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Tracker mortgage rates start to increase

[ Posted October 29th, 2011 ]

Building societies and banks have made a great deal of changes to their best mortgage rates over the past few weeks with many private lenders choosing to increase the rates attached to tracker loans as a result of the impending eurozone debt crisis that has been increasing the tracker mortgage rates.  In fact, out of mostly fear a great number of lenders have hiked their prices back up this week including Halifax and Nationwide Building Society with Halifax increasing their rate by about 30% on all properties that come with an attached 75% LTV without any additional fees.

Other lenders that have also increased their tracker mortgage rates over the past month include Northern Rock, Barclays Wealth, Woolwich, Accord, and Santander.  Mortgage adviser Ian Gray from an online mortgage website stated that slowly more of the lenders from high street are taking their trackers back off the market or are slightly increasing the rates by about .2% every month or week or so as they start to inch back upwards due to the uncertainty of the market.  However, not every type of mortgage is heading back up to pre-recession levels because there are still some great steals on the market.

Many of the same lending agents such as Nationwide Building Society have reduced the prices attached to their fixed mortgages making it a great time to take a second look at a fixed mortgage for those who are locked into a high rate.  Nationwide for example dropped their five year product by .10 down to 3.59% just this week and for qualified buyers with excellent credit history and the ability to make a LTV of 75% there are even some mortgage products on the market as low as 2% which is the lowest they have been over the past six decades.

Other lenders are attempting to make their mortgage deals more attractive simply by altering their LTV requirements with high street banks such as Barclays bringing back their 90% LTV this week after a three year absence in which one had to at least pay a 85% LTV for a mortgage loan approval.  Also on the market are mortgage products that do not have early penalty charges from Coventry Building Society which is just one more attractive adjustment that banks are making to lure mortgage customers back in their doors.

Euro Deal does not affect mortgage rates

[ Posted October 29th, 2011 ]

Despite the facts that this week’s Euro deal caused a great deal of unrest around the world, mortgage rates are still low which was most likely helped by the stir of optimism that was stirred yesterday by the agreement of the Franco-Germany Eurozone deal.  In fact, the stock market soared to new heights at the news and the stocks helped to increase the MBS prices which helped to keep the mortgage market sitting at the same spot that it has been for weeks which is great news for those considering a remortgage or purchasing a home.

The news that the Eurozone may be stabilizing may also help those seeking out a commercial mortgage as the stock market increase helps renew faith in the business world again.  In fact, these rates have not changed either, making it a great time to invest in new property as the stock market and the mortgage market remains stable and looking good for the first time in the past few years.  Since 2007 there has been a black crowd surrounding the economy, but within the European nations there is now a ray of light that makes investment and lending prospects look a bit better.

The average 30 year fixed mortgages are set at about 3.875% as the week closes, the 15 year fixed rates are set at 3.25% and the average five year fixed rates are set as low as 2% for some banks.  These low rates are available for borrowers that have good credit and are able to pay about one percent of the origination fee.  Steady income is also a requirement and assets or savings accounts for collateral is also important for those that want to receive funds from a bank, but even those who cannot can still get rates that are slightly higher depending on which factors need improvement.

Given the fact that the mortgage rates are still low those considering tracker mortgages will also find that there are plenty of great loan options available on the market with sufficient credit and with the ability to pay a LTV of at least 75% although 85% is most likely.  It is hard to tell how long the mortgage rates will remain low with the EU still reasonably unstable and the lending crisis not quite over so experts are advising that those considering taking out a mortgage act now.

Fixed mortgages are not enough to stabilise housing market

[ Posted October 22nd, 2011 ]

As of late, many lenders and mortgage brokers are offering long term fixed mortgages at reasonable rates of up to ten years to help draw potential homeowners back to the market.  The aim of these long term mortgage contracts is to offer mortgage holders the security of knowing that they will be able to afford their mortgage payments for a significant amount of time, making them more comfortable with the idea of making such a large investment.

However, this action has been met with great debate including many people who feel that it will not actually be effectual. Behind the push for long term fixed mortgages has been Housing Minister Grant Shapps, who feels that long term mortgages offer people comfort and the security of knowing how to budget for a significant period of time.  Despite this fact, many experts have compiled proof that suggests that most borrowers actually fear the idea of taking out a long term mortgage.

The issue was brought to a new light this past week as Shapps asked lenders on Thursday to consider offering thirty year fixed mortgage products to borrowers to offer them certainty and security.  According to Shapps, this effort would help give the first time homeowner buying market a boost.

Mortgage expert Melanie Bien from Private Finance, the advisory group, stated that politicians seem to believe that long term fixed products will help to stabilise the market, but most borrowers that choose fixed products prefer the shorter terms such as two to five year deals.  She added this is because if you choose a longer term fix and then decide to pay it off buyers face a very large early repayment charge that can total up to thousands of pounds, making it a poor way to save money.

Bien also added that most longer term fixed products do not offer enough flexibility for people that do not know what they will be doing or where they will be living in the next few years, let alone in a thirty year span.  Given the charges for ending a mortgage contract early and the fact that most people do not stay in the same location for thirty years, there is a high price tag to pay for security that most people are unwilling to consider.

Mortgage Rates Finally Start To Increase

[ Posted October 22nd, 2011 ]

For the last year or so the major news within the lending market has been the fact that mortgage rates have continued to fall despite many experts warning that they had hit rock bottom.  In fact, every time that it seemed the rates could not go any lower another bank would announce lowered rates causing a new level to be reached as competitors followed suit hoping to win customers over to their banking and lending systems.

However, for the first time since the recession, rates are actually starting to increase marking perhaps the end of the buying market. The best mortgage rates bottomed out at fewer than two percent for those with excellent credit and the ability to pay a large LTV, which was remarkable and something that had not been seen in decades.

However, those who did not take advantage of the low rates to refinance or purchase a new home may regret their decision to wait as this week many lenders including Accord Mortgages, Woolwich, Northern Rock, and Santander announced rate increases.  According to lenders, now that the major banking institutes have increases their mortgage rates it is only a matter of time until everyone else does as well.

Over the course of next week ING Direct and Barclays Wealth are also expected to increase their rates and the smaller lenders are expected to match the rate hikes as well.  First to be affected will most likely be the fixed mortgages as these were the very best deals on the market, and as lenders start to tighten their rate offers it is most likely that these will disappear first followed by the tracker mortgages which will also be affected if the interest rate hikes.  Therefore, those who have not yet taken advantage of the decrease in mortgage rates may want to act now.

Once the Bank of England increases the base rate almost all of the available fixed mortgage packages are expected to leap up suddenly in price, and those with variable mortgages will feel a crunch when the time comes to pay their monthly mortgage as just a .5% increase could add anywhere from fifty to one hundred pounds more onto a monthly payment depending on the size of the mortgage.  Therefore, those that have been watching the industry may want to make a move now to avoid paying more down the line.

House prices drop £5000 over the year

[ Posted October 20th, 2011 ]

According to a new report from the LSL Property Services House Price Index, house prices have fallen almost £5,000 pounds when compared to the year on year average from September.  In fact, in September alone the average house price fell by .3% or £600 in most cases for a home that is worth £150,000.  This is bad news for those who own homes that want to sell right now because even though the mortgage rates may be down, getting the original investment out of one’s home in order to make a larger mortgage is not an easy task.

The announcement that house prices took another dive over September comes as a disappointment to those who have been watching the housing market for the last few months as several moderate rises have given hope to those who thought that the market might finally be stabilizing again.  This is also bad for those seeking out commercial mortgage investments or private property investments as pricing for these markets fell as well.  In fact, the year end value for homes right now shows that property investment is actually a very ironic term at the moment although those who can hold out for a few more years may finally see some relief.

The research also found that the average price for a home in Wales and England comes in at about £218,000, but this is still three percent less than last year.  This also does not take into account the effects of inflation which have continued to slowly seep in and are expected to eventually cause mortgage rates to increase again.  The largest growth in any property market was seen in Greater London where tight lending and a lack of space have helped property values to increase.

Housing market chairman and specialist of LSL Property Dr. Peter Williams stated that the monthly housing market fall is still small enough that homeowners should not get too worried about the futures of their investments.  He added that the small increases in the previous months of August and July help to round out the quarter statistics describing the third quarter of the year as stationary with not much movement seen.  The good news is that the housing market has overall bounced back 9% since 2009 when the effects of the recession became widespread, but is still 6% below the prices seen during the housing boom in 2008.

Leeds Building Society announces stunning 1.99% fixed mortgages

[ Posted October 18th, 2011 ]

Just when you thought that mortgage rates could not drop any lower than they already are Leeds Building Society announced this week that they have a new mortgage product on the market that bottoms out at 1.99% for a two year fixed mortgage.  This is a record low for the mortgage market in general and although it comes with strict lending criteria and some associated fees, the fact that the rates have dropped this low is stunning even to those who predicted that the mortgage market would dip lower before it finally starts to rise again.

The new deal from Leeds allows those with good credit to take a look at two year fixed mortgages that are set at 1.99% with a loan to value of 75% and an upfront fee of £1,999.  The sudden drop has also dropped the average mortgage rate on the market down to 3.82% according to MoneySupermarket the comparison website which is also quite shocking.  That makes this week the lowest that the mortgage market has ever dropped over the past four years since the comparison site has been publishing a weekly report on the housing market.

 One of the reasons that the housing market has not been able to recover yet despite the best mortgage rates that have ever been seen is the fact that most of the low rates come with high loan to values that many people simply cannot afford.  Therefore, only those with the money to make a large investment or those who already have equity in a home have been able to actually take advantage of the great deals on the market.  Many of those who are taking advantage of savvy investors who can afford to get in while the market is good and wait for the house prices to increase again down the road.

Another reason is because some of the low mortgages also carry large upfront fees that increase the overall viability of the deal a bit making them only a wise choice for those who are taking out a larger home mortgage in order to make them still a great deal.  For example, the new Leeds deal is only going to be helpful to those who have a home mortgage that is higher than £164,000 otherwise at the end of the two year term they will end up paying the same amount when the fees are added in as a normal mortgage rate.

Mortgages rate fall in long term mortgage market

[ Posted October 18th, 2011 ]

The average rates that are attached to mortgages with a high LTV have continued to fall over the past few months according to new figures from the money comparison website Moneyfacts.co.uk that was just released.  In fact, the average fixed mortgages are set at the lowest they have been for two year terms since the first month of 2008 and have continued to fall at a steady rate over the last year.  This has surprised many who have predicted every month of this year that the mortgage market would finally start to rebound.

Just one year ago the average mortgage rates for a two year termed fixed mortgage were set at about 6% and peaking at a bit over 6% six months ago.  However, today a buyer that is looking at the average rate will be able to look at rates set at 5.39% and with excellent credit and the ability to pay a high LTV even set as low as under 2% which was virtually unheard of even just a few months ago.  What is more, the rates are expected now to stay this way most likely over the next few years.

Moneyfacts.co.uk spokeswoman Louise Holmes stated that as more LTV mortgages have become available over the past few months the average rate has dropped in response.  Therefore, even if you do not have the ability to pay a high LTV you can still benefit from the fact that these have dropped the rates in general creating some of the best mortgage rates available on the market.  In fact, the average rates for products that are long term have dropped for 90% LTV mortgages, which is great news for many first time home owners that can afford some type of deposit.

Back in 2010 average five year fixed mortgage product came in at 6.66% which later jumped up 6.87% just a few short months ago.  However, as more lenders get into the market and announce their own low cutting edge deals the competition has increased causing even more to announce lower rates in response.  For homeowners that can afford to remortgage their home or those that are first time home owners with sufficient credit and the ability to pay some type of deposit can therefore take advantage of these low rates to get their feet onto the mortgage market.

Two year fixed mortgages are now the way to go

[ Posted October 17th, 2011 ]

Although there have been rumors about the base rate increasing next year, the signs are not yet apparent as the mortgage market took another hit this week with Leeds Building Society announcing new fixed mortgages set at under 2% which is now making it just as affordable to get a fixed mortgage as a tracker mortgage.  This news is making variable loans look much less attractive for those that can afford the deposit as the safe route is now on par with taking the riskier route in the name of savings.

The Leeds mortgage rates are available to those that are able to pay a loan to value of 75% and a booking fee that is set at £1,999.  Up until now most mortgage brokers have told borrowers not to take out a short two year term mortgage because interest rates are now most likely going to stay down for two years.  Therefore, those that are thinking about taking out short term loans have instead been advised to take advantage of the low tracker mortgages instead to optimize the current market conditions.

Over the last few weeks the price differences have all but disappeared putting two year fixed mortgages right on par with some of the best tracker mortgage loans with some lenders even offering better deals on their fixed products than on their tracker deals. This is mostly due to the fact that as the mortgage rates continue to drop there are simply not enough buyers and too many banks competing for the same group of potential clients forcing them to pull out all of the stops in order to attract attention to their opportunities.  Of course, buyers still have to have a large deposit in most cases for either the fixed or tracker rates which has prevented many from taking advantage of the great deals.

Right now Accord Mortgages is offering a tracker mortgage for a two year term set at 1.99% also that comes with an equal £1,995 booking fee.  The cheapest fee for a tracker mortgage on the market right now comes from Skipton Building Society which offers a two year tracker set at 1.98% but in order to get it buyers must be able to afford a loan to value of 60% which is out of reach for many new first time home buyers and only preferable for those with equity given the current economic situation.

Mortgage fees jump by 30% when you add in

[ Posted October 17th, 2011 ]

Although some of the best mortgage rates ever are currently available in the lending market, the message to buyers from many advocacy awareness groups is buyer beware because while the mortgage rate may look excellent the high fees attached to it may outweigh the good.  In many cases low mortgage rates are completely canceled out by high upfront costs that eliminate the savings on a fixed mortgage product by the time the term is over making it important that buyers take time to look beyond the headlines and consider what type of deal they are really signing up for.

Over the past year mortgage fees have slowly jumped up by over 30% at the same time that mortgage fees have been dropping as banks cleverly attempt to disguise the deals they are using to allure customers back into their doors.  This has made many seemingly great deals turn out to be poor choices for borrowers that do not consider the entire costs of a mortgage product before signing their names on the line.  In fact, the difference is almost astounding in many cases for those with an average £150,000 home mortgage.

Moneysupermarket.com published results that show that the average booking fees and application costs of a mortgage have jumped up to £1,253 during September for two year fixed mortgages when compared to the much lower average of £973 during the previous month.  Higher fees can often confuse borrowers that want a cheap deal as the low mortgage rates make it seem as if they should jump now or consider remortgaging their home in an attempt to take advantage of the low mortgage rates while they are still available on the market.  However, most of the time the fees offset any good that the lower rates can offer.

For instance, Leeds building society has announced a new 1.99% low fixed rate two year mortgage, but it also comes with £1,999 booking fee and a few other completion and application fees for any home loan that is valued at less than £500,000.  There is also another exit fee attached of £200.  This means that anyone that has a home loan that is under £164,000 would actually make out better paying a higher mortgage rate and much lower fees in the long run which is why consumer must be extremely careful before buying any mortgage product.

Fears over Greek debt and Eurozone crisis may affect mortgage rates

[ Posted October 7th, 2011 ]

This week may be the end of the best mortgage rates that the lending market has seen in years due to the fact that the looking Eurozone debt crisis is likely going to affect the way that banks conduct their lending.  It is too early yet to tell how the Greek debt and sister countries debt will affect the major banks, but as banks seek to protect themselves they will likely seize or slow down their interbank lending practices which is going to affect the average mortgage rates.

One of the primary reasons that fixed mortgages have been able to drop as low as they have is due to the fact that banks have enjoyed low swap rates due to the low Bank of England interest rate.  Lenders have taken advantage of the low swap rates to help reduce their fixed rate lending terms for loan seekers and have been using this to their advantage to help attract new customers.  However, while the competitive rates have helped out those seeking a mortgage, with the lending credit getting tight away again rates are going to jump up forcing banks to once again put strong credit regulations into place.

Variable trackers have not been as affected by the Eurozone crisis as the fixed mortgages due to the fact that they are funded through monies that come from other lenders usually or through savings deposits at a rate that is decided by Libor.  Therefore, those that have trackers are most likely in a better situation over the next few months as the three month Libor has sat at .93% for the past three months which is a slight increase over the past few months prior to it.

Those seeking out a mortgage or considering a remortgage to get better rates than what they are fixed into now will want to make a move to do so soon, because over the next month or two the eurozone crisis could cause mortgage rates to skyrocket with both trackers and fixed mortgages eventually affected.  Even more concerning is the fact that over the next few months it is very possible that lending restrictions will also tighten up making it harder than it already is for new homeowners to get their feet into the property market.

 
 
 
 
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