For many the choice of a fixed rate mortgage may be a tempting one to protect them from huge increases in interest rates, but before making any changes or committing to any particular mortgage deal it is well worth seeking advice from a professional and experienced independent financial advisor to ensure that you get the best deal.

Tags: base rate, mortgage, Mortgage loan, bank of england, Interest

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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, interest rates, mortgage, finance

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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: first time buyer, Mortgage loan, mortgage, 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: finance, Mortgage loan, independent financial advisor, mortgage, mortgage products

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Good news for first time buyers when it comes to house prices

Thursday, August 5th, 2010

One industry expert has recently stated that the recent fall in house prices in parts of the UK will come as good news for first time buyers, many of whom have been disappointed that property prices have been rising again over recent months, putting home ownership even further out of their reach.

Paul Holmes from property company Firstrung said that the country’s first time buyers would welcome the fact that house prices had fallen again recently, but he added that there was still a long way to go for first time buyers in terms of the price of property and the amount that they could actually afford.

For many first time buyers getting a mortgage is already a difficult enough task but with the price of property still high in the UK compared to many other countries many simply could not get a mortgage for the amount that they required. For many the deposit was still a huge issue, with many lenders still demanding deposits of 25 percent or more.

During the month of July asking prices in the UK fell for the first time this year according to the property website Right Move, and this resulted from an influx of sellers onto the market compared to a smaller number of would be buyers due to the problems that many buyers are experiencing in getting a mortgage.

One first time buyer explained the difficulties that she had been facing in trying to get onto the property ladder in the current climate, stating: “Although house prices are said to have fallen recently, which is good news for people like me, the price of property in England is still way too high, and with the higher deposits that lenders want buying is still out of the question for me.”

Tags: mortgage, house prices, Mortgage loan, first time buyer, Property ladder

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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: overpay, mortgage, finance, savings, Mortgage loan

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Expectations over house prices hit by mortgage concerns

Wednesday, July 7th, 2010

According to a recent report expectations over house prices are being adversely affected by consumer concerns over mortgages. Concern amongst consumers over both the state of the economy and the availability of mortgages has resulted in expectations relating to house prices in the UK being hit. The data comes from property website Zoopla.co.uk

The figures show that there has been a drop in the number of people that are expecting property prices to go up over the coming six months. This has fallen to 78 percent this month compared to 81 percent three months ago. The figures also showed that many people still thought it was very difficult to get a mortgage, and this is thought to have impacted on expectation over property prices.

According to the Zoopla survey 77 percent of those that were polled thought that the availability of mortgages had not improved over the last three months. 27 percent of those polled thought that it was now more difficult to get a mortgage than it was in May. Another 34 percent of those polled said that they found that trying to get a mortgage was their biggest obstacle when it came to buying a property.

Another 21 percent of those that were polled said that the public sector job cuts that were outlined in the recent emergency budget by George Osborne would negatively affect the health of the property market, and 25 percent thought that rising interest rates would impact negatively on the property sector.

Nicholas Leeming, commercial director of Zoopla.co.uk, said: “The fear remains that the revival in the housing market will be derailed unless the banks make a concerted effort to increase lending. With job cuts looming in the public sector and interest rate hikes expected at some point, the new government has its work cut out for it to ensure that home ownership remains affordable and attainable for most people.”

Tags: prices, Zoopla.co.uk, mortgage, property, Mortgage loan

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Can first time buyers get an affordable mortgage?

Saturday, June 26th, 2010

Over the past couple of years there is no doubt that things have been very difficult for first time buyers, and for many their dreams of homeownership have been dashed due to high deposit demands, stricter lending criteria, and higher interest rates charged to certain groups such as first time buyers.

However, although there have been extreme difficulties over the past couple of years when it comes to purchasing a home as a first time buyers the market is said to have eased up over the past couple of months, and this could mean that first time buyers won’t have such a tough time getting the mortgage that they need.

So, is it actually easier now for first time buyers to get a mortgage than it was say twelve months ago? Well, in actual fact the mortgage market has eased up to some degree, and there are now more mortgages available that are suited to first time buyers and even aimed at first time buyers, which is great news for those that want to get onto the property ladder.

However, things are nowhere near as easy as they were in the past. Just a few years ago first time buyers could get mortgages for 100 percent of the property and even for 125 percent of the property value, but this has now all changed. These days first time buyers would be lucky to find a mortgage for 95 percent of the property value, which just a few years ago was the norm.

The number of lenders offering 90 percent mortgages for first time buyers has increased, and this is good news for those hoping to get onto the property ladder as it means having to raise less of a deposit, although buyers may still have to stump up a substantial amount to be able to put down the necessary deposit, which can be a problem given that first time buyers have no previous property from which to take equity.

Another thing that could stand between potential first time buyers and home ownership is the fact that property prices are still quite high, and therefore many cannot get the level of mortgage that they need. A way around this is to look at scheme such as shared ownership or Homebuy Direct, which are schemes that make it easier and more affordable for first time buyers to get onto the property ladder.

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

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Average fixed mortgage rates fall to seven year low

Monday, June 21st, 2010

The average rate of interest on a two year fixed rate mortgage has fallen to its lowest level in seven years, according to market data. Reports have shown that the average rate of interest charged on a two year fixed rate mortgage has now fallen to just 4.52 percent, which is the lowest it has been since September of 2003 when it fell to just 4.51 percent.

With lenders trying to get consumers off variable rate mortgage deals many have been dropping their fixed rate mortgages since 2009, and this has seen the average rate on these fixed mortgages continue to fall steadily. Officials said that many consumers are on standard variable rate mortgages at record low levels, and lenders want to try and get them onto fixed rate deals by dropping the rates to make the deals seem more tempting.

Industry experts have said that homeowners are now increasingly staying on standard variable rate mortgages with low rates of interest rather than switching to higher rate fixed rate deals, and this is something that lenders are determined to address. The urgency for lenders has been further increased by the fact that the base rate has now been at a record low of just 0.5 percent for well over a year now.

One finance expert said: “Many borrowers are opting to remain on record low SVRs and overpaying their mortgage rather than secure a new deal at a higher rate. Lenders are trying to incentivise borrowers onto new fixed rate deals by making significant cuts to rates. A fifth of lenders have moved to increase their SVR since bank rate was kept on hold after finding their previous level unsustainable. Competition for a limited amount of mortgage business continues to increase amongst lenders, who are once again actively competing to be top of best buy tables. Previously, only deals for borrowers with large deposits were seeing cuts, but as the market improves borrowers with smaller deposits are being offered more competitive deals. The platform has been set for the mortgage market to return to some sort of normality, while still applying the lessons learnt over the last few years.”

Tags: Fixed rate mortgage, mortgage, Mortgage loan, interest rates, finance

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Reduction in the number of home loans in Scotland

Thursday, May 27th, 2010

Official figures have shown that the number of home loans granted to people in Scotland experienced a drop in the first three months of this year. The figures, which were released by the Council of Mortgage Lenders, showed that in the first quarter of the year the number of loans that were granted to homebuyers in Scotland fell by one third.

Between January and March of this year the number of home loans that were granted to homebuyers in Scotland came to 9700. Whilst this figure did reflect a drop compared to the final three months of last year the number of loans granted was actually 28 percent higher than in the first quarter of last year.

According to the CML the end of the stamp duty holiday at the end of last year played a big part in the reduced figure due to the increase in activity prior to the end of the stamp duty holiday causing a lull at the start of this year. Many of those that would have otherwise waited until the start of the year to buy a home ended up rushing it through at the end of last year in order to save the money that they would otherwise have to pay on stamp duty.

The total value of the mortgages that were granted to buyers in Scotland in the first quarter of the year came to more than £1 billion. The previous quarter, when the number of home loans issued was higher, the value of the loans came to £1.6 billion.

A spokesperson for the Council of Mortgage Lenders said: “The pace of recovery in Scotland at first sight appears slower than in the rest of the UK, but in fact throughout the current housing cycle, market activity in Scotland has followed that of the whole of the UK very closely, but with a lag of around one quarter.”

Tags: mortgage, Scotland, Mortgage loan, finance, council of mortgage lenders

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Lenders offer mortgages to those with slightly damaged credit

Thursday, May 20th, 2010

Since the onset of the global credit crunch the term ’sub-prime’ has become something of a swearword in the financial industry, with lenders who were once doling out loans to those with bad track records shying away from anyone with even slightly tarnished credit.

The sub-prime mortgage sector has practically died a death over the past two years, and this has left even those with slightly damaged credit struggling to get mortgage finance. However, according to a recent report this could be changing with a couple of lenders now considering ‘almost prime’ and ‘complex prime’ consumers for mortgage loans.

Several years have passed since the financial meltdown began, which was parked across the pond and was partly blamed on subprime lending to those that could not make repayments. However, reports claim that General Electric Co.’s GE Money unit and Investec Plc’s Kensington division are now considering lending to those with slightly damaged credit who cannot get loans through mainstream lenders.

Compared to 2007 mortgage lending had fallen by 60 percent last year, and many lenders had stopped considering those with damaged credit for mortgage loans or any other type of finances. This has led to those with credit problems experiencing difficulties when it comes to getting a mortgage. However, the lenders that are easing up on the rules have said that it will not go back to the way it was in 2007, as they will ensure that customers have better credit histories and can meet repayments.

GE Money said: “‘Subprime’ sends messages out that people are lending money to individuals who can’t repay it. Our customers have clear track records though some may have had minor credit blips.”

Mortgage brokers believe that in the current climate there is a big gap in the market for those that have slightly damaged credit histories, as often these people are not a big risk but can still struggle to get mainstream finance.

Tags: finance, Mortgage loan, credit, Subprime lending, mortgage

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95 percent LTV mortgage from Skipton

Friday, May 14th, 2010

First time buyers have had a difficult time when it comes to raising the money to get onto the property ladder over the past couple of years, and this is because since the onset of the global credit crisis lenders have been demanding much higher deposits than the traditional 5 percent that was once the standard. For many first time buyers the demand of 10 or 15 percent deposit has been too much, leaving them stranded when it comes to realising their dream of homeownership.

However, many first time buyers will be pleased to hear that one High Street building society is launched some new mortgage deals next week, which will include a mortgage of 95 percent Loan to Value, meaning that the buyer will only have to find a deposit of 5 percent if they qualify for the deal.

The mortgage product is being launched by the Skipton Building Society, and will be made available to both existing and new customers who apply directly to the building society. There are subsidiaries that borrowers can apply through but the minimum deposit available through these channels will be 10 percent.

The interest rates that Skipton is going to charge on its 95 percent LTV mortgage will vary based on whether the applicant is an existing customer or a new customer. For existing customers the interest rates for an 85 or 95 percent mortgage will be 4.99 percent to 6.99 percent with a fix of two years. For new customers for the same mortgages the rates are 5.19 percent to 7.19 percent, also fixed for two years.

Skipton said: “When we announced our strong 2009 annual results earlier this year, we said that we hoped to gradually increase both the volume and scope of our lending throughout 2010, and this new range is part of that process.”

Tags: Mortgage loan, mortgage, finance, Skipton

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Stamp duty holiday may have cost first time buyers more than it saved them

Friday, March 26th, 2010

Last year the Labour government announced that it was suspending stamp duty on the purchase of properties up to £175,000 in value. (more…)

Tags: Mortgage loan, first time buyer, Taxation, stamp duty

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Mortgage activity will increase this year

Monday, March 15th, 2010

A prediction with regards to mortgage activity in the UK has been made by the Council of Mortgage Lenders recently, with officials from the agency predicting that 2010 will see the level of mortgage activity in the UK increase. (more…)

Tags: council of mortgage lenders, Mortgage loan, mortgage

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Mortgage availability on the increase

Tuesday, February 23rd, 2010

Over the past couple of years the mortgage industry has been through some tough times, and both consumers and the economy as a whole have been affected by the lack of mortgage finances that has been available. (more…)

Tags: mortgage, Mortgage loan, Super jumbo mortgage, Personal finance

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Are you thinking of selling your home?

Thursday, February 18th, 2010

With house prices having increased over the latter part of this year many people may be considering selling their homes next year, and with interest from buyers on the increase the New Year could prove to be a good time to sell. (more…)

Tags: house sales, Mortgage loan, property market, mortgage

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Lenders pushing more expensive deals

Tuesday, January 19th, 2010

A recent report has suggested that lenders may be pushing their more expensive mortgage deals onto consumers, with deals such as short term fixes, which are being pushed by lenders, proving to be costly for consumers. Many lenders are said to be focussing on pushing deals where rates are fixed for two years or less, and which tend to be the most expensive for consumers. (more…)

Tags: Financial services, Mortgage loan, UK mortgage terminology, mortgage, mortgage broker

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