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Mortgage lending drops again by another 13%

[ Posted February 26th, 2011 ]

As if the fact that the mortgage rates are already threatening to go up placing many people with tracker mortgages on the possible cliff of disaster, now it looks as if mortgage lending criteria are stiffening again as lending opportunities revealed to dropping by an additional 13% at the close of January.  It was already revealed last week that for the first time in three quarters, house prices took a nose dive during the fourth quarter of 2009, but now the news that lending is down again may be just the bad news that the housing market has to take before it is considered depressed officially again.

According to figures released by the Council of Mortgage Lenders (CML), during January only £9.2 billion was advanced to consumers during the month compared to December when £10.6 was given out.  Even worse, last month’s figures were at the lowest level of mortgage lending that has been seen since last February.  While the weather is partially being blamed for the dip as it kept many people inside on days when they otherwise may have been scouting for a new home or meeting with the bank, it mostly reflects the market instability that already has many people teetering on edge.

It is no secret that the high deposits that many lenders are now asking for that can range anywhere from 10%-40% of the house value is impacting many buyers decisions to purchase a home compounded with the ever looming threat of an increase in the mortgage rate attached to the home.  Add unto to this the fact that many expect the property market to stall within the next six months and the economy to perhaps fall into a double dip recession and there is plenty of reasons why the average lending advances are falling.

Bank of England found that only 41,000 mortgages were approved during last month which was aligned with the figure for the previous month of December as well which was the lowest lending figures that have been seen since March of 2009.  According to the CML, even if the mortgage demand were to start to pick up due to the mortgage rates and the amount that banks will have to pay out to public support schemes in return for their bailouts it is unlikely that there will be a large change in how much was actually received.

Mum and Dad the prime loan choice for first time home buyers

[ Posted February 24th, 2011 ]

With the upturn in mortgage rates and the higher credit lending criteria set before many first time home buyers instead of accepting defeat a large amount of young adults are now looking towards mum and dad for aid according to information compiled by housing minister Grant Shapps at a meeting that was held on Tuesday about the mortgage industry.  Also presented were many other ideas about how first time buyers can start to get their hands into the mortgage market given that they are the only hope for the stalling housing market.

The problem of first time buyers dwindling due to the heightened mortgage rates and lack of lending is problematic both for the housing industry and for lenders because the fewer people there are to borrow the fewer the profits for the banking industry which they earn from the interest rate kickback which prevents the banking industry from starting to stabilize as well.  With most people just holding onto their current mortgages by a string the mortgage industry is barely being supported by anyone outside of potential first time buyers, which makes the issue a fairly large one to tackle.

One interesting point brought out at the summit was the fact that with many people  under the belief that the lending agents will refuse pretty much any mortgage request, people simply are not bothering to apply which means that there are many potential buyers that have not yet attempted to purchase a home.  While it is true that it is harder to secure a mortgage then it was in the past, for those who can afford a 10% deposit there are some of the best mortgage rates on the market open to them if they simply apply.

Ten percent may sound like a daunting number, but compared to a few months ago when the deposits required for first time buyers were closer to 40% this is an improvement.  The ending result of the conference was the decision that creativity needs to be used both within the property market and within the banking industries to let potential buyers know that there opportunities out there for them so that they will stop in and apply.  Plus, as stated overall at the summit, for those with the option, mum and dad are a great way to get the initial capital you need and an overall boost to the credit profile.

Commercial mortgage rates looking great for London office development firms

[ Posted February 18th, 2011 ]

Many construction firms and developers will be pleased to hear that as 2011 opens the commercial property market within London is starting to perform very well with commercial mortgage rates staying stable and the pricing for the office market starting to increase.

During the third quarter of 2010 RICS (Royal Institution of Chartered Surveyors) commercial property market survey revealed that over the quarter the amount of London office space that was available for purchase or hire fell dramatically.  The effect of the availability of office space helped to boost the general prices for office space making the development of construction of new office areas a profitable venture once again.

Therefore, it is only reasonable to believe that in the midst of reasonable commercial mortgage lending and a demand or new offices that construction firms will soon be back at work for developers that are taking advantage of the need for more offices in London.

Chief Economist for the RICS, Simon Rubinsohn, stated that prime London offices have always helped to hold up the property market and they will continue to be one of the best development markets as office development always seems to bounce back first.  He added that every week new projects are being spearheaded within London, especially when compared with other development outside of the capital city in the UK which will help to boost the construction and property development sector greatly.

Also noted in the Global Commercial Property Survey was the fact that over the last quarter of 2010 there was strong commercial growth and reasonable mortgage rates outside of the UK in countries such as Asia and Latin America.  It added that the commercial sectors of these countries have demonstrated great buoyancy that is being reflected within the London market and is something that property investors would do good to note.

New assistance to help first time buyers combat current mortgage rates

[ Posted February 16th, 2011 ]

Over the last few years as housing prices jumped up and down, the economy entered a recession, and mortgage rates soared out of control only to fall back again, first time home buyers have had a hard road ahead of them.  Add in the fact that most lending agents heightened their criteria for lending either turning down most applicants or requiring unrealistic deposits and the housing market became almost non-negotiable for most young first time home owners.  However, there are now new programs in place that may help alleviate the situation a bit.

The average house price in the UK is now sitting at around £150,000, which for first time home owners would require a deposit of at least £30,000 if not more which most cannot afford.  Grant Schapps the housing minister called a meeting to discuss this problem with lenders, leading housing community authorities, and home builders to discuss what could be done to help turn around the property market starting with the first time buyers who before the recession may have been in a position to help boost the sales within the property market.

The Council of Mortgage Lenders stated in data that with an increase in mortgage rates, credit worthy criteria, and large deposits it is now almost impossible to get a mortgage.  Previous to the housing crisis, a deposit of about £13,000 was considered normal which is well over what is considered acceptable now.  In response, parents have been hard hit up for the capital leading groups such as Lloyds TSB to launch a new type of mortgage in which the bank takes on the role of the parents in the mortgage equation.

The idea of the Lend A Hand mortgages are to allow borrows to get a mortgage that only has a 5% deposit attached to it with many other lenders offering the same types of deals although the best mortgage rates may not be as great. The program requires that a family member help secure the mortgage based on their own personal assets with a benefit given to the voluntary helper with a 3.75% savings rates on any assets that are used to secure the mortgage.

January saw 1,600 new mortgage deals

[ Posted February 12th, 2011 ]

According to statistics from Mortgage Brain, consumers are not completely shying away from the fear of rising mortgage rates a there were 1,600 additional mortgages signed over January as compared to the year on year average.  At the moment the online mortgage website estimates there are about 10,000 mortgage deals completed.  The news conflicts economists’ worries and complaints that the banks in the UK have reduced their lending and tightened the criteria they use when making a mortgage lending decision.  Over last year there were a total of about 5,200 new mortgage deals completed.

Despite concern about an increase in the VAT and mortgage interest rates hikes in January there were 820 new mortgages opened bringing the number to date from the start of the year to about 2,000.  However, people are wary about their mortgages choosing fixed mortgages which showed a 17% increase in the first month of the year alone.  Fittingly, variable interest deals have sharply declined standing at only a thousand with only 11 mortgages signed by UK banks over the course of January as home owners are wary about seeing their monthly mortgage payments jump with the predicted interest hike.

This is good news for those in the market for a new home as it seems that UK banks are offering mortgages to qualified candidates despite the negative press surrounding the banking system with many people claiming that banks are not offering lending.  It is also good news for those concerned that mortgage rates will destroy the housing market as it seems that consumers are smartly proceeding with mortgages but instead carefully choosing to secure a fixed mortgage over a variable interest mortgage.  Despite this fact, all potential new homeowners should carefully look over their finances before choosing to secure a mortgage in this delicate market

Property experts nervous about new property investment fund proposal

[ Posted February 9th, 2011 ]

With so many first time buyers afraid to take out a mortgage due to the credit crunch and lending shortage that is leaving many in fear of getting turned down for fixed mortgages property brokers have invented a new type of investment fund that invites first time buyers to get their hands on the rungs o the ladder by paying only a 5% deposit without the need for a mortgage at all.  The group was launched by the Mill Group and offers first time buyers the chance to invest their funds into buyer deals at up to 95% of the total LTV, but industry pundits are sceptical about the idea.

The way it works is those interested in buying a home must purchase 5% of the cost of the home and then investors will put up the costs o the 95% remaining portion without involving an actual mortgage lender.  In exchange, the first time buyer will pay a monthly charge on their investment and are expected to pay out the remaining total over the next five or so years with a standard interest mortgage rate attached on the loan.  At this point if they cannot afford to buy out the remaining investment they can secure a mortgage from a lender hitched on the idea that creditors will be offering more loans down the line as the economy stabilizes.

However, Personal Touch Financial Services sales director Dev Malle comments that although the new scheme is unique, it will not offer the same type of protection that any FSA mortgage would.  He added that there is concern that terms, payments, mortgage rates, and interest will fluctuate at terms that are convenient to the investor and not the first time buyer leaving plenty of room for problems in an agreement that is not regulated by the FSA.

The obvious problems are of course what would happen if a borrower fell behind in payments and if it would simply be easier for borrowers to wait five years to purchase a home instead saving money to put forth on their own mortgage deposit without the investment risk.

How to secure the best mortgage rate without rejection

[ Posted February 6th, 2011 ]

If you are in the housing market trying to purchase a home for the first time then you are likely are looking at properties and hoping that you will get approved for a great mortgage rate from a lending agent.  Even though you may be love with the property, sure that you can afford the home, and have spent hours working on the application form so that nothing can go wrong there are many factors that may be out of your control that can cause you to lose your chance at the perfect home.

In fact, brokers estimate that about half of all people who apply for the best mortgage rates are rejected and instead forced to pay high deposits and poor rates if they take on the mortgage offered in its place by the bank.  While banks will not offer up an exact figure for mortgage approval, it is estimated by many property public interest groups that bank financing is only offered 40% of the time.  Even worse, most of the time when you get rejected a bank places the rejection in your credit profile which gives other banking institutes the green light to reject you before even looking over your profile.

Therefore, you need to make sure that your application goes through the first time you apply if you want the best mortgage rates which involves following a set series of steps.  First off, you need to look over your credit report to make sure that there are no mistakes on it as well as any old cards or loans that are no longer used that you need to cancel and get off your record.

Next you need to take a close look at your spending, because instead of looking at your net salary most lenders will now look at your salary once your bills are paid and they will take a close look at your bank statement.  If you need a few months to clean up your statement it is best to wait.  Finally, check into the many fee-free brokers that are available to help you negotiate through your application so that easy mistakes such as not offering a landline number or overtime payments are not overlooked so that you can rest assured that your application will go through properly.

Increase in mortgage rates may lead many homeowners into foreclosure

[ Posted February 4th, 2011 ]

Amidst the threat of a double dip recession and a sharp rise in mortgage rates is the fear that many people who purchased their homes with low interest rates attached will soon face possible foreclosure given the fact that interest rates are slated to sharply increase over the next few months.  For those that are unable to alter their variable mortgage rates the change in interest rates attached to mortgages may mean that their monthly payments will soon skyrocket out of control causing the market to drop once again for the second time in just a few years.

Those who should be concerned are those who acquired their mortgage in the last two years at low rates and are not able to switch to fixed mortgages due to the tightening of the lending criteria.  Heather Keats a prominent member of a debt charity stated that those who were lucky enough to purchase their homes with the rates were down are now teetering on the very dangerous edge of an abyss and went on to say her charity, Community Money Advice, expects to have a large problem on their hands due to the fact that many people are not taking appropriate proactive action.

Keats continued to explain that the situation is looking even worse than it did at first now due to a combination of factors that are really tightening consumers budgets such as the continual rise in inflation, the public sector redundancies, and the most recent increase in the VAT.  Even worse, due to overtime bans and wage freezes many people are now getting paid wages that are closer to what the average was in 2005, half a decade ago, even though the inflation rate has skyrocketed since then.

Therefore, homeowners should take the time to look over their mortgage rates now according to financial experts instead of idly sitting by so that they are prepared for what may be coming.  Those who borrowed at a loan-to value are recommended to look into fixed mortgages and look into their options before foreclosure is the only option left.  Those that cannot get approved are recommended to consider downgrading before they lose their investment in the property all together or consider letting out a few rooms in their home if possible. aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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