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Buy to let mortgages increase by about a third

[ Posted May 18th, 2012 ]

According to figures from the Council of Mortgage Lenders buy to let mortgages continue to be the product of choice on the mortgage market with a marked increase of almost 32% during just the first quarter of this year.  This has also led to the introduction of many new buy to let mortgage rates across the market for potential property investment as many are deciding to rent instead of purchase homes creating a high demand for the rentals.  The CML also stated that repossessions have finally started to steady marking a decline in the amount of foreclosures that are affecting banks and the market.

This is the third year in a row that the value of different mortgages taken out for buy to let purposes has increased.  Increasing rents and the overall decrease in house prices are making many investors and landlords take a second look at the buy to let market.  Some are even securing commercial mortgage deals with the intent of renting them back out to businesses and organizations that do not want to get tied to a mortgage or cannot get approved for the structure that they need.

Over the first quarter of the year about 32,300 loans with a combined value of about £3.7bn were offered to buy to let investors.  While this is a stunning 32% increase it is still only about a third of the lending that was seen back in 2007 before the mortgage market crashed.  The CML stated that most of the property market is now spoken for by the buy to let sector, and banks seem to be responding to this fact as the best mortgage rates are generally offered to buy to let lenders over other lenders.  Today the CML estimates that about 12.8% of all outstanding mortgages are buy to let mortgages.

While buy to let mortgages are continuing to become more popular, one reason that they may not have reached the same heights as in 2007 is due to the fact that landlords are required to have larger deposits than they did back in 2007.  According to the CML, in 2007 the average LTV was about 85%, whereas today the average LTV is 75%.  Despite this fact, it seems very telling that rental mortgages are still more popular than home mortgages and reflects where the mortgage market is slowly heading.

Aldermore announces new commercial mortgage portal

[ Posted March 30th, 2012 ]

Aldermore Commercial Mortgages, a major banking provider for commercial and development mortgages, has announced the launch of a new online portal that will allow commercial mortgage advisors to make inquiries about loans 24/7.  Managing director for Aldermore, Rob Lankey stated that the new portal titled the Acumen portal was designed to let brokers look up information or start a formal inquiry at any time of the day or week.  The website will also allow them to upload documentation for contractual purpose and obtain a decision immediately that can be in turn given to clients.

In order to use the new commercial mortgage portal, brokers or intermediaries need to be approved members of the Aldermore broker panel.  Lankey explained that the new system allows a broker to place an inquiry using the online database at which point the Acumen system will then begin a credit search, check the age and ID of the applicant, and then perform industry and service checks.  If the system finds that everything is correctly entered and in order it will offer a price for the loan to customers and create a terms document that can be downloaded.

At this point applicants will have the actual terms of the agreement in their hands to review and the mortgage rate offer to peruse.  This allows applicants to choose if they want to continue to the final application stage and actually take out the loan under the current guidelines and conditions.  Lankey went on to explain that Acumen is primarily aimed at brokers that handle commercial mortgage inquires on a daily basis to help expedite the process.  He added that brokers should be able to identify if it will be a simple or complicated mortgage application and choose to make an in house application appointment if the situation calls for it.

In the case that an application may be complicated it will be handled in-house in the same fashion that Aldermore has always met with brokers with the aid of a lending manager from the bank.  Of course, the overall appeal of the Acumen online portal is that for the many less complicate applications brokers can expedite the entire mortgage process making it easier for them to complete their job for clients and allowing more clients to be satisfied with both their brokerage and banking services.

Buy to let mortgage requests flooding lenders

[ Posted March 16th, 2012 ]

As funding issues are becoming a major problem for many lenders, banks are increasing their rates in order to address the lack of funds.  One of the reasons that lenders are feeling overwhelmed by funding requests are the low buy to let mortgage rates that are out there on the market.  Buy to let lenders are taking out a great deal of the lending funds that are available for the banks to utilize because leaving very little for other forms of lending.  In fact the increase in lending to landlords is at one of the highest peaks of the last decade.

The result of the lending crunch is that now landlords are finding it hard to find great deals on their buy to let mortgage rates because lenders are increasing their rates in order to cope with the sudden demand for a limited amount of cash.  This is also having a negative effect on those seeking a normal home mortgage, because landlords are quickly snatching up the available lending funds.  The increase in renters has only made the market more desirable for landlords and it does not seem like there will be a shift anytime soon as mortgage rates continue to increase and lock out many new homebuyers.

One of the major problems is that building society lenders and larger banks have taken their best mortgage rates off the market because there is not enough money in the wholesale markets to fund the deals.  New regulations put in place also restrict the amount of money that banks can place in hold therefore compounding the issue even more.  This forced borrowers to head to other alternative lenders such as the Skipton Building Society and Accord as they were able to offer better LTVs and rates.

This created a problem as they also did not have enough funding and the amount of applications they received was too much for Skipton’s underwriters, forcing the managers to close the banking business until they could catch up with the backlog.  Of course, anxious landlords then turned to smaller lenders with the same results forcing affordable lending deals off the table as companies are unable to catch up with the sudden influx in demand.  Although some of these building societies will return, it is highly unlikely that they will do so with reasonable rates making it even harder to get a standard mortgage at a good price.

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First time home buyer mortgage deals improving

[ Posted February 25th, 2012 ]

Despite claims that mortgage rates are increasing and that first time home buyers are going to have a harder time getting their foot onto the property ladder, it seems that the mortgage market is actually catering to them for the moment.

In fact, as the free stamp duty Government plan comes closer to the end it seems that banks are offering more mortgage deals in order to encourage first time home buyers to take advantage of the great deals. The fact is that there are so many great deals on the market right now that the competition is actually intense among those attempting to offer the best lending deals.

First time home buyers have until the 25th March to purchase a home that is valued at less than £250,000 without worrying about paying the stamp duty, and banks seem to know this as they are rushing to cash in on those taking advantage of the scheme.

In fact, despite dismal housing market predictions, a 7% increase in the amount of first time home buyers was seen in December 2011 as savvy home shoppers took advantage of the best mortgage rates out there on the market, according to data compiled by the Council of Mortgage Lenders.

Over the next month, the increase is alleged to be slightly higher as new bank lending options are going to likely fuel the fire. In fact, some banks are offering fixed mortgages that start with LTVs as low as 95%.

For those that want to get out of the ever increasing rental prices, and start actually placing their money in an investment, these deals that come with a low deposit may be all that is needed to actually start to get a leg up on the  property market.

The Post Office is one of the lending agents that have attacked the first time home buyer market by offering lower mortgage rates that only come with a 90% LTV, making them more affordable.

Experts still warn that the lending criteria for these loans are strict, so only those with good credit are going to be able to actually take advantage of the loans. However, the new offers from Lloyds, Nationwide, First Direct, Chelsea Building Society, and other lenders are still going to open the market up to those whose only problem has been affording a high deposit upfront.

Buy-to–let mortgages steadily increase

[ Posted February 14th, 2012 ]

New figures from the Council of Mortgage Lenders show that many investors jumped at the excellent buy to let mortgage rates that were available on the market. In fact, for those that were looking for a good deal, CML reports that there were about 124,000 different products available compared to the 94,000 that were on the market the previous year.

The increase in products means that consumers had options when it came to picking who they would go with, and more options meant low mortgage rates for most as the lenders were competing for business. One of the reasons that there is so much more buy to let activity is the fact that there has been an increase in the amount of tenants in the UK as the property market slowly shifts towards a rental market.

This is due to the fact that many first time buyers are having a hard time raising the required deposits for a mortgage even if the lower mortgage rates sound good.  The tightening of the credit criteria required to receive a loan has also impacted many renters that ordinarily would have purchased a home.

Lenders have responded to the situation by offering better buy to let mortgage rates for landlords although the CML still believes that there are plenty of offers out there for first time buyers if they can meet the correct set of criterion.

Overall, in 2011 about £14b worth of deals were completed which is the largest amount since 2007 when the housing market actually collapsed along with the economy, but it was still only half of the whopping £28b that was seen in 2008 making it a market that still has a lot of recovering potential to come. Yet the steady increase is encouraging.

During the last quarter of 2011 there were 38,000 mortgages approved totalling up to £4bn which was a slight increase over the higher performances of the third quarter as well. This suggests that the buy to let market is tentatively starting to come back. Director General for CML, Paul Smee, stated that buy to let lending continues to remain strong and so long as demand for rented property continues to grow it is reasonable to see reflected growth in the actual buy to let market.

Moodys reports commercial mortgage repayment rates down

[ Posted August 30th, 2011 ]

According to Moody’s Investors, the repayment rate of companies on their commercial mortgage are falling 33.8% defaulting on their repayments due to the fact that the borrowers are having a hard time meeting their lender’s tough criteria to refinance their mortgage.  Therefore, even though the company’s may be making an honest effort to refinance their loans so that they can meet their payment schedules, many banks are not willing to work with them in Europe causing even larger problems overall in the market.

In fact, according to new figures from London real estate analyst Lisa Macedo, when compared to 2010 the commercial real estate repayment rate has decreased by almost 47%, and when compared to 2009 the repayment rate has fallen by a full 65%.  Compounding the problem for banks and the commercial mortgage market in general is the fact that during the first half of 2011 37% of all borrowers were currently in default which is an increase over the 21% that were in default in the first half of 2010 based on the CRW data compiled by Moody.

Macedo stated that refinancing is not looking great for most of the CRE loans and as a result it is only more likely that more borrowers are going to default as they cannot meet the terms of their loans any longer with the economy continuing to stay down.  She added that funding that in the past has been available for investment in CRE has also dropped significantly since the credit crunch began and even though commercial mortgage rates may appear down, there has not been any type of meaningful recovery which means that the market is still in the same disarray, if not more, than it was back in 2007.

Most lenders are making it hard for commercial borrowers to even consider refinancing the terms of their loans to help with repayment due to the fact that they require loan to value levels that are set at anywhere from 60-65% which is too much for most borrowers to afford most loans that are within the CRE market are also not backed with any equity making it harder to even attempt to match the LTV with other properties to make the refinancing even an option.

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How to search out a commercial mortgage loan

[ Posted July 22nd, 2011 ]

There are many different financial institutions that offer prospective business owners and developers commercial mortgage loans, but each offers different rates and terms making it hard to determine which the best choice is for your company.  The good news is that there is a large opportunity for borrowers right now as the general commercial rate is down on mortgages and a great deal of information available regarding the options so that you can make an educated choice when it comes to choosing the terms of your commercial mortgage.

One of the first things that you should do as a potential borrower is take the time to perform some research and investigation before meeting with any lenders to save you time and make sure that you are not talked into a deal that is not actually the best for you.  By taking the time to look for the best commercial mortgage rates prior to any meetings with lenders you can make sure that when you take the time to meet with a lender it is for one that is an honest and affordable option for your business.  Luckily, the internet has made this task much simpler than it used to be.

There are many websites available online that allow you to quickly offer your details and specifics about the type of mortgage that you are after.  Some of these websites will actually search the internet for you offering the lowest rates form a variety of different vendors and also ascertaining if you are a likely candidate for any of these loans.  In addition, they can also help you get in touch with various lenders so that you can make your own comparisons and decide which lenders are worth your time scheduling a meeting with.

If you are not comfortable with heading online to look and compare the various commercial mortgage rates that are available for your type of purchase, you can also check with your local bank as a good starting point and ask to meet with a lender.  It can be helpful to at least meet with a professional lender even if you do not intend on taking out your loan from that bank so that you can get an answer to any questions about the terms of a mortgage an what some of the terms mean before making a final decision.

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.

Banks nervous that home repossessions will increase over the next few months

[ Posted April 26th, 2011 ]

The Council of Mortgage Lenders announced tentatively to home owners that they may not be able to keep the number of repossessions and arrears down when compared to last year’s figures.  Over the course of last year the CML stated that repossessions decreased down to 36,300 when compared to the 47,7000 repossessions of 2009.One of the reasons that many with fixed mortgages were not affected is due to the fact that the Government stepped in to help prevent evictions except for in worst case scenario situations.

This helped to keep the numbers down over the course of 2010, but now the CML believes that the amount of repossessions will increase again back up to approximately 40,000 which will match figures from the credit crisis during 2008.  The rise in repossessions is being blamed on the Government cuts, the weak economy, and the overall rising expenditures of living as a result of inflation.  The expected rise in the bank interest rate that will impact mortgage rates is also expected to hurt those with variable mortgages and increase the likelihood of forced repossessions of arrears as well.

In its annual report the CML stated that they are not sure that the repossessions and arrears will be avoided during the course of 2011 because all of these factors will have a large impact on borrowers’ finances.  Adding to the problem is that most of the Government programs that were quickly devised to help those drowning get back out of debt.  One of the largest programs that ended on April 21st is the Government’s Homeowner Mortgage Support Scheme that helped homeowners facing income loss reduce their monthly payments for two years.  However, with the end of this program now homeowners that are not recovered will have to make the higher payments leading to potential problems.

Outside of the fact that the CML expects to see more repossessions, they also expect to see an increase in those who get behind in mortgage payments by about 10,000.  The agency added thought that they will continue to work with those who have buy to let mortgage rates, home mortgages, and even commercial mortgage rates to help them work through troubling times and hopefully minimize the chances of repossession or mortgage arrears in the coming remaining quarters of the year.

Remortgages increase over February out of fear of jumping mortgage rates

[ Posted March 31st, 2011 ]

In the face of fears that interest rates will soon skyrocket causing mortgage rates to launch right along aside of them, the amount of people that choose to remortgage their homes over last month soared to the highest it has been an a 26 month period.  New figures from the Bank of England reveal that a little under 36,000 people choose to remortgage their homes during the month which is the largest amount of people to do so since December of 2008 making it a busy month for bankers even though the amount of new mortgages for the period only peaked slightly.

The jump in remortgages is thought to have been driven by reports from the Bank of England that the base rate is going to increase sharply as a response to the rate of inflation which continues to increase.  This prediction led many people who had variable mortgages to quickly head into lender’s offices in search of fixed mortgages to protect themselves from higher monthly payments.  The base rates is expected to steadily increase over the next few months leading many people into paying much more on their monthly loans which will put a strain on already strained household budgets.

Even though there was a rush of people over the month of February searching to secure their monthly payments and even some who were concerned about their commercial mortgage rates, remortgage amounts are still much lower than what was seen on a typical basis before the recession when approximately 100,000 remortgages were approved every month.  This is due to the attributed to the fact that many people do not have the credit to be eligible for a remortgage with the stricter lending terms preventing them from seeking out the remortgage that they also may be in need of to protect their investments.

February also saw a slight peak in new mortgages that were approved making it the most productive month since November of 2010, but when compared to the average amount of a stable housing market mortgage approvals are still down by about 40% of their previous standard.  Net mortgage lending was also shown to decline down to £1.2bn over the course of last month from its previous amount of £1.8bn in January although when compared over a six month period the rate is still considered to have increased. 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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