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New mortgage rates announced by Chelsea Building Society

[ Posted June 29th, 2011 ]

The Chelsea Building Society has announced that it will reduce its mortgage rates making it a prime location for those that are looking for a mortgage from one of the primary high street lenders.  As part of the new mortgage products that they offer their five year fixed rate mortgage has also been reduced in price which is a popular choice among homeowners with the threat of the increased bank interest rate.  By signing into a fixed rate homeowners will not have to worry about the future adjustment of the interest rate.

The five year fixed mortgages are now set at a low 3.89% with a 60% LTV value and a two year fixed rate that is set at just under 2.9% with an attached 60%LTV.  Those that are still considering the option of a tracker option will also find the long loan terms are available attached to 80% LTVs which may be the better option for those who need a small deposit.  However, there is risk involved with this type of mortgage given the fact that the increase in the bank interest rate is unknown as of yet and can make a large different in monthly payments for those who hold a mortgage in the future.

The Direct Mortgage Manager for Chelsea Building Society Chris Smith stated that the group is always looking for new ways to introduce better mortgage rates to their product offerings and they are hopeful of the fact that they will be able to offer attractive packages to customers with the new rates.  He added that the mortgage group understands the fact that not everybody is in the same financial situation when it comes to purchasing a home and they aim to offer something for everyone.

Smith explained that some customers like the idea of a fixed mortgage because then they have the stability of known monthly rates and the stability that comes with a fixed budget.  However, he added that for those who need lower deposits the variable rate tracker loans may be a better choice so that they can access mortgage products without giving up on their dream of owning a home.  The new rates are offered for all home loans up to £1,000,000 and for those that extend above £1,000,000 for loans with a 60% LTV with individual consultation.

Barclays nabs two executives from the bankrupt Lehman Brothers

[ Posted June 28th, 2011 ]

In an effort to help rebuild their commercial mortgage sector, Barclays Capital decided to hire two executives from the now bankrupt Lehman Brothers to help expand its operations.  The two new executive hires will be handed the task of helping to expand its securities operations within the commercial mortgage sector.  Outside of Lehmans, the two new hires also worked with G2 real estate until they joined Lehman’s until its bankruptcy in 2008.  They include Spencer Kagan and Larry Kravetz who are both skilled with the mortgage market.

In their new roles working with commercial mortgage rates at Barclays Kravetz will be placed in charged as the managing director of CMBS finance with the task of reporting to the head of products trading Tom Hamilton while Kagan will be put in charge of the CMBS credit as managing director and will report back to Kravetz creating a nice circle of familiarity for two old work chums.  Despite the fact that the Lehman’s bankruptcy was the largest bankruptcy in the American mortgage market, Barclay’s does not seem concerned about hiring the two instead speaking of their expertise as a well time acquisition.

Head of the scrutinized products trading department, Tom Hamilton whom the duo will report to commented that together they bring over forty years of commercial mortgage experience to Barclays which should be instrumental  in helping the London based Barclays in creating and developing a new origination business in CMBS.  He continued to expand on the thought by stating that their expertise will be complementary to their already high market sales and will contribute as well to their research and trading franchise as Barclay’s continues to expand the amount of products that they have at their disposal to offer to potential real estate clients.

As part of G2 Kravetz was a founding member and managing partner in charge of the G2 Investment Group prior of which he spent 15 years at Lehmans until its bankruptcy working with underwriting, securitization, and the firm’s commercial loans.  Kagan was also a founder at G2 Real Estate prior to which he worked ten years for Lehmans as the head of large loan credit and managing director.  In addition, before he joined with Lehman Brothers Kagan also worked as the head of the Standard & Poor’s CMBS ratings group.

Confidence in housing market reflecting in house prices

[ Posted June 21st, 2011 ]

After floundering for two years, the housing market is starting to once again improve as most Britons seem to be gaining confidence in it.  A new survey conducted by Halifax, the high street bank, revealed that one third of Britons expects to see house prices continue to increase.  About 32% of those included in the survey felt that property values would steadily rise over the next year compared to 26% who predicted that they would remain the same and another 23% who felt that house prices will actually start to fall over the next year.

Most people were more positive about house prices in the area where they live locally with 35% stating that they would see their local housing prices increase and only 18% reporting that they would see their local area fall in price.  However, whether the survey respondents thought the housing market would increase or decrease most people did not expect to see large changes in housing prices or the mortgage rate with an overwhelming amount of 57% stating that they will expect to see only falls or rises by 5%.  Only 24% of those in the survey predicted they would see larger changes.

The survey also showed that people seem split in regards to what they think of the housing market, as half thought the next three months would be a good time to purchase a home and another half stating that now would be a good time to sell property.  However, with the threat of the interest rate affecting mortgage rates and the tough lending criteria still in place for many candidates consumer confidence is still low enough that most people are delaying purchasing a new home keeping the overall number of housing transactions low.

Compounding matters is the fact that 26% believed their finances would get worse over the next quarter and another 54% that stated they did not think they would get any better.  Another 52% stated that worries over job redundancy would prevent them from purchasing a new home or taking advantage of excellent buy to let mortgage rates to make a solid investment in the housing market.  An additional 225 stated that the threat of the interest rates increasing prevented them from making the move to sign into a new mortgage for the time being.

Fixed mortgages at a six-month low

[ Posted June 20th, 2011 ]

Increased competition within the mortgage market in terms of lending has le to homeowners rushing in to take advantage of the best mortgage rates before the interest rate rises in the future according to new figures.  The Bank of England is expected to increase the base increase rate sometime in the next six months leading to a rash of people attempting to switch their mortgages to a fixed mortgage before the rate hike affects their tracker mortgage monthly payments.  Estimates predict that a simple .5%-1% increase in the interest rate could lead to monthly mortgage payments jumping up between 70-100 pounds for the average home.

The average cost of a fixed mortgage loan is down to 4.41% compared to the 4.5% of May which marks the lowest it has been yet since the year started.  Interest attached to a five year mortgage has also dropped down from 5.6% to 5.41% according to the mortgage rates tracker group Moneyfacts.  The financial agent stated that one reason the mortgage rates have continued to drop is because of a decrease in swap rates which many of the new deals offered by the banks are based.

At the moment, most analysts are predicting that the Bank of England’s Monetary Policy Committee will not increase the base rate until Q4 of this year, but given the fact that the threat still looms many are taking advantage of the lapse and low mortgage rates to sign into fixed mortgagesInterestingly enough, even with the threat there are also many homeowners fixing their borrowing costs and fixed rate deals are increasing the competition in a time when most would predict that the housing market might suffer another fall. 

This is partially due to the fact that many lenders have dropped their interest rates on fixed mortgages to draw consumers to them including mortgage giants NatWest, Halifax, Lloyds TSB, and Nationwide.  Also aiding in the rise of fixed mortgages is the fact that there are now more mortgages available that require small deposits with 31 loans on the marketplace for those who can only put down 5% on their deposit which is an increase of seven since the start of the year and the highest number of low deposit loans seen since December of 2008.  Those who can afford 10% deposits have also seen the number of options increase from 199 up to 244.

Co-Operative Bank introduces new mortgage rate packages

[ Posted June 13th, 2011 ]

Those looking for a great mortgage rate to help secure a new home mortgage under may want to consider taking a look at the new products that Co-Operative Bank has added to the mortgage market this week.  With help from its lending sister company, Platform, the banking company announced this week that they will be able to reduce the rates attached to many of their mortgage packages that are currently on the market.  This is good news for homebuyers who may be nervous about signing into a long term mortgage contract in the current economic environment.

The benefits are not just for potential home owners; however, as the Co-Operative Bank also announced that it will slash many of the buy to let mortgage rates in their mortgage lending product range.  At the moment, many of the buy to let homes are available to lenders at a low 75% loan to value range making the idea of investing in property even more enticing.  Add this to the fact that generation rent is helping to increase the profitability of buy to let mortgages and it may be something to take a second look at if you have the money to do so.

The new deals became available on June 7th and will continue to be available for an undisclosed amount of time so those who want to take advantage of the lower rates will find it in their best interest to start shopping now.  Included in the packed are fixed mortgages set for two years for both home owners and those looking at buy to let mortgage products with a low arrangement offer of only £950 making the option affordable to those who can afford the LTV deposit on the potential homes.

Business development director, Lee Gladwell, of Platform stated that the company is committed to offer brokers a full range of products to offer to their clients that are set to help reduce the mortgage rates to make investing or purchasing a home more affordable and practical.   Gladwell added that the decreased attached fees should also help demonstrate the company’s commitment to making mortgages once again affordable.  Gladwell is a Financial Services Authority regulated mortgage company that has been able to secure a total of around 165,000 mortgage deals that cumulatively are valued to be worth well over £16 billion.

Market experts weigh in on potential increase in mortgage rate

[ Posted June 10th, 2011 ]

Mortgage market website group Mortgage Introducer contacted many known mortgage experts in the mortgage market to gather a response on what the expected decision will be on the upcoming vote of the Bank of England’s Monetary Policy Committee in terms of the base rate.  The decision will be important for many homeowners with mortgages and those who are considering taking on a mortgage since the bank base rate will influence the potential rise in the mortgage rate changing the market outlook.  Thus, a great deal of industry analysts are nervously awaiting the decision as well as those with tracker mortgages that will change based on the base rate decision.

The market professionals seemed to reach a general consensus among each other as shown by the survey that the MPC will not yet change the interest rates which means that there may be a brief period of respite.  This means that right now may be the best time to find the best mortgage rates as all of the professionals still expected to see interest rates increase; the disparity among them seemed to come when asked when.  Most professionals had a different idea of when the BoE is actually going o raise the base interest rate.

Stanley Research announced in May that they expected to see the BoE increase the base rate come this August if wage growth starts to pick up over the next two months.  Analysts from this firm felt that interest rates would rise to 1% by the close of this year and up to another 2% by the close of 2012 which could change fluctuation in the monthly payments for those who do not own fixed mortgages that could amount to more than seventy pounds or so every month eating into household budgets quickly.

However, opinions differed with private broker Edward Checkley of Private Finance stating that he believes that the rate will stay down for now, but will increase by about a quarter by the end of the year and then by the end of 2012 to the same intimidating 2%.  He continued to say however that it is hard to know when interest rates will rise for certain so at the moment flexible tracker mortgages are still the best choice for those considering a home mortgage although the market is flooded with people switching hastily to fixed mortgages to avoid being trapped in a high mortgage rate.

Study finds people do not expect to ever own home

[ Posted June 6th, 2011 ]

A new study conducted by the National Centre for Social Research has discovered that about 66% o all prospective mortgage owners do not expect to ever fully own their property.  An additional half of the people surveyed between the ages of 20 and 45 admitted that they believed that soon Britain would follow the overall European trend of renting instead of owning a home.  Experts added that the latest research and the increase in mortgage rates coupled with poor bank lending practices will force Britain to become a rental based property market.

Those included in the survey also felt that poor lending practices were the major reason for home rentals increasing in normalcy due to the fact that their own personal perception was that banks were not willing to work with potential lenders.  A large majority of buyers (about 66%) stated that they were avoiding attempting to purchase a home due to the anxiety and stress that securing a mortgage would bring with it.  However, despite this fact three out of every four people surveyed still felt that they would like to purchase a home down the line if they could secure the right fixed mortgages or other affordable mortgage options to make it possible.

The survey also revealed that 84% of all first time buyers felt that banks were not willing to loan them money and were looking for any excuse possible to turn them down while another 92% stated that first time buyers would have a hard time securing a mortgage with a large percentage of these also stating that it is virtually impossible for first time home buyers to secure a great mortgage or any mortgage at all.  One of the largest barriers was not actually the mortgage rates, but the high deposits that are required for most first time buyers.

Alison Blackwell, one of the agents responsible for compiling the survey results, stated that the new generation of renters could cause many economic problems down the line because with less home first time buyers able to afford a home construction will be slowed down across the UK.  In turn she stated this will stall the housing market even further and widen the gap that can be seen between those wealthy enough to buy a home and those who are not.

UK rising house prices causing problems

[ Posted June 4th, 2011 ]

While the old saying denotes that the castle of an Englishman is their home, the UK has a problem with house price inflation because house prices have risen exponentially year over year up until the recession making the housing market prime for those who made their purchases at the right time but horrible for those who were not able to secure the best mortgage rates. As the housing prices continued to increase people got used to spending and borrowing well beyond their means, a behavior that single handedly caught up with Britain causing a recession in all definitions of the word.

Most people are quick to blame the recession and the banks for the poor housing market that exists now, but most people do not take into account the fact that the UK had the second to largest LTV ratio of any developed country before the credit crunch and ensuing financial crisis occurred.  It should have come as little surprise that first time buyers with 125% mortgages found themselves with negative equity when house prices crashed, but it should come as a surprise that we considered this unsafe form of lending to occur.

Now, the nation is faced with thousands of people rushing to get fixed mortgages to avoid rising mortgage rates again and thousands of other people homeless that lost their homes during the recession.  The even worse news is that as house prices start to edge back up it is expected that many more people will lose their homes due to increased inability to pay for their monthly mortgages.  In other words, a great deal of those who lost equity has already lost their homes, and those who were able to hold on are still at risk of losing their room.

Over the past forty years four housing bubbles have burst in the UK which have all led to economic problems but it seems that the housing market and the general lending society still has not learned its lesson.  Now experts are predicting that the next generation will be composed almost solely of renters which will change the socio-economic nature of the county and the housing market once again.  It seems that our addiction with house prices and mortgage rates will catch up as only the super wealthy will actually be able to afford homes, which used to simply be a rite of passage.

 
 
 
 
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