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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.

How to buy so that mortgage rates work for you

[ Posted August 8th, 2011 ]

If you are thinking about getting in on the rental market then it is important to understand how mortgage rates work when it comes to buy to let mortgages and how you can start to make a profit within the rental market.  With rental prices continuing to increase due to the fact that people cannot afford the high deposits required for a home the rental mortgage market is now looking very enticing to those who can afford to make the investment as the guaranteed income is hard to debate.

The main difference for those that are considering the buy to let mortgage rates and those that are looking at a regular mortgage is that when it comes to buy to let property consideration a lender will take into account the potential rent that a property will bring in as a source of income that can count towards your approval. This can help you if your regular income may not be enough to secure a property, because counting the incoming rent will significantly add to your potential as a lending partner when the bank is looking over your application.

Most lenders will want to make sure that the expected rental income is going to add up to be at the very least 125% of the monthly payment that is due on the loan plus the mortgage rate. This will be the same regardless of whether you want a fixed or tracker mortgage when it comes to your buy to let mortgage.  Depending on which lender you also work on it could also be based on the standard variable rate of the lenders with an additional one percent factored in to make sure that landlords are not going to foreclose during periods when the property is between renters.

Many buy to let investors go for interest only mortgage payments to reduce the cost of the mortgage. This can work well in the short term but can be risky in the long run.  Most lenders have their own rules when it comes to how much you can borrow to mortgage a property, but it will vary depending on which group you decide to work with.  Usually there is a maximum amount set for each property and if you already have a home then the amount you are allowed to borrow may also be reduced.  There are also some rules when it comes to how many buy to let property mortgages a banking institute will allow you to hold at one time based on the amount that you own.

Weekly bills increase by £54 causing fear for those watching the mortgage rates

[ Posted May 21st, 2011 ]

The typical British family saw their weekly bills jump by about £54 per week due to the combined impact of rising energy costs and the fall in the retail prices Index.  Add in the fact that the 2% inflation target was missed this quarter for the sixth time and it is only a matter of time before the interest rates are forced to increase bringing with them an increase in the cost of the average mortgage rate attached to a fixed or variable loan.  For those that have already been hurt by the price of fuel increasing by 16% over the last year, and owning a home may soon become impractical for many on stretched budgets.

Moneysupermarket, the comparison website, compiled the cost of weekly bills and factored in the new pressure that has been placed on families due to the increase in petrol affecting energy bills.  Head of banking for the website, Kevin Mountford, stated that many families are starting to feel as if their budgets cannot be stretched anymore which has caused a deep fear to set in for many that owning their home is simply not going to be an option for much longer.  This caould stall the already fragile economic recovery as unemployment and bankruptcy is expected to rise soon along with this point.

The official figures from the Office for National Statistics released this week show that inflation jumped again by another 4.5% over the course of April which is much higher than the Government’s hopeful goal of just 2%.  This means that homeowners with variable mortgages will see their monthly mortgage payments increase at a time when any bill increase could be devastating.  The same is true for those who hold a commercial mortgage set on variable terms given the fact that most businesses are struggling to stay afloat as well and monthly operating costs could be damaging as well if increased.

It is not only the commercial mortgage rate that many business owners are concerned with, as the price of air travel also jumped by 29% over the course of March when compared to April and the costs of extras increased by another 5% in general.  Even those who wanted to escape the stress of everyday life were hurt as the price of cigarettes and alcohol increased by 5.2% as well which is the highest month on month increase seen in 15 years for this genre.  Opposite this, the average worker has only seen an increase of about 2.5% which is not enough to keep ends meeting.

Last year’s low mortgage rates led to large uptake in holiday properties

[ Posted March 31st, 2011 ]

While the residential housing market may still be stagnant and in a depression due to rising mortgage rates and other concerns leftover from the credit crunch, holiday homes are continuing to sell well on the market as investors are using the buy to let profits to help fund their own mortgages.  The National Association of Realtor’s 2011 survey revealed that those with the equity and investment power to purchase holiday homes at low market values are taking advantage of the stagnant market due to the potential to snag low mortgage rates for the time being to get quick profit and return on their investments.

Research from the survey revealed that 38% of all holiday home owners decided o take advantage of the momentary low drop of the buy to let mortgage rates and the overall low prices of the real estate properties.  The survey showed that the average house prices for these properties dropped by about 11.2% which can also be attributed to the amount of people forced to sell holiday properties in order to deal with the tight budget that the economy created in many households;  with the flooding of the market came the quick reduction in overall house prices.

According to the research, 27% of holiday property buyers made the purchase for their own personal use, 12% did so simply because of the low prices and the investment opportunities when the prices go back up, 11% did so due to the best mortgage rates, and the rest for undisclosed reasons.  Many people also reportedly mixed pleasure with profit as they hired the properties out to travellers while not in use to turn a profit and help pay their own mortgages but still have a holiday home to go to for a few weeks during the year.

Seven out of ten of the buyers questioned in the survey reported that rental income was a large portion of the decision to invest in holiday homes since they could hire it out while into in use.  94% of all those questioned stated that over the year of 2011 they plan to hire out their rental properties purchased last year with 60% of those stating that they think that the rental income will cover around half of mortgage on their primary residence.

UK Home Repossessions Fall in Final Quarter of 2009

[ Posted February 18th, 2010 ]

Recent data has indicated that fewer people in the UK had their homes repossessed during the last three months of last year, and this was also mirrored by a definite fall in the number of court orders issued for the seizure of properties.

According to the Council of Mortgage Lenders, lenders repossessed more than 10,000 homes during the three month period leading up to December, a figure that is 13% lower than the previous quarter, and also 2% down on the same period in 2009. During the period of October to December 2009 there were almost 17,000 home repossession orders in the UK, and this figure is 15% down on the previous three month figure to September 2009. Independent figures issued by the Ministry of Justice showed that 42% fewer mortgage possession orders were issued by English and Welsh courts during the last quarter of 2009 as compared to the same period for the previous year.

With the current signs of greater stability within the labour market, as well as the general consensus that interest rates will stay long for a continuing period, the Council of Mortgage Lenders has cautioned that its previous estimate of 53,000 repossessions throughout the coming year now appear somewhat overdone. The Council warned, however, that we continue to face a rather uncertain period. They caution that, although the lower levels of repossessions are a tribute to continued low interest rates as well as efforts from the government, lenders and the advice sector, borrowers are likely to come under pressure as and when interest rates are eventually raised.

The job market has also been one of the key factors in keeping the number of repossessions lower than expected, with unemployment rising much lower than had been expected and much lower than was seen in the previous recession. Overall confidence in the housing market has also improved with a 5% rise in the number of construction orders during the three months leading up to December 2009 up by 5% on the previous year. New buy-to-let lending also rose for the second quarter in a row, further stimulating market confidence. Many home owners being able to take advantage of some of the best mortgage rates in years as well as find quality re-mortgages have also helped contribute to this trend.

Borrowers Facing Unprecedented Uncertainty Over The Future

[ Posted October 25th, 2009 ]

In many instances

standard variable rate (SVR ) is lower than the rate that had been paid during the initial deal. That’s the reason for many borrowers whose current deal is coming to an end to choose between  taking out a new deal or moving to their lender’s SVR.

Sometimes the mortgages arrangement fee cannot be justified due to the risk of defaulting so it must be due to the risk of interest rates rising.

Asking yourself if you should  insure against mortgage hike? There is only one answer:

Unfortunately there isn’t  any insurance that will protect against a rate increase.

Choosing to move to your lender’s SVR for the time being you should consider setting up a savings account in which the difference between your old and new lower monthly payment could be saved.

This money can be utilised in a future event of a of a sudden rate increase, giving you a buffer,  while you are looking for a new deal.

The only way to ensure that your monthly payment remains the same, regardless of any rate increase, is to move from your current deal onto a fixed-rate deal. But, even financial experts can’t agree on the way ahead.

Borrowers are facing unprecedented uncertainty over the future path of interest rates, which means a tough choice between low-rate tracker mortgages and the security of more costly fixed-rate deals.

Accordinding with L&C the tracker would be the best choice in terms of total repayments over the five years if interest rates rose at a slow, steady pace, but the fix would be better if rates rose sharply.

 Homeowners with low SVRs of 2.5% should also stay put. The  research shows that on any SVR at 4% or higher you could end up paying more than on a five-year fixed rate by the end of the term (in this „steady” scenario) and should consider remortgaging.

Why Are People Not Remortgaging?

[ Posted August 23rd, 2009 ]

Remortgaging:  A good or bad decision?

When it comes to remortgaging, the answer is always dependent on the current economic status, and how good or bad of a deal you got when you first financed that home or business.  While it is sometimes are to see what is behind that closed door, we are going to provide you with the key to re-opening it. 

The best way to make decisions when it comes to remortgaging is to look at a variety of factors.  The first question to ask yourself is, "How were things financially when I made this investment".  That question should be quickly followed with the important question of, "Is my situation now, better or worse?"  Once you have gotten answers to the questions, you can narrow down the paths to choose between.  Obviously if you were struggling in the beginning  and have fought your way to a better financial situation, then remortgaging could be a great option for you to lower those interest rates.  For those of us who received our mortgage with low credit scores, this can make a drastic improvement in your financial well-being.

For all of those people who were in a better position than the rest of us, you most likely got a great interest rate on a cheap loan or mortgage option.  If you fall into this bracket then you will notice that lately it just does not really play in your favor to remortgage at this time.  With interest rates staying low after that initial introductory offer, many have chosen to stay with their initial lender. 

With the number of people opting out of remortgaging their properties, first time home buyers and next time buyers are benefiting as well.  With the competition amongst lenders heating up, it has proven to be a buyers market in which many have chosen to take advantage of expanding current investments instead of refinancing old ones.

APR’s- The Need To Know for First Time Buyers

[ Posted August 21st, 2009 ]

Need to Know: Annual Percentage Rates for First-Time Buyers.


It is important that when we choose to make a serious investment that we truly understand the costs involved.  So for those first time mortgages we are going to break it down simply for you. There are numerous times of interest rates out there to choose from when in comes to repayment options.  These are often broken down into "variable" interest rates and "fixed" interest rates.  These rates will apply to all forms of financing from loans, mortgages, and remortgaging options.

The first one we shall discuss is variable interest rates.  Depeding on the company in which you recieve your loan from, the rates are calculated with a range for potential variance.  For example, if you recieve at loan at 5% interest monthly, that is not a guaranteed rate for every month during that year or term of the investment.  It will have a range of values in which it can vary between throughout a single term.  The term can be monthly, annually, bi-annual and quarterly.  Also, which an interest rate is provided to you, it is important to know the time periods in which the interest is going to be applied.  Maybe a little more than you had orginally thought was required to simply make that next home purchase?  It really is not as difficult as it seems.  You are not expected to be an expert in financing as that is your bank or other financing instituions job.  However, it is important that you have basic knowledge of the information you will be presented with so you can ask questions.

The second topic in regards to interest rates are the different types.  The is a different between simple interest and compounding interest. A simple interest rate is easily calculated by simply taking the amount owed (principal), and multiplying it by the interest rate and time period ( number of quarters, months in the year, or number of years).  That will give you the amount of interest that will be paid over the duration of your loan.  This interest type is associated with a nominal APR.  Then there is the matter of compounding interests.  This is the option that most lending providers will choose.  This simply means that everytime interest is applied to your loan, that amount will be applied to the total loan amount.  Now, when it is time to apply the next interest amount, you will be charged interest on the new principal amount which includes the last interest addition.  Just think about it as buying jelly candies.  If I charge you tax for every candy you have, then when you start with 3 candies, the initial tax will be charge on three candies.  Now that you purchased two more, your collection has risen to 5.  The next time I charge you taxes it will be on 5 candies.  Not as hard as you thought right?

Finally, a fixed APR will result in a constant percentage rate being applied to your original loan amount for the duration of your loan.  This is often chosen by those who seek consistency and prefer smaller risks that can be associated with variable interest rates.  Now that you have the basic understand of APR’s and how they can affect your loans, you have enough knowledge to at least ask questions and do not have to solely depend on your or trust your financial institution’s suggestion for "best choice for you".

First Time Buyers Ask More Questions

[ Posted August 13th, 2009 ] is a web site that answers questions that people have on mortgages and other topics related to housing needs in the United Kingdom.

They answer varying questions with professional advice on a wide area of topics that will hopefully help the general public.

The company released some statistics on the question areas most asked and it turns out that some 41% of the questions were related to first time buyers.

The second area of questions was on remortgages which was some 33% of the questions. This area grew by some 5% which means more people are becoming interested in this area of home buying or repurchasing.

The third area of interest came in at 24% and this was on the residential property market, where there were many questions asked in this area.

The remainder of the top ten questions included buy-to-let, self-employed, high loan to value, equity release, flexible, sub-prime and right to buy. There were a total of 5,940 questions asked of the web site which shows that there is a high level of information being sought.

David Elms, the Chief Executive of commented, “These latest figures suggest a stirring amongst those thinking about re-mortgaging, after the previous two months drop in re-mortgage enquiries. More of those looking to re-mortgage are now seeking a whole of market mortgage adviser who can give whole of market advice and start to unravel the confusion of the current mortgage market.”

He continued, “It is also clear from these new figures that first time buyers remain baffled with the mortgage maze, and are continuing to seek whole of market advice to get guidance and help on the right mortgage decision for them.  With some mixed news on whether there are signs of recovery in the property market, as well as mortgage options and deals still changing at a fast pace, it is not surprising that those looking to enter the market are seeking advice.”

Mortgage Brain, New Source For Mortgage Information

[ Posted August 10th, 2009 ]

A string of companies including Ingard, Exclusive Connections, SimplyBiz, The Mortgage Alliance, Stirling & Law and Genesis Home Loans, as well as Mortgage 2000 ‘Encore’ users, have contributed to the rapid growth by selecting Mortgage Brain as their preferred solution for mortgage sourcing. Mark Lofthouse, CEO of Mortgage Brain, comments, “With this announcement we want the mortgage industry to know that we’re the only sourcing company prepared to offer guaranteed mortgage product details with the launch of Mortgage Brain Premier Plus+. With its release, we’ve seen a huge increase in the number of companies and mortgage advisers exclusively selecting our products and services.”

He continued by saying,“Intermediaries have been asking for guaranteed product data and we’re delighted to be the first and only sourcing system to deliver it, ensuring they have the confidence in the system they use is of paramount importance and a huge deciding factor when choosing software solutions to help manage their businesses.”

He finished by saying, “Quite simply, mortgage advisers are turning to Mortgage Brain as they see us as the best and most reliable sourcing system on the market and one in which they can confidently place their trust.”

Premier Plus+ is Mortgage Brain’s new and innovative mortgage sourcing system, which guarantees product data to give intermediaries complete confidence in the advice they give their client.

  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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