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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.

Avoiding percentage-based remortgage fees more difficult

[ Posted September 13th, 2009 ]

Banks and building societies have long been criticized for the high application fees they charge for mortgages and remortgages.

Many times these fees are added to the total mortgage debt (adding to the interest one has to pay), and increases the cost of the loan by thousands of pounds. They do it because it is one method for them to stay profitable, but for the consumer, it can make loans difficult to acquire or pay off.

The website MoneyExpert has recently reported that mortgage lenders are intent on applying fees based on a percentage of the loan they are providing.

MoneyExpert is especially warning those remortgaging to take account of such charges and be aware that over the past twelve months there has been a 14% rise in the number of products demanding a percentage rate. According to the price comparison website, mortgages with percentage fees now account for 49% of the market, with lenders charging between 0.4% and 2.5% of the value of the loan. This study also reported a decrease in the number of fixed-rate deals charging a set fee, from 57% to 51%.

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.

First Time Buyers Ask More Questions

[ Posted August 13th, 2009 ]



Unbiased.co.uk 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 Unbiased.co.uk 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.”


Unchanged Base Rate

[ Posted August 6th, 2009 ]



As many expected to happen, the Bank of England Monetary Policy Committee (MPC) voted to keep their interest rate held at 0.5%.

This rate has been unchanged since March and because of the recession, many believe that this rate will remain unchanged for the rest of the year, according to Moneysupermarket.

According to the company, “Demand for fixed-rate mortgages has been strong as borrowers have sought to lock into a fix while interest rates are at their lowest. Fixing was particularly popular in spring, when the average fixed-rate deal was the lowest it has been since the start of 2004.”

Rates on tracker mortgages are directly linked to the base rate, so in many cases, you’ll find a lower rate available on loans. This could change however if the base rate changes then the tracking rate will likely go up accordingly.

Borrowers seem, at least at this time, to prefer a fixed rate mortgage because of the stability of the loan payments for the length of the loan.

Moneysupermarket says, “You need to think carefully about which type of mortgage is most suitable for your needs. Fixed rates give security, particularly if you need to budget carefully, as you know exactly what your monthly payments will be for a set period of time. In such circumstances, it’s worth fixing, even if you seem to be paying a premium for doing so, because of the peace of mind it gives.”

Keep your credit score in good shape and the chances are better for you to receive the type of loan that you want for the property that you have in mind.


Mortgages in the Czech Republic

[ Posted August 1st, 2009 ]



It has become easier to find a mortgage in the Czech Republic over the last several years. The addition of their currency to the European Communities and a stable government are just two of the main reasons that over the last several years it has become easier.

It should be kept in mind by buyers that funds for the property is not to be available until the property is complete in construction and the home has been legally registered in the community.

Loans are somewhat hard to come by at times although mortgages are available for residential property purchases. You can also find a remortgage if you plan to repair or upgrade homes once you own them.

If you are non-Czech nation then there are extra steps that you must go though. Your citizenship must be with an EU country and it will be necessary to buy through a Czech Limited Liability Company for the proper process.

You must also provide the bank with certain documents such as copies of passports, proof of income, a declaration of outgoings, p/60 Tax return, 3 bank statements, a purchase contract and a reference letter from your current Bank.

The minimum mortgage that most companies in the Czech Republic is usually around 5 years with the maximum at 20 years. You can purchase property up until the age of 70.

Lenders in the country are currently charging mortgages rates that range between 6.32 and 7.05% as a norm, with a maximum of 3 years interest only period. The loan must not exceed 40% of your monthly income according to most standards.

Although it might be hard to secure a loan in the country, it’s not impossible if you’re willing to do the extra work.

 

 

Bank Of England Shows Increase

[ Posted July 30th, 2009 ]

The Bank of England shows new statistics that are enlightening for the mortgage industry. The number of mortgages approved between May and June of 2009 were up from 44,169 to 47,584, according to their records. This is the highest level they’ve recorded since April of 2008.

June also displayed statistics that proved that remortgages improved as well to 35,011 however the amount of these types of loans was below average for the last six months.

The bank showed that June’s net lending total was 343-million pounds which was barely ahead of May’s figures, which had shown to be the lowest on the record books.

The Council of Mortgage Lenders made comments on the data saying that it was effectively stagnant.

Paul Samter, a CML economist said that this outlook was positive than it was earlier however he said that it was still somewhat sluggish.

He continued by saying, “Overall, these numbers are consistent with our outlook for a gradual improvement from historic lows following the financial system turmoil last year, but for any recovery to be slow and drawn out.”

Abbey Offers New Rates For A Limited Time

[ Posted July 19th, 2009 ]




Abbey has a new offering that those looking for a competitive fixed rate mortgage may be looking for. It is a four year fixed rate mortgage that has an 85% LTV (Loan To Value) ratio and at a rate of 5.99%.

If you want to take advantage of this deal, simply stop by an Abbey branch or contact one of their representatives by phone. This is for house purchasers and those interested in a remortgage.

There is a 995-pound fee that applies to this loan however there is a free valuation. The company throws a 250-pound cash back on completion. On the other hand, a Remortgage Solution offers free valuation and free legal work for the customer.

Abbey is also starting a four-year-fix if you are a customer with an existing account which comes with a rate of 4.99% and no fee.

There is also a similar plan that is in effect that comes with a 75% LTV over the telephone and through branches of the lender.

The company is also offering another plan that comes with a three-year fix at 4.59%. It has a fee of 495-pounds and is available with a 75% LTV. This is for remortgage customers. You must also be a member of the staff at UK universities. It is sponsored by the Santander Universities programme.

There’s no telling how long these offerings will be made available, so you should contact Abbey as soon as possible to take advantage of them.

Keep The Application Truthful

[ Posted July 14th, 2009 ]



Truthfulness is an important issue when it comes to securing a mortgage for a new or a existing home. Banks hope that those applying for loans are fully disclosing their activities in the best interest of the lender and the buyer as well.

This is not always the case however.

According to the Council of Mortgage Lenders (CML), there has been a rise in the false information that has been supplied to lenders in the applications that they have received. While most of the information that you supply is already available on a credit report, there are instances where buyers are leaving out some information that should be supplied and helpful to the credit decision.

According to CML, some of the information that is being omitted include information on credit card debts, some personal loans, and loans that are carried by a company or individual that doesn’t report it to a credit reporting agency.

Another area that seems to be in omission or incorrect is the information made available on reporting income. Some income sources have been inflated so that the buyer seems to be less than a risk than they actually are. According to CML, there are some folks who are altering facts and figures so that it seems more adventitious for them to receive a loan.

One of the reasons that some folks are doing this is the house prices have bottomed out make it pristine to purchase a house at this time and they are altering the facts so that they can purchase a property at this time. Lenders on the other hand are looking for honesty with the applications so that they can make a true decision upon the buyers ability to pay.

Remortgaging Your Home

[ Posted July 12th, 2009 ]



There are many homeowners that are considering remortgaging there homes as this is one of the best times to do it if the conditions are right. Interest rates from banks all over the UK are offering some of the best rates on the market today.

There are several things to consider if you are planning to do this. The first is the value of your current home. This is driven by the cities and neighborhoods that you live in. Chances are if there are any homes in your direct area that are in foreclosure, the market price that you’ll receive for your home will likely be less than what you paid for it. This may make a remortgage of your home harder to get.

Investments that you have made to your home since its purchase of have a weighing impact on the price that you’re going to be able to get on your remortgage load however, don’t go overboard and place money on improvements that won’t help the price. A stager can often help you in this department as far as placing money where it needs to be spent.

Shop around for the best rates. If your mortgage term is short, you may want to consider a variable rate. On the other hand, if you plan on carrying the load for a long time a fixed rate mortgage is much better. And look around for closing rates, there are some institutions that offer a better rate in this department.

One thing that you’ll want to do is take your time looking. Remortgaging your home should not be a rash decision. You may end up spending more money if try to rush the decision that you make. This is likely one of the most important decisions that you make in your life. 

 
 
 
 
mortgagerates123.co.uk 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, mortgagerates123.co.uk 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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