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Virgin Money drops fixed mortgage rates

[ Posted June 5th, 2012 ]

The chatter among mortgage experts for the last several months has been that mortgage rates are going to start to steeply rise and that those who are not yet on fixed deals should jump in before it is too late.  With many banks such as Halifax and RSB choosing to increase their SVRs, it looks as if the experts are right and as May closes most experts are predicting that more major lenders and building societies are also going to hike their rates.  With this in mind, it is a pleasant surprise to hear that Barclays and Virgin Money have dropped their fixed deals by .2%.

Virgin Money announced at the end of this week that they have reduced some of their buy to let mortgage rates and select fixed mortgage deals by .2% to help entice property owners that want the safety of a better fixed rate in the uncertain housing market.  For landlords, the buy to let mortgage rate of 3.85% may be enticing although certain credit restrictions and a set LTV value are required in order for this deal to fully be taken advantage of.  The rate will change slightly depending on these factors.

Residential homeowners are likely to find the two year fixed mortgages to be attractive.  Those seeking a two year product will want to take a look at the 3.55% available with a high enough LTV and those who prefer the security of a five year mortgage term will want to look at the 4.09% rate.  Once again, the amount of equity that you have in your home already or LTV that you can afford will impact the final rate, but for those who have been paying much more or are stuck on an undesirable SVR this may be a great solution.

Those interested in the deals can find them available via Northern Rock Bank which was purchased by Virgin Money in 2011.  Borrowers that are interested in the deals can also head online to fill out a mortgage application or go through a registered mortgage broker.  An official statement from Virgin Money also added that customers will also be able to take advantage of the cash back incentives that are normally offered on the same products.  They also added in the statement that remortgage customers can also qualify for free valuation and free legal services.

Post Office reduces its mortgage rates

[ Posted February 13th, 2012 ]

The Post Office announced this week that they would offer some of the best mortgage rates so far seen in 2012, and it is true that some of their products are sitting at the top of the best deals for the year. The lending provider announced that they will cut 1.01% off their entire variable and fixed mortgages with the rate change effective immediately. Therefore, many of their loans are now much more affordable and something to take a second look at for those who want to remortgage with a good rate.

The top product to take a look into is the five year fixed mortgages that are now set at 3.38%, making it one of the top deals on the market for those who want the security of a five year fixed rate. Attached to the mortgage is a £995 fee, but when you take a look at the mortgage rate the fee is almost a drop in the hat, especially when you consider the fact that as many banks keep increasing their rates the new five year fix is almost the same as most banks’ two year fixed products.

In order to take advantage of the deal remortgages or new home buyers must come up with a 75%LTV. Those who are looking to get their foot onto the housing market for the first time may want to take a look at the two-year fixed mortgage that comes with the low rate of 2.73% although home owners must come up with a 65% LTV.

For this reason, those seeking to remortgage their home in order to get a lower monthly mortgage rate will most likely be the group that takes advantage of it.  There is also a three year product set slightly higher at 2.95%.  These mortgage products also have an attached £995 fee.

Head of Post Office mortgage division, Mike Cook, said that they are happy that they have been able to drop their mortgage rates while expanding the range of products they can offer consumers. Those who do not have the ability to meet a high deposit should also check out the two year fixed products that come with a high 80% LTV and the low rates of 3.29% or a three year fix at 3.89% that only requires an 85% LTV.  Tracker products are also available at a variety of different rates.

Lenders introduce 10 year mortgages

[ Posted January 29th, 2012 ]

Despite the fact that many lenders are starting to buckle down on their rates a number of building societies and banks have introduced ten year fixed mortgages this week in an attempt to lure those that want a more secure option for owning a home.

The standout offer is no doubt a new ten year deal set at 3.99% which should be an excellent choice for those who are applicable over the next few years; especially given the fact that most brokers are now predicting that the market is going to be shaky for the next few months.

Norwich & Peterborough Building Society,  Co-Operative Bank, National, and Woolwich Counties Building Society have all announced new ten year fixed mortgages this week that are all set competitively at under the 5% mortgage mark. The 3.99% mortgage deal offered earlier hails from Norwich & Peterborough and is obviously the best deal for those considering a ten year mortgage.

Although it is hard to tell what will happen in a decade, it seems a safe bet that below 4% is going to remain an excellent mortgage rate to be signed into ten years from now, although it does not allow much room for those who expect to be moving on.

The ten year low price deal is open to homeowners that can afford a LTV of 25% or greater and does have a £295 fee attached to it.  However, those that take advantage of the mortgage rate will get £200 cash back which offsets the fee a bit. In addition, those that are taking a look at the ten year rate as a remortgage will get free legal services and valuation tossed into the deal to sweeten it up a bit more.

If 25% is a bit out of your LTV range, then the Co-Operative Bank deal may be worth a look that, as this sits at 4.79% and is also good for the next ten years. The National Counties deal sits at 4.19% but it is only for those that are remortgaging their home and already have at least 75% or more paid into their home.

The same is true of the Woolwich County loan which sits at 4.99% and has a 70% LTV attached to it making it out of reach for most homeowners. Plus, the latter deal comes with a very high fee of £1500.

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.

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.

Fixed Rates not first choice for mortgage owners anymore

[ Posted October 6th, 2011 ]

At one point fixed mortgages were the most popular choice for anyone that decided to secure a mortgage because of the safety that having a secured interest rate gave people.  It is true that there is something financially comforting about knowing what your mortgage payments will be every month for the term of the mortgage, but due to the weak economy and the lowered mortgage rates the mortgage figures are starting to favor variable mortgages with many people attempting to take advantage of the low rates available on the market.

For a few months many people were rushing into fixed mortgage packages changing their variable mortgages to fixed packages due to the fact there were rumors that the Bank of England would increase the interest rate by more than two percent.  However, now as the economy remains weak and the US does not adjust their rates most analysts are predicting that the Bank of England will not increase interest rates until at least 2013 for fear of rapid inflation, which means that it may be worthwhile to hang onto your tracker just a bit longer if you truly want to take advantage of the best mortgage rates out there.

According to new data compiled over September by the Mortgage Advice Bureau the amount of borrowers that chose fixed mortgages dropped down below 70% for the first time since November of last year.  The data showed that 69% of all mortgage applications were for fixed mortgages, which is a sharp drop from the 74% that was seen over the month of July.  The average loan value also dropped during the month of August by about five hundred pounds which reflects the falling house prices that are also affecting the housing market.

The overall amount of new home owners continues to be weak due to the fact that loan to value levels are still too high for most first time home owners to afford the deposit needed to get a credit approval.  During the month of August the average LTV was 71% which is up slightly from July’s LTV average value of 69%.  However, for those that can afford the large deposits now is the time to buy as the mortgage rates are remaining low and most likely will over the next few months.

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.

 
 
 
 
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