Mortgages Uncovered

According to the Daily Telegraph, their research shows that 45 percent of England and Wales postcode areas are showing that house prices are lower now than they were in April last year.

This news comes at the same time as the Halifax states the house prices are down by 2.5 percent in the last month.

Figures from Hometrack emphasise the problem further, suggesting the downturn is widely spread and some experts are now agreeing that it seems there are now many indications that the market is taking a downturn. Read the rest of this entry »

According to an article in the Daily Mail, one in three mortgages are now taken out on an interest free basis and the total number of interest free mortgages has doubled in the last five years.

Now, lenders are nervous about the number of people doing this with no apparent plans to pay the mortgage off.

Originally, interest free mortgages were taken out in conjunction with some sort of payment plan, like an ISA, pension, endowment policy or other investment vehicle, however, people have seen it as a way to get their house on a cheaper payment.  When it comes to the end of the mortgage however, they will still owe as much as the day they took it out. Read the rest of this entry »

According to a study by Equifax, they believe demand for fixed rate mortgages is set to rocket.  If you believe their figures, 41 percent of borrowers will come to the end of their current fixed rate deal this year and 62 per cent of those are hoping to secure another fixed rate deal because of the security it gives. Read the rest of this entry »

Gees, I wouldn’t fancy being a first time buyer right now!  Not only are interest rates higher than they have been for several years but the required deposit has increased substantially too.  The 100 percent mortgage is now non-existent and there are scarcely a handful of 95 percent mortgages available either and they are fast disappearing.

It is true that house prices seem to have dropped recently and may still drop even further but with mortgage lenders wary of lending money to unknown borrowers, it is increasingly difficult to find a mortgage.  Even if you do, if you’re involved in a chain, then the chances are that someone in that chain will be unable to get approval for a mortgage loan. Read the rest of this entry »

At a time when many mortgage lenders are closing their doors to new mortgage applications, Barclays has stepped forward to say not only are they still welcoming new mortgage applications but their processing time has reduced from 11 days down to a mere 5 days because of improvements they have made internally.

Frits Seegers, chief executive of Barclays’ global retail and commercial banking division, told investors yesterday that the bank was well positioned to take advantage of the opportunity.

In the final six months of 2007, Barclays took a whopping 9.3% of all net new mortgage business – compare that with the 4.5% they achieved in the latter half of 2006 and that looks a pretty good growth in market share.  With this recent announcement it will be interesting to see what they can achieve in the second half of 2008.

Almost 75% of mortgage deals that were available on the market last summer have been withdrawn. Whereas there were around 16000 deals available last year, that’s now down to only 4100 and dropping fast. Regular readers of this site will know that almost every day we’re reporting another lender or lenders withdrawing products or refusing applications because of the lack of funds available. Read the rest of this entry »

As we suspected, the Bank of England cut its interest rates still further from 5.25 to just 5 percent last Thursday, however, again as we thought, lenders failed to pass this onto their borrowers except in the cases of tracker or discount mortgage deals where the reduction was written into the mortgage contract.

Lenders were accused of cashing in on the crisis, but they say it’s because of unprecedented demand from consumers combined with a lack of funding available in the market.  Lenders are wary following the crisis in American with sub prime borrowing.

Unfortunately, consumers have been angered even further as both Alliance & Leicester and the Nationwide even went so far as to increase their mortgage rates in the same week as the Bank of England reduced them.  For Alliance & Leicester it was the second increase in a week and for the Nationwide it is its sixth increase so far this year.

However, I note that the savings interest rates have been cut quickly enough!  Banks and building societies insist that the cost of borrowing money on the money markets is costing them around 8 percent so they have to pass that cost onto consumers – it seems the cost to them for keeping consumers savings is ever-decreasing though.  Gits!

Reserve your place now/avoid the standard variable rate – we cannot stress this enough and will keep banging on about it, so apologies to regular readers of this site.  If you have six months or less left on your mortgage deal, start looking now.  You can reserve a mortgage application three to four months in advance if you find the right deal quickly.  Act fast when you find it because lenders can withdraw a product at a days notice

Check your credit file – don’t assume it’s clean, there may have been a mistake.  If you missed a single payment, make sure you put a comment in the file explaining why.  Leave no stone unturned

Apply online – if its an option, apply online.  Online applications generally get processed quickly

Self employed / self cert – if you’re self employed, make sure you have at least one year’s accounts ready.  If you’ve been trading for a minimum of 18 months, you should be ok.  Otherwise, you’ll have to go down the more expensive self cert route

Deposit – get as much deposit together as you can.  In today’s market, if you can afford to add your savings to your deposit, it might be best to do so although of course, you should leave enough for emergencies

Explore all your options – if you’re panicking because your credit score isn’t perfect, then make sure you use a mortgage broker.  They might be able to help so you aren’t classed as sub prime or have access to exclusive deals

It’s being called the ‘mortgage freeze’.  Banks and building societies are severely tightening their lending criteria.  Sub prime borrowers, i.e. those with a less than perfect credit history, will struggle.

Reportedly, Britain’s largest building society, the Nationwide, has turned down a mortgage application from an existing customer (yes, existing, not even a new applicant) who had 50% equity in a £1.4 million home with a six-figure income and a squeaky clean credit history because Read the rest of this entry »

This is the question on everybody’s lips.  Experts predict the big crash is coming and then other experts say it won’t – it’s difficult to know what to believe and nobody can know for sure.

After a few years of steady house price increases, the market certainly does appear to be cooling.  In the last couple of months, there have been reports from the Land Registry that house prices have shown monthly increased of around 0.4% yet other sources, such as Home Track have said house prices have dipped by 0.1%.  The figures all depend on how the trackers put the figures together.

One figure we may be able to rely on is the Bank of England mortgage approval figures.  These show that the number of mortgage approvals has dropped to their lowest level in two years. Read the rest of this entry »