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Leeds Building Society offers intriguing fixed mortgages on a long term basis

[ Posted March 31st, 2011 ]

Leeds has introduced new fixed mortgages that should make those in search of new mortgage deals interested.  The Leeds Building Society announced that they will offer a new fixed interest rate set at 5.99% that will last those who take advantage of the rate until the end of June of 2021.  The rate is spectacular because at the moment it is the only ten year mortgage available that will cover as much as 80% of the LTV allowing potential mortgages to only pay a deposit upfront of 20% minimally.  In addition, the banking society is allowing as high as 10% capital repayments per year without the attachment of any repayment penalties.

Adding more flexibility to the best mortgage rates offered by the Leeds Building Society is the fact that borrowers are allowed to port their mortgage if they move back to another home which will allow for more flexibility in the mortgage terms.  The bank is also offering the mortgage rates without any higher lending charge although regular mortgage fees are attached to the loan including a £8000 completion fee that can increase based on the price of the mortgage and a standard flat £199 booking fee.

The ten year fixed rate period is good news and a great opportunity for borrowers that are worried about the rise in interest rates affecting their variable mortgage rates. By choosing the new ten year fixed mortgage that the banking society is offering they can count on stable repayments despite the fear that the Bank of England will increase its base rate.  In addition, longer term mortgages offer the additional thrill of decreasing the arrangement fees that are required usually when a borrower chooses to remortgage their home.  Bear in mind that while variable rates are lower than 5.999% at the moment, there is no guarantee of the future.

Making sense of the housing market amidst increasing mortgage rates and falling home prices

[ Posted March 31st, 2011 ]

Many people are confused about the state of the real estate market due to conflicting data that seems to come from low home sales mixed with low mortgage rates that are said to be rising soon if the expert predictions are accurate.  However, the best way to sum up the state of the housing market is to say that the news is better for buyers than it is for sellers even with the threat of rising home mortgage rates and the credit crunch keeping loans at bay.

This is due to the fact that house prices are continuing to fall which has made many predict that the housing market may soon fall into a double dip recession.  New figures from the Case-Shiller Home Price Indices reveal that there were year on year declines in home prices in 18 of the 20 suburban regions that are regularly monitored by the indices.  House prices also fell in the ten and twenty city areas that are included with an overall fall of about two percent for the 10 city index and another three percent in the twenty city index which makes many wonder if they should attempt to take advantage of the best mortgage rates.

David M. Blitzer the Committee Chairman of S&P Index stated that there is reason to be concerned about a double dip recession because a few months ago they felt that if the city composites reached new lows after the peak they would be in danger and while both are still above April of 2009 lows, the indexes are continuing to inch lower over the last half of a year and it is not too much father until they do hit lower.  With this in mind, investors may want to swoop in to make purchases while the mortgage rate is still low while sellers may do best to hold onto their properties until the housing market actually starts to make a substantiated recovery.

Paragon announces that now is the time to increase rental prices

[ Posted March 24th, 2011 ]

Paragon has announced to landlords that have buy to let mortgage rates that they may soon be able to increase their rental prices to reflect the new increasing level of demand that is being exhibited.  Group chief executive for the company, Nigel Terrington stated that should be cautious however not to be too overzealous to the point where they make their properties ‘unaffordable’ for renters.  At the same time, he added that a great majority of landlords have already increased their rental income during the first quarter of 2011 without any problems.

Terrington continued to say that the laws of supply and demand show that rental pricing and landlords are seeing a higher demand for their properties at the moment, which may be an indication for those looking at buy to let mortgage rates that now is the time to act if they want to create a new line of income.  Paragon research found that 32% of those who let property have been able to successfully increase their rent rates in the three month period from the first of this year.  This is a step up for the property sector which has been stagnant for most of the past few years hurting renters and those seeking a mortgage.

Research from paragon also shows that about 5% of all landlords have seen their rental income peak by over 8% over the last couple of months which is not surprising as the unstable mortgage rates are leading many to decide to rent instead of buying their own home.  The credit crisis has also helped increase the amount of renters looking for property as many people are unable to secure a mortgage for themselves with the new tightened credit criteria imposed by most banks.  This coincides with a report published by Paragon in February that stated the number of households that choose to rent increased by about a million during 2009./2010 compared to those renting in 2005/2006.

Northern Rock stabilizing with wholesale money market secured mortgages

[ Posted March 22nd, 2011 ]

Northern Rock is hoping to get back into the wholesale money market by taking a stab at issuing bonds that are secured with mortgages.  The bank, which is head quartered out of Newcastle stated that only the best mortgage rates would be considered as it slowly starts to get back into the mortgage market after a period of time in which the mortgage market was considered too unstable to be a safe investment.

The Newcastle banking system ran into trouble back in 2007 because it was too dependent on wholesale markets to provide funding for its mortgage lending which led them close to bankruptcy.  The move that they are making to use bonds to secure their mortgage lending is known as mortgage securitization and is predicted to help Northern Rock raise about £370m which is about 2% of the balance that the bank currently has been able to rebuild.  By securing bonds against any commercial mortgage requests they grant the investment should be much sounder of the banking institute.

The point of securing mortgages by backing them with loans is so that the ban can bundle their respective loans together which can then be sold off to interested investors so that the balance sheets are freed up for the bank and they then have the room to offer more loans to those looking to secure the best mortgage rates.

As of yet Northern Rock has been able to keep their title as a ‘good bank’ since it made the wise decision in January of 2010 to separate from the NRAM which is considered a ‘bad bank.’  To keep their status the bank plans to continue to offer most of its primary fund lending via the process of retail deposits.  Thus, this announcement shows that it is heading back to normalcy with the potential sale.

A Northern Rock spokesman stated that the move is a return for the bank back to usual business and that raising money by investing in the wholesale markets is what every bank should be doing if they operating at full tilt.

Aldermore drops mortgage rates

[ Posted March 19th, 2011 ]

For those looking to alter their variable mortgages to fixed mortgages before the interest fees increase over the course of this year Aldermore has announced that it will off remortgage deals without any completion fees, legal fees, or valuation fees making the idea look even more appealing to those who may not be able to afford a higher interest rate attached to their mortgage.  Remortgaging is actually becoming a nationwide trend as remortgages make up about 66% of all loan applicants as homeowners are attempting to save their homes from foreclosure when interest rates drive up their monthly mortgage payments past their means.

In addition to its offer to complete remortgage deals without any extra fees attached to the service; Aldermore has also announced that they reduced the mortgage rates on their two year fixed mortgage rates down to only 4.98% which is considerably better than it has been.  This same mortgage rate is also applicable for those who are seeking an 80% LTV although those in search of the first time mortgage will be subject to pay a two thousand pound completion fee.  The other associated fees are still waived as part of the promotion to jumpstart their mortgage lending again.

Those in search of commercial properties will also enjoy the buy to let mortgage rates which have been lowered down to 5.88% by Aldermore at a variable mortgage three year term loan.  There are no commerical loans available as part of the promotional offer of lowered interest rates for those who want buy to let mortgages established on a three year fixed mortgage.

Managing director for residential mortgage loans at Aldermore bank, Charles Haresnape, stated that the remortgage market can usually be looked at as the cornerstone of a bank’s business practices but over the last decade the area has needed a kick start to bring life back into the stale property market.  He added that the new offers by Aldermore will hopefully get the banking system back into the right direction by offering people choices that they can afford without any attached fees.

Late Easter depresses mortgage rates

[ Posted March 17th, 2011 ]

As the second week of March comes to a close mortgage lending is still reported to be slow with the housing market falling deeper into a rut and house prices growing stagnant.  Fear of higher mortgage rates and the costs to the economy of increasing unemployment appear to be keeping even those who could get approved from seeking out loans to purchase a new home.  Also adding to the mixture is the fact that with high deposit requirements first time buyers are also passing largely on the housing market choosing instead to rent over purchasing a mortgage.

Over last quarter many felt that the housing market depression was the result in poor freezing winter weather amidst the cuts of the government and unemployment, but now many are blaming the late Easter for the housing market staying in a slump for both the private and commercial mortgage market.  Easter is generally the signal for the housing market to open back up as many starts to think about buying homes and real estate agents noticing a sharp increase in the amount of people who choose to view open homes due to the spring weather that is associated with the holiday.

However, chief economist for the CML, Bob Pannell stated that due to the fact that Easter does not come until the last week of April the pick up that real estate agents usually note about this time of year has been largely absent.  He explained that this year Easter is a full three weeks later then it was last year and stated that it is a known fact that by studying the mortgage trends and home buying rends Easter is generally when people begin to approach the market looking for the best mortgage rates with a renewed fervour.

Between the months of January to February lending overall in the mortgage sector remained stagnant and only improved slightly when compared to lent last year according to figures that were compiled by the CML.  The CML did point out that while mortgage lending is still depressed and at is lowest point that has been seen for almost ten years, remortgaging is steadily continuing to increase as people are in search of fixed mortgages to prevent getting hurt by the increase in interest rates expected to occur this year.

Paying a mortgage is cheaper than renting a home

[ Posted March 9th, 2011 ]

Most people who live in homes that they rent instead of securing a mortgage for themselves end up spending more money even with the increase in mortgage rates. In fact, officials now claim that renting is the most expensive option when it comes to securing a place to live with the way the mortgage climate market is right now.  Officials report that property prices are now finally start to drop and as a result rents are starting to go up higher which will make it more costly to rent over purchasing a home in about 80% of all towns in the UK.

Figures are now showing that even with the current increase in the average mortgage rate it is almost ten percent more costly to let a room full sized home in both small and large towns across the country which is a two percent increase in the letting rate for a home since the middle of 2010.  One of the reasons that property rents are up is due to the fact that buy to let mortgage rates are getting harder to secure making it more of scarcity.

At the same time, first time buyers are having a hard time getting their hands on mortgages due to the credit crunch making it harder for them to look at any other option behind rental options.  In turn, since people are having more trouble securing mortgages for themselves the prices on the property market have dropped as sellers are desperate to unload properties making it hard to deny that those who can get approved should choose to own a home instead of purchasing one.  Of course, the larger problem is the fact that there are many people aware of the fact that buying is cheaper than renting, but unaware to get their foot onto the property market.

London is not the saving grace for the UK commercial property market

[ Posted March 4th, 2011 ]

While many people saw the Royal Institution of Chartered Surveyors (RICS) report that commercial property uptake in London as a sign that the property market and overall outlook for commercial mortgage rates is starting to rise a certain degree of caution should be exercised when stating that the commercial market has bounced back.  This is due to the fact that in the next few months it is highly unlikely that London will continue to exhibit signs of growth due to the fact that the construction industry is still quite fragile and the fact that economic uncertainty is still looming over the country and London heavily.

RICS reported that during the final quarter of 2010 workloads for most construction workers increased with less members of the association reporting a decline in developments, but as a group the survey group believes that the government cuts that are coming up and the lack of bank finance when it comes to securing a commercial mortgage will continue to drown out any demand for new projects.  RICS stated that the headline of the net balance is a bit less negative, but it is by no mean a clear marker that can be used in terms of the regional level of commercial property activity.

The glimmer of hope for the commercial market in London came in the fact that the overall balance of the average construction workload shifted from a dismal -10 to a more uplifting -5.  However, this is only for London as other areas in Northern England, Northern Ireland, and Scotland were not quite as uplifting and there is still no positive sign that the market has bounced back in any widespread fashion which is reflected in the private market as well as people are fleeing towards fixed mortgages.

RICS pointed this fact out in a statement that said that outside of the wide marked difference between regions there was a large divergence noted between the two different property markets.  Within the private sector there was also a slight increase in the net balance, but one quarter of difference is not enough data to secure an actual trend and with the current profit margins and employment outlook in the construction sector the chances of seeing further improvement is not looking too rosy.

Commercial market starting to look up with an increase in mortgages

[ Posted March 2nd, 2011 ]

Over the last quarter of 2010 mortgage lending for those seeking out a commercial mortgage increased showing the largest quarter over quarter increase since 2007 which is a shiny beacon in a property market that has been looking dismal.  While the housing market continued to fall flat, the spike in new mortgages for commercial properties is good news for the economy and for industry.  Accounting for all factors, the Mortgage Banks Association found that commercial mortgages increased by a total of 63% over the fourth quarter of last year compared to the third quarter based on their own originations index.

Overall at the end of 2010 the sum total of earnings from commercial mortgages was $110 billion which is still quite a ways from 2007 when the year ended with a commercial mortgage total of $508 billion.  However, given the commercial property market has been frozen for the last three years the slight thaw in the market is a good sign for most industries and especially within the major markets of the UK.  At the top of lenders for last year were insurance companies who made the brunt of their property deals over the fourth quarter of 2010 versus any time in the last five years.

Although insurance companies were handing out the best mortgage rates to commercial businesses, bank lending was still flat suggesting that investors are now looking for alternative ways to get their funding in the face of the failing lending market.  Investors also purchased a great number of loans via the securities market that was backed by the commercial market over the course of the 2010 which also saw a sharp jump towards the end of 2011 once again reinforcing that developers are now getting inventive when it comes to their funding and based on the figures it seems to be working.

 
 
 
 
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