Mortgages Uncovered

If you haven’t heard of the credit crunch crisis by now, where have you been?  It’s because of the credit crunch crisis that lenders have been ignoring the Bank of England interest rate cuts and raising their interest rates anyway.

However, all is not lost.  If you are in the know and a little bit canny, you can still beat the mortgage gloom and weather out the storm.

Mortgage brokers John Charcol have warned that the situation is deteriorating at an alarmingly fast rate.

If you are canny and quick Read the rest of this entry »

We have warned time and time again that if your mortgage deal is coming to an end, i.e. will be ending in the next four or five months, then you need to start looking as soon as possible because it can take that long to apply, be approved and have the paperwork go through.  No matter what happens, you don’t want to end up on your mortgage company’s standard variable rate for any period of time – as you’ll pay through the nose for it.

Now, John Charcol has joined our chorus in warning people not to rest on their laurels.  Charcol’s Katy Tucker warns: Read the rest of this entry »

Paragon is a specialist lender, dealing mainly with landlords and buy-to-let mortgages only.  It would seem that Paragon is dangerously close to collapsing and it has announced that it is to axe a third of its staff in the coming months.  They have also all but stopped approving any new mortgage loans at all.

Capital Home Loans and Mortgages have announced that they have stopped buy-to-let mortgages completely and withdrawn all their offerings from the market.

Other mortgage lenders which have either made their landlord Read the rest of this entry »

Those who jumped on the buy-to-let bandwagon a little late face the very real possibility of financial ruin.  Many saw the potential earnings and figured buy-to-let seemed an easy way to pave their way to retirement.  Some even remortgaged their own home in order to buy a second house to let.

Unless the landlord is equity-rich, which for many means having bought their buy-to-let house(s) almost a decade ago, there are several factors which are all happening at once and mean many tens of thousands of landlords could find themselves in a sticky situation with negative equity, rent not covering the mortgage or even repossession. Read the rest of this entry »

Boy, I would not want to be a first-time buyer now.  Mind you, I’ve been saying that for the last five years!

Firstly, as regular readers know, mortgage lenders are being incredibly cautious at the moment.  With all the trouble with sub-prime lending (less than perfect credit history) in the US, you really need to have a really good credit rating in order to get a mortgage right now unless you can afford to pay exorbitant interest rates.  For first-time buyers, dependent on your age of course, that could be a problem.  If you’re under twenty five, chances are you might not have had enough time to build up a good credit rating and a ‘clean’ credit rating because you haven’t used credit can be just as bad as a less than perfect record.

However, the problem doesn’t stop there.  If you do get approved Read the rest of this entry »

In our article yesterday, we touched upon the fact that the banks are withdrawing their mortgages because they cannot get sufficient funding from the wholesale markets. The funding is still out there, but the banks and their investors are getting nervous that it may not be there for long, hence their caution. It’s not so much that they’re in a crisis at the moment, it’s more the fear of a crisis that is perpetuating the situation. Read the rest of this entry »

According to an article in the Daily Record today, there are now 40% less mortgages available on the market than there were previously.  We knew the figures must be dropping but even we didn’t realise it was by that much already! Read the rest of this entry »

The European Commission is sticking its nose in again.  Unsurprisingly, they have ‘rules’ on state aid and they think the UK government’s rescue of Northern Rock may have broken them.  Their concern is that Northern Rock might have an unfair advantage over other lenders in the market.  Have they seen the UK mortgage market at the moment??

One of the main sticking points is that the government has guaranteed all deposits with the bank and said it can borrow money from the Treasury until 2011.  The European Commission says that government intervention is not allowed for more than six months.

Denmark has complained about the rescue.  Sour grapes methinks because Northern Rock did have fingers in the Denmark mortgage market but has now announced it will be withdrawing from there.  Although they aren’t the only ones, several Northern Rock competitors from the UK market have also complained about the support given to Northern Rock at this difficult time.

What more do they want?  Northern Rock has put in place several measures to ensure it won’t gain an unfair advantage.  This includes promising not to appear in the top three products for savings in 2008, promised to restrict their share of retail bank deposits (UK 1.5%, Ireland 0.8%) and restrict new mortgages to 2.5%.  They still expect to be making a loss until 2011 as they now owe the Bank of England £24 billion.  Now they know what it feels like to have a mortgage.

The investigation is expected to take four or five months to complete.  Guess it’s keeping someone in a job..

As a customer of Northern Rock, yesterday I received a letter from them thanking me for sticking with them (I’m stuck with them, I’m tied into a five year deal) and to confirm that despite all the recent changes, it’s business as usual as far as they’re concerned (they can’t really change anything on my mortgage, it’s a fixed rate deal so there).  It took them a full page of A4 to tell me that.  There was a lot of waffle, I don’t know why, but that was the general gist of it.  In fact, when I first opened it, I half expected it to tell me that they’d sold my mortgage deal to another lender. Read the rest of this entry »

It’s all over the news today that First Direct has officially withdrawn its mortgages for any new customers.  The bank says it has taken this move because, as many other lenders are saying, they have been inundated with requests for new mortgages and this is a defensive move in the current climate.  It will also enable them to catch up on the backlog. Read the rest of this entry »