After the last few years have been spent with most first time home buyers spending their time saving instead of purchasing because of high LTV’s on most home mortgages many home buyers are starting to feel relief as some lenders are offering 5% LTVs.

Five years ago there were hundreds of different 5% LTVs for homeowners, allowing first time home buyers to easily jump onto the market, but as mortgage rates continued to fluctuate and the credit crunch hurt lenders everywhere these deals slowly dropped off the radar, until now.

The fact that such low LTVs are on the market at all in 2012 is quite a surprise as most brokers called for sharp increases in mortgage rates and tighter credit restrictions due to the unstable economy and the looming eurozone crisis.

However, those seeking to buy may just have some ground to stand on if they can get out there and take advantage of the surprise that the first few weeks of 2012 have offered them, because if there is one thing for certain, it is that low rates and low LTVs are not going to last much longer.

Leeds Building Society was one of the first lenders to offer a mortgage with a 5% deposit attached to it. Of course, it also comes with an interest rate of 5.25% which is pretty high considering the average best mortgage rates that are out there right now.

It also has £999 attached to it in fees, but for those that will never likely be able to scrape together an LTV that is 75% or more this is a fantastic way to get a step onto the property ladder and get some equity built up to make future home purchases a bit less stressful.

Ipswich and Newcastle building societies also have 95% LTV deals on the market that were introduced last week and John Charcol the broker stated that they will also offer a low deposit home purchase scheme at the beginning of February aimed at helping first time home buyers out.

On the other hand, buyers that can manage a 90% LTV should take a look over at HSBC and their low 3.84% which can be a significant amount of savings for those that can afford a bit more upfront on their new home purchase.

Crystal Mortgages, a Walsall based firm, is hailing 2011 as an ‘outstanding’ year that helped the company to grow in strength.  The company prides itself as being an independent commercial mortgage finance loan specialist offering a vast away of lending choices for those who are considering investing in commercial property.  Over the course of 2011 the company has announced figures that show they completed about 37% of all applications and brought in £250 million in new business mortgage applications.  While most of the mortgages that the company receives are commercial property based, they also offer some buy to let products to interested consumers

The average loan size offered from the company did decrease by about £20,000 which is against the national trends that saw average loan sizes increase year on year, but the small drop was allowed for by the company given that they saw a 13% increase in the amount of applications they received by those interested in securing a commercial mortgage. A few huge deals also helped such as their largest completion mortgage that was £1,177,500 that had a turnaround from the time it was in the application stages to the market in just 35 days.

Senior underwriter for Crystal Mortgages, Roger Dewsbery, stated that the figures are outstanding and indicate that 2011 was one of the best performance years for the company.  He added that the company continues to work on improving their finance options and offering bridge loan products to help clients that previously may have had problems securing funding.  In order to help continue to report strong mortgage numbers the company has a few new products on the market for 2012 some of which offer some reasonable mortgage rates given the fact that many High Street Banks are starting to raise theirs.

One of the new products offered by Crystal Mortgages is their sitting tenant discounts that allows businesses with solid accounts to help get as high as 100% of their purchase price if the tenant  is buying the premise that they want from their landlord.  They also have a full portfolio of buy to let products that can offer loans as high as £10,000,000 and as low as £25,000 to investors that are looking to bulk up their portfolios are reasonable buy to let mortgage rates.  For those within certain sectors such as vets, doctors, and pharmacies there are also a wide array of products available.

Although the Bank Rate has stayed stable at .5% over the past few years, mortgage rates are still increasing, and over the past few months they have increased noticeably as many people fear that there may be a second banking crisis within the UK.

Senior technical manager for John Charcol, Ray Boulger, stated that the cost of variable mortgages and fixed mortgages set at low rates have continued to increase as a result of the Eurozone banking sector which forced lenders to charge more for their loans. However, even with rates on the rise, there are some fixed mortgages out there that are worth taking a look at by potential home buyers looking for a great deal.

For instance, Newcastle Building Society announced a new two year fixed deal that starts at 5.95% for a 95% LTV that can be an excellent choice for first time home buyers that cannot afford a large deposit.  The loan does come with a £995 fee, but for those who need a bit more help there is a 6.25% fixed rate deal that comes without any fee and an offer of £300 cashback.

On the other hand, those that are in the market for a remortgage and have not yet switched their mortgage, but want to lock down the best mortgage rates before they jump up, a deal from HSBC may be worth checking out.

This is due to the fact that HSBC has a life time tracker that starts at 1.99% above the current base rate and will maintain this rate for life and is available with a 65% LTV. There aren’t any fees attached to this deal and there is also no charge for early repayment, making it an attractive deal for those who want to maintain some sense of security.

Finally, those that want a bit more security than banking on the Base Rate may want to check out a two year fixed mortgage from Chelsea Building Society that comes with a LTV of 85% and a mortgage rate of 3.69% with a £395 fee.

On the other hand, chantey Economic Building Society offers a five year fixed deal to borrowers that want a longer term with a 4.4% rate and the same 85% LTV.  Included in the later offer however is free legal work or free valuation making it worth checking out.

There has been a lot of concern in the news about the housing market starting to stall again as mortgage rates slowly inching back up due to economic concerns.  This has led many to fear that the market for first time home buyers may get even worse, making the dream of owning a home something that will completely disappear.

However, banking giant Nationwide has stepped up amidst the fears to tempt first time home buyers back into their doors with an offer that is hard to beat, compared to what is currently out there on the market. Right now, Nationwide is offering a first time buyer a two year fixed mortgage term set at 5.59% that only requires a ten percent deposit.

The low LTV should help encourage those who have thought that fixed mortgages were out of their reach, but there is an attached £900 product fee attached that can still be a bit intimidating.  However, for those that need a little more help the product fee can be waived if a homeowner chooses the higher priced mortgage set at 5.69%.

Outside of the new deals for first time home buyers, Nationwide is also offering a handful of deals to other qualifying customers, as well as including a five year fixed rate term that is set at 3.59% with an attached LTV of 70%.  This deal comes with a £99 booking fee and a £900 product fee and is open for remortgages, existing customers, and for home purchases.

For those without the ability to pay the fees the same deal is available with just the £99 booking fee and a £400 product fee although the rate is set a bit higher at 3.79%. Head of mortgages for Nationwide, Martyn Dyson, stated that the banking institute is hoping to support the housing market by offering more 90% LTV mortgage deals to those who need a leg up in the mortgage market.

Dyson announced this is why they now have two year products for those who need a 90% LTV with two-five year terms. Given the fact that most banks are getting stricter with their lending criteria, this is excellent news for anyone that is in need of a great mortgage to purchase their first home.

With many people looking into the New Year hoping for improved mortgage prospects, the figures from the last quarter of 2011’s housing market have been released, shining what is hoped to be a little light at the end of the tunnel for those that have been reading the experts warnings that the housing market may collapse again.

Now that mortgage rates are steadily starting to increase once more, and the Eurozone crisis has made lending criteria a bit stricter again due to the high costs of lending between banks, many potential home owners are wary of approaching the market.

However, some lenders have been working hard to help lenders secure a home either by offering special deals via conventional means or introducing new programmes like equity loans that proved to be successful during November of 2011.

In fact, while many financial experts believed that lending approvals would drop harshly in November as a result of the Eurozone crisis, they in fact jumped up to the highest that they have been over the past two years showing an increase of 4%.  This could be due to the fact that banks are now working harder to publish attractive mortgage rates, or LTV’s, in an effort to draw more home buyers through their doors.

Overall, the figures proved to be 15% when compared to the amount of mortgage approvals in November of 2010 and low LTVs valued at less than 15% actually made up 13% of all of the lending that was approved during the month.

Some experts believe that the increase is the result of the banks altering the way they lend to accommodate the new needs of lenders in today’s economy. Another reason may be that buy to let mortgages were up as landlords have started to take advantage of the renting society to get a larger cut of the market.

Despite this fact, the Council of Mortgage Lenders is still concerned that gross mortgage lending rates are going to be down when compiled for all quarters of 2011, and not just the last quarter, and expects to see gross mortgage lending over 2012 continue to drop.  In fact, the CML dropped its estimate for gross lending in 2012 to £133 billion which is a large drop from its previous prediction of £150 billion, as the weaker economy is expected to drag down the housing market.

Although most people are expecting house prices to drop in 2012, buy to let investors are anxious to see the year start because for them this is the prime time to jump in and make a profit out of the depressed housing market. However, the Royal Institution of Chartered Surveyors has put out a warning to those thinking about taking advantage of buy to let mortgage rates and low house prices that they need to be careful when considering purchasing properties that are in older in age.

High inflation, low mortgage rates, increasing rents, and low high prices are all reasons that many landlords are considering acquiring more properties. In fact, the Council of Mortgage Lenders put out a report that listed buy to let loans on the rise with almost a 16% shown over the third quarter of 2011, making up about 12% of all new home purchases.

With this in mind, it is no surprise that more landlords are thinking about taking advantage of the conditions to get more rental income out of their businesses and continue to rake in profits as the society leans more towards a rental society. However, as many people are not selling and there is a shortage of houses available with fewer sellers willing to sell at the low prices there has been a lot of competition among investors competing for the lowest buy to let mortgage rates and for property.

As a result, many are looking at properties that need work instead of at properties that are already ready to be rented out. The RICS  is warning that these properties may need a lot more than just a new bathroom or a little redecoration because old homes often come with surprises of their own. Some of the typical problems that come with purchasing an older home include blocked drains, dry rot, fractured support beams, subsidence, and rising damp problems.

In fact, the Building Cost Information Service estimates that some private landlords could end up investing tens of thousands of pounds extra to fix up an older property, making their great deal not so great in the end.  Therefore, RICS is telling potential landlords to take a close look at the properties and make sure they have a thorough investigation performed before finalising their lending deal to avoid problems down the road.

As the average mortgage rates continue to increase over the course of December many brokers now fear that repossessions and foreclosures will also start to increase as homeowners find that their mortgages are no longer affordable.

Just a few months ago many people thought that the standard variable mortgages were the best on the market, given the low interest rates that were attached to them, but now due to the Eurozone crisis many banks are increasing their rates and adding on more fees to cover the costs of higher lending, thus hurting those financially who did not get onto a fixed mortgage product.

Many people passed up fixed mortgages in an effort to take advantage of the low rates, but according to the FSA this has come back around to hurt many as a new survey from the Financial Services Authority reveals that foreclosures have increased by about 6% over the year up to the end of September, when compared to figures from last year.

As the Eurozone crisis continues most expect that the rates will increase even higher, causing many more to face foreclosure as they can no longer afford their monthly payments. This is disheartening news as in November the CML (Council of Mortgage Lenders) stated that they might be able to lower their foreclosures predictions that were originally set at 40,000 for the year down to a much smaller 27,500.

However, these statistics only take into account mortgages that are regulated whereas the FSA data includes both unregulated and regulated mortgages; which causes the number of foreclosures to increase quite a bit. Especially at risk are those who have tracker mortgage rates as they are likely to see their monthly payments jump the most over the next few months since the rates are set by the banks and not set on the base rate.

Director of ‘Your Mortgage Decisions’, Dominik Lipnicki, stated that if the economy starts to fall even more those who live in areas where house prices are down, and employees of the public sector, will be at the highest risk of foreclosure and repossessions. He added that also at a high risk are any people that cannot get off their SVRs as many lenders continue to hike up their rates and will likely continue to increase prices over the next few months.

The Eurozone summit is something that the entire UK will be watching, given the fact that if something is not done the Eurozone crisis will continue and increase the average mortgage rates. The Bank of England may be keeping the base rate down low at .5% for the next year or so, but home owners should not start feeling too secure yet because lenders can play with rates in other ways that will still impact the amount that they will end up paying each month.

Over the last few weeks mortgage rates have been slowly increasing and it is expected that if the eurozone crisis gets any worse then the rates will start to increase at an even larger rate, making it harder for home owners to get their hands on a rate that they can actually afford.

In fact, just last week both ING and Nationwide chose to increase the rates that they attach to many of their most popular deals and near the end of the week the Chelsea Building Society did the same thing, increasing its tracker rate to1.69% above the base rate scaring many that thought they would be safe with a SVR over the next few years.

One of the top reasons that the best mortgage rates are now disappearing from the offers by the top lending agents is the fact that wholesale rates are continuing to increase as there are many fears that the eurozone is about to collapse, taking down the interbank trading system with it.

The wholesale rates are what actually determine most fixed and tracker mortgages as it is deemed more important than the bank rate. Therefore, even if the Bank of England does not alter its base rate mortgages will still continue to increase.

The reason for this is because most major lenders depend on the wholesale money markets in order to continue to hand out loans, but over the last few months the wholesale money market has tightened its lending criteria out of concern for the Euro crisis.

This has forced banks to once again tighten their conditions to offer mortgages; which is making the cost of borrowing much higher than it was previously.  In fact, the three month Libor rate is now up by about .3% in just a few months, and is expected to continue to increase.

One large surprise that has come out of the banking crisis has been the acceptance of major lenders to offer a bit of forbearance for customers that may have been hit by their own financial crisis by offering slightly altered repayment terms to loans in order to get through the difficult times without facing foreclosure.  In fact, the amount of altered loans for those with fixed mortgages and other types of mortgages is one of the reasons that mortgage arrears numbers may actually be down for the first time in years.

The Financial Services Authority claims that this leniency has helped to reduce the amount of homeowners that are thought to be in distress since the lowered or adjusted monthly mortgage rate has helped allow them to actually keep up with their mortgage payments instead of falling behind and losing their homes.  An analysis conducted as part of the Financial Stability Report as issued by the Bank of England reveals that the amount of mortgages arrears across the UK would be as high as the levels that were seen in the middle of the nineties if lenders had not decided to work with customers in trouble by rescheduling or reducing their monthly payments.

In fact, the FSA reported that around 5-8% of the fixed mortgages in the country would have been subject to some type of forbearance action with about 5% of customers potentially facing foreclosure due to the fact they would be behind by more than six months of payments.  The rate right now for arrears is estimated at about 1.2% which is surprisingly low despite the economic recession and the amount of unemployment that is spread throughout the UK.  However, the FSA states that this rate would be set at 1.7% of banks were not so lenient with lenders.

The FSA is concerned that some banks are not hiding their losses by not taking into account the provisions they have made that have caused some losses as a result of deciding to restructure loan repayments.  However, the FSA did admit that it has not yet decided if the banks are doing enough to help struggling home owners stating that it is important that major lenders continue to work with consumers faced with difficult situations instead of just letting them default and then lose their homes.

Many homeowners and those with buy to let mortgages are now facing a very dangerous combo of increasing mortgage rates against lowered house prices as the eurozone debt crisis continues to make a deeper impact on the UK economy.  Many banks are increasing the price that they have attached to their home loans as they are forced to find ways to increase their funding costs in an effort to cover the riskier funds that are invested in the foreign market banks that are now losing their stability.

In fact, for some people the average three year mortgage deal has jumped up by as much as £1,200 over this week making a home loan that was once affordable suddenly one that is going to force them into foreclosure.    Experts fear that the problem is only going to get worse for those who have tracker mortgage rates as there is a very high potential that some banks will be forced to increase their standard variable rates by a large amount which will affect the four million homeowners that are currently on SVRs due to the low base rate.

The problem is that mortgage rates set on the base rate will not raise any higher than the Bank of England rate does because they will have to increase at the same increment, but a bank can alter its own SVR at any point and at any increment based on their own discretion which will leave a lot of homeowners that thought they were at a good rate out in the cold and struggling to make the new monthly payment fit into their budget.  In fact, the number of people on SVRs right now is at a high as most homeowners have rebuked a fixed mortgage in favor of keeping in line with the lower SVR and the logic that the base rate would not increase for at least another year if not more.

To make matters worse, most sellers are now being forced to slash their prices with figures from Rightmove the real estate agency revealing that every UK region saw its home prices fall over the month of October.  According to Rightmove, this is the first time that the UK has collectively seen all of its home values fall since 2008 making the average 3.1% drop monumental.