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Post office drops buy to let mortgages

[ Posted September 29th, 2011 ]

Major lending agent the Post Office announced this week that it has dropped its entire competitive buy to let mortgage rates and will no longer offer any related products to customers.  The move was made in an effort to allow the company to focus for the next period on helping out movers, remortgage, and first time buyers. 

While this may be good news for this group of mortgage consumers, there will be some investors that will miss the two, three, and five year buy to let products offered at an 80% LTV rate. Although investors will be missing out, first time buyers and those in need of a remortgage will want to check out the companies new best mortgage rates as they will now be able to reduce their overall rates on residential mortgages by a full 1.24% which will take its five year fixed mortgage package down to 5%. 

However, the rate will still not be affordable for most given the fact that there is still an LTV of 90% attached to it, so most likely only those in need of a remortgaged product will be able to find this deal helpful. Outside of this package, which the Post Office is heavily promoting as its best deal, the lending agent has also dropped down its three year fixed mortgages to 4.75%, at the same 90% LTV with an attached lending fee of £995. 

The five year mortgage also has an attached lending fee of £995, but the rate drop is set at 4.99% which is highly desirable when compared to the original 6.15% mortgage rate that it was set at before the announcement. Head of mortgages for Post Office, Mike Cook, stated that most of the five year fixed mortgage rates that the company has advertised are only going to be available for borrowers that can afford to make a large deposit, which will cut out many that are first time home buyers or those seeking to move to a larger home.

 He added that for those that can afford a 10% deposit, their new deals offer a great value that will be fixed for five years which should help eliminate any fears that the products will become unaffordable if the base rate increases in the future, since they will be locked in to the low rate.

Loan restrictions not easing with dropping mortgage rates

[ Posted September 27th, 2011 ]

Every month, new research is published on mortgage criteria and lending practices within the UK with the same conclusion drawn: despite the drop in mortgage rates the restrictions surrounding securing a mortgage are too strict to allow most potential home owners to actually get a food on the housing market. 

As a result, many people that would normally be able to take advantage of the great deals on the market find themselves renting because they cannot find a lender with a low enough deposit or meet the credit criteria for a mortgage. Most experts agree that lenders are now using lending criteria that is too hard or strict for the average consumer to meet, therefore, despite the best mortgage rates, lenders are being blamed for holding back the mortgage market and causing the housing market to fall as a lack of lenders means a lack of buyers. 

The more people who are forced into renting the lower the house prices will continue to fall which will in turn depress the housing market even more than it already is.  Given the fact the housing market has been falling steadily since 2007, the future of owning a home in the UK is starting to look a bit grayer.

New figures show that less than half of all the new mortgages that were secured in August held a LTV that was under 75%, and that only 46% of all of the mortgage rates that are being offered by banks at low rates actually will allow for a deposit of 25% or less.  Even though an LTV of 75% may seem low when compared to some of the larger requirements, on an average £150,000 this total works out to be £37,500, which is too high for the average person to be able to afford.

Michael Jones of the National Association of Estate Agents stated that the Financial Services Association needs to step in and ease the strict lending restrictions that are stopping first time home buyers from getting onto the market if the UK is to ever see the housing market make a significant recovery. 

This is due to the fact that a large majority of all housing activity in the mortgage market over the last year has been from remortgages and not first time buyers, which has caused the buying and selling markets to stall.

Leeds offering new buy to let mortgage rates

[ Posted September 26th, 2011 ]

Leeds Building Society announced this week that they now have a new set of five year fixed buy to let mortgage rates that are attached to a very comfortable 70% LTV, making them a great opportunity for savvy property investors.  The new product is set at 4.99% for five years and is attached to a £1,299 fixed fee and is currently the lowest rate in the lending marketplace if you take the low deposit rates into consideration. 

Also attractive is the fact that as much as 10% of capital replacements can be made each year of the five year term without any early payment penalties. Leeds Building Society’s Sales and Marketing Director Kim Rebecchi stated that the company believes that now is a great time for investors to look at getting the best fixed mortgages that are set at a low price while the market is still depressed and before the Bank of England increases the interest rate.

 She also added that the society is aimed at attracting interest from landlords that want to secure a great rate and still be able to fix their monthly mortgage payments so that they do not have to worry about the affordability of an investment.

First time landlords can also benefit from the best mortgage rates that the Leeds is now offering those who are looking to get in on the current investment opportunity as they also have a fees assisted version of the same product that comes with free in house legal services for all remortgages and a free valuation that is valued at a total worth of £335.  This should help first time investors take care of the upfront costs of getting into the landlord business.

Given the fact that renting is now much more popular than purchasing, the buy to let market looks very desirable for those with the funds to invest because there is a great deal of money to be made as a landlord with the high rents that they can demand.  As competition continues to increase between tenants the rents will continue to rise making the average yields of landlords higher at a time when property and house prices are actually lower.  Therefore, there has never been a better time for landlords to expand or start an investment portfolio.

Abbey for Intermediaries reduced their fixed mortgage fees

[ Posted September 22nd, 2011 ]

Abbey for Intermediaries announced this week that they have dropped their fixed mortgages by about 1.10% by reducing the amount of fees associated with each of the mortgage products and offering lower mortgage rates in general on the products.  This is just one of the many announcements this week that has seen mortgage terms become more enticing to home buyers that have not yet taken advantage of the rock bottom rates available from some of the top lending agents in the UK as the banks compete against each other for business.

The largest reduction made by Abbey for Intermediaries was on their five year fixed mortgages that are set at an 85% LTV making them an affordable choice for many home owners.  The rate was reduced by a total of .94% with no attached fees to add to the final price.  Also enticing to those who need a bit more help with their deposit is a reduction of .85% on their two year fixed mortgage product that has a low 90% loan to value attached to it to help out first time home buyers who may not have a large savings account.

Managing director for Abbey Intermediaries Miguel Sard stated that they are happy to announce to potential home owners that they now can offer them some of the best mortgage rates on the lending market.  Sard added that they can now offer rate cuts on their products that are as large as 1.10% on some of their products and that they have seen the largest demand on fixed rate mortgage products which is where much of the cuts were made.  He continued to explain that he expects many borrowers will enjoy the peace of mind that the banking society is able to offer them.

Landlords building their portfolios with lowered buy to let mortgage rates

[ Posted September 22nd, 2011 ]

Take advantage of the best mortgage rates

[ Posted September 22nd, 2011 ]

Those who are thinking about buying a home will want to act fast while the market is still depressed given the fact that banks are pulling out every trick in the hopes of luring potential home buyers into their doors which include offering the best mortgage rates that have been seen in years.  Among the many great rates that are out there waiting to be taken advantage of are great rates on ten year mortgage terms which is significant given the fact that getting locked into a ten year term will protect you from the eventual interest rate hike.

In the past fixed mortgages that were set at below five percent for just five years were considered to be a great deal, so with this in mind imagine what kind of deal a 3.99% rate on a ten year fixed mortgage would be.  However, now you do not have to imagine as many of the top leading lenders are actually offering this rate or a rate close to it for ten year terms.  In fact, there are five lending societies that have low rates on their ten year mortgage rates including Co-operative, Leeds building society, Britannia, Chelsea building society, and Yorkshire building society.

The lowest and best mortgage rates on ten year fixed mortgage terms come from Chelsea building society which is offering the deal with an associated mortgage fee of £1,495, but it also has an attached LTV of 70% which may be too steep for some people to afford.  For those people the deals from the other lenders may be a better option as they come in between 5.99% and 5.29% and range in LTV values of 75% to 80% which may be affordable for those who want to take advantage of it.

Also enticing is the Skipton building society offer that is set at 5.85% with a low 85% loan to value and no extra fees built into it.  Head of products for the building society Kris Brewster stated that the swap rates are possibly as low as they have ever been, or at least very close.  He added that this has made it possible for Skipton to offer such a cost effective offer for those that are seeking out a great mortgage to make purchasing a new home an affordable option even in the current economic climate.

Houses prices drop by a stunning £65 per day during the month of August

[ Posted September 16th, 2011 ]

For those who thought that mortgage rates and house prices could not fall any lower than they already have, August proved them wrong as the rates continue to fall due to the competitive banking industry and house prices fell by a stunning £65 per day on average during the same month.  This represents a 1.2% fall since last April according to a new report from Britain’s primary mortgage lender Halifax.  The drop left the new average house price at £161,700 which is shocking compared to the slight gains that the housing market managed to make over the last two months.

Not only is this drop stunning for the six month period, but when compared to the levels seen just a year ago it is a drastic 2.6% or £6,600 less meaning that home owners may be losing equity instead of actually coming out ahead in today’s mortgage market.  While the news of calling home prices may make landlords happy that are shopping for great buy to let mortgage rates and great investments, for the average home owner with established equity this is not a great place to be sitting.  This is especially true if they are considering remortgaging their home.

Chief economist for Halifax, Martin Ellis, stated that he thought the housing slump may have been caused a bit by the small amount of homes that actually changed hands pointing to the fact that remortgages were much more popular over the last six months as home owners sought out better fixed mortgagesHe also stated that over the past three months house prices still performed better by about a percent when compared to the previous quarter of the year pointing to some light at the end of the tunnel.

Ellis added that he also thought house prices would begin to level off over the coming months aided by the shocking reductions that many companies have made in their mortgage rates.  He added that the reductions will make it much more affordable for homeowners that can get a deposit together to consider purchasing a new home.  His advice sharply contrasts with other less hopeful analysts such as Global Insight chief economist Howard Archer who believes that house prices may drop another five percent before the end of the year comes due to unemployment, spending cuts by the government, and stagnant salaries.

Santander slashes their mortgage rates even lower

[ Posted September 16th, 2011 ]

With mortgage lenders competing to see who can offer the lowest mortgage rates to consumers in an effort to boost their mortgage products and become the top lenders in the face of the falling amount of home sales and house prices.  Santander is the latest company to offer even lower rates to customers springing many mortgage analysts and experts to question just how low the banks will go in an effort to tempt customers into their doors and convince them to take on mortgages in this time of economic uncertainty.

Santander announced that it will now offer its best mortgage rates a full one percent lower for qualified candidates dropping their fixed rate down to 3.99% on five year termed mortgages that are at least 75% LTV or higher.  This deal is only available to customers who shop with their intermediary company Abby for Intermediaries and comes with £995 extra arrangement fee charge that should be factored into the deal when considering if the deal is the right choice for a remortgage or for a new home buyer given the fact that the loan to value is set quite high.

The price cut is most likely not going to help first time home buyers who are unable to head to their parents for help with the 25% deposit owed, but for homeowners that have equity or are looking to remortgage their home with sufficient credit the terms should still be a great buy and helpful for locking in a lower interest rate on their home.  Of course, before making any moves it is important to consider if fixed mortgages are the best choice or if you can afford to play with variable mortgage rates for the next two years in the case that the interest rate does not jump up.

It is said in the mortgage market that there are two types of experts out there, those that will tell you that it is hard to tell how the mortgage market will continue and those that do not know yet that they do not know.  The truth is it is hard to tell for sure if mortgage rates have bottomed out or if they will go even lower as banks continue to compete.  However, it is safe to assume that at some point they will start to rise again at which point it will be too late to take advantage of the many great deals out there.

Mortgage rates remain low

[ Posted September 15th, 2011 ]

Those who are thinking about applying for a mortgage loan and crafty landlords that are taking advantage of the current market will be glad to hear that mortgage rates and buy to let mortgage rates are remaining at an all time low compared to the figures seen last year in 2009 according to a new report that has been published be Defaqto the independent financial research agency.  The company also noted that the Bank of England is also holding the base rate down low at just .5% for the 30th consecutive month.

This is rather remarkable given the fact that over the last year analysts and experts alike have warned that the interest rate could potentially increase which in turn would cause the average mortgage rate to spike as well.  The main concern has been for those with variable mortgages as this could cause their mortgages to jump up by an additional 50 to 70 pounds per month.  Due to this fact, a large amount of the mortgage approvals over the last six months have been for people who have remortgaged their homes in order to secure a better rate that is fixed for extra security in the uncertain mortgage market.

Banking insight analyst for Defaquto David Black stated that in terms of money people who are borrowing with new loans will pay much less past the initial mortgage terms than those that took out a mortgage loan last year in 2009.  He added that those who want to secure fixed mortgages may have great luck right now and be able to get a mortgage that is set as low as 3.3% depending on their credit history and the amount they are able to pay in terms of the LTV of the mortgage loan.

Black added however that it is important to be aware of the factors that go into setting a mortgage rate and that not everyone may be applicable for the low rates advertised in the paper and on the TV due to the tougher set of lending criteria that banks are now imposing.  He also added that there is only one way that the base rate can go now in the future due to the fact that it seems to have bottomed out so those that are drawn to the variable mortgages may want to be careful before signing into any long term deal.

Rent continues to grow despite low mortgage rates

[ Posted September 13th, 2011 ]

Even though mortgage rates have hit their lowest levels in the last six decades and mortgage approvals are up compared to last year, many people who would previously be first time home buyers are still choosing to rent homes or other property instead of purchasing their own which is benefiting many buy to let landlords.  Business development director Richard Sexton for e.surv noted that the company’s research has shown that renting levels continue to be at an all time high along with mortgage rates allowing those with property to consider raising their prices amidst the competition for high level rents.

Sexton stated that high LTV lending (loan-to-value) is still lagging behind what it was back in 2008 and the high deposits are keeping many people from purchasing homes who would have previously been able to consider the idea back in 2008.  He added that the lending criteria has only loosened slightly since 2008 which has only served to help a small percentage of potential buyers who find themselves with no other choice but to look at rental properties.  Therefore, while some of the best mortgage rates are available right now, only a select few are still able to take advantage of this fact.

This is evident in the fact that most of the mortgage approvals for the past six months have been granted to those looking to remortgage their homes in order to get a lower mortgage rate and not for those that are seeking to purchase a home outright.  Many people that can meet the credit criteria and pay a high LTV are also holding back because in the economic climate they are afraid to spend their savings on a home due to uncertainty about the future.

This is excellent news for investors who are buying up buy to let properties in an effort to cash in on the low property values and the low mortgage rate while they still can.  Even better news for the investors is the fact that it is highly likely that the properties will go up in value once the mortgage market picks back up again.  For the time being most landlords are taking advantage of the current climate to increase their rents in the competitive market in particular in terms of commercial office space and within more competitive residential markets such as London and Manchester.

 
 
 
 
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