Lowest Mortgage Rates UK – Lowering The Cost Of Mortgage

Mortgage is the most widespread industry that offered to loan borrowers with real estate as collateral. Mortgage has so many innovations and opportunities that a loan borrower can exploit them for their own benefit. You must have heard and read it elsewhere that mortgage rates are at an all time low. That is true. With growing competition in the mortgage industry getting lowest rates for mortgage in UK is not that difficult.

Yes that is true, but how does one find lowest mortgage rates in UK. Many borrowers are practically clueless the criteria to decide on whether the mortgage rates are lowest or not. When you are looking for lowest mortgage rates in UK, you will see that there is not any one single rate. There is a list of rates. And when you go to different loan lenders for rates, they will give to you several mortgage rates list, sometimes identical sometimes different. “What is going on”? – You think in your mind. Is there any thing as lowest mortgage rates in UK? Yes, there is.

You will come across this message everywhere – ‘go look around lowest mortgage rates’. Look around how? – nobody tells you that. It is like standing on the start line not knowing this way you have to run. Calling loan lenders and asking for lowest interest will be practically useless. Also calling for lowest mortgage rates at different days will give you different rates for mortgage rates are changing everyday.

Who is responsible for getting you lowest rate for your mortgage in UK? Economy? President? Government? Inflation? Discard all the high words! It is you and you are one of the most fundamental factor responsible for finding lowest interest rate on your mortgage. With mortgage borrowers absolutely flooding the market place, mortgage lenders are lowering the mortgage rates to attract more and more customers. How can one attract customers for mortgage? By offering lowest interest rates.

However, it is not that easy. Every homeowner wants lowest interest rates for its mortgage in UK. Lowest rates on mortgage in UK are subject to a borrower’s personal financial condition. Therefore, different mortgage borrowers will have different lowest rate for mortgage. One way to figure it out is to apply for mortgage quotes at different loan lenders. But are these quotes really consistent keeping in mind the fact that mortgage rates are continually changing. Most loan lenders will give you a correct quote for mortgage. A mortgage borrower looking for lowest rate should use APR to compare rates. APR will enable you to know true interest rates on mortgage including the interest, discounts, mortgage insurance and other related fees. This will enable you to get a true quote without any hidden fee which the lender might be concealing behind the lowest mortgage rate claim.

Prequalification is a way of discovering whether for mortgage will also enable you to know whether you are getting lowest interest rates or not. A lender will see your present current income, debt and basic credit history situation in order to qualify you for a maximum mortgage amount. When you find lowest interest rate for mortgage in UK, you can lock in your interest rate. A lock means the lender will lock in the lowest interest rate and points for a specific period of time that is usually the time during which the loan application is processed.

Lowest interest rates in UK are possible if you have good credit history. A good credit history has innumerable benefits in the loan market. Also lowest interest rates are possible adjustable rate mortgage. Adjustable interest rate mortgage in UK have interest rates lower than traditional mortgage. Also loan term of a mortgage should be lesser. A 15 year mortgage will mean lower rate of interest than a 30 year mortgage. A shorter loan term will always save money.

No other single factor has so much effect on your mortgage as mortgage rates. Getting a mortgage in UK at lowest rates will mean that you have agreed to all those who asked you to get the “best mortgage deal”. A little decrease in interest rates would mean big in terms of savings. There is loads of information available on internet to know how the market is currently fairing. Don’t settle for the first mortgage rate you stumble upon because they seem lowest. Go to different mortgage lenders. And then decide. Lowest rate for mortgage is not the only factor to look out while mortgaging for but it certainly is one of the deciding factors.

So while you are jumping frantically from one site to another in order to get lowest interest rate, you forget that it will need some patience and hard work. Like all good things it won’t come easily. Lowest rates for mortgage in UK won’t be served on a platter. No way. If you had enjoyed doing homework in school, looking for lowest interest rate won’t be a problem. Look around, study research, read and you will find mortgage rates not only lowest but surpassing your own mortgage rate arithmetic.

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Online Mortgage In UK - Introducing The Best Mortgage Plan Across UK

Add the term ‘online’ and it will open for you an exhaustive assortment of opportunities. Add online to mortgage and it will have the same effect. So many people want to get mortgage programme and get with it fast. The online mortgage in UK indisputably takes lesser time and simplifies the entire procedure. Online mortgages have furthered favourable association of circumstances for any mortgage hopeful in UK.

The British Banker’s Association has put the figure of approved mortgage as 186,442, making mortgage the largest financial obligation. Online mortgage is the largest undertaking and a very integral part of the loan lending industry. The online trend with regard to mortgages has spelled great benefits for the consumers for it has increased competition among the loan lenders. This shift in the business trend towards online mortgages has provided more control in the hands of the homeowners in UK.

There is huge competition between online mortgage lenders. There are numerous mortgage lenders, all trying hard to offer you a mortgage plan. Its direct result is great mortgage rates and repayment options. Online, you can contact multiple lenders for mortgage and this will enable you to compare rates and also provide you with an excellent opportunity to select the mortgage that befits your requirements.

Online mortgages have certainly revolutionized the concept of mortgaging in UK. Internet has introduced people to a new face of mortgage process totally alien previously. A few years ago, a mortgage would have required you to find a mortgage lender or broker who would be ready to do the leg work for you, who would be willing to compose a good mortgage proposal for you. Without the online process, assembling information and drafting loan programmes would be a very demanding job. There was no way that the people could access generalized information about mortgage and interest rates. Without online mortgage, the alternatives were restricted and borrowers would settle for any mortgage lender.

So, what does the online uprising affect for general homeowner in UK? Advantages – in every way. Online mortgage in UK gives you several instruments to not only understand mortgage but also pick up the one mortgage that fits exactly in your financial configuration. All kind of mortgage information is available online which can be easily accessed sitting at home through the computer. You are exposed to hoards of information about mortgage, online.

With online options, you can actually look at the various deals offered by various UK mortgage lenders. Online, you can access financial tools to make mortgage more in sync with your demands. Financial advice, mortgage rates, mortgage calculator, and comparing mortgages online allow you to achieve the best in respect to mortgages.

With online mortgages, it is highly important to know that inadequate or false information would only work against your chances of finding a mortgage. Accuracy while providing details of your employment, your credit history, income and assets would only put you in a favourable light in front of the mortgage lender. This will help in online processing of your loan application and being approved without any setback. However, be prudent enough to offer your personal financial information only when you are filling the mortgage application form.

A UK homeowner while applying for mortgage online should not settle for the company just because it happens to publicize lower interest rates. Borrowers, applying online, must be careful about the website they are applying at. A mortgage offering website would contain a privacy policy. Go through it, if you have time. Also, confirm whether the website actually exists. A genuine online mortgage lender will have real people answering your questions when you call.

Other things to look out for are upfront fees and read the fine print before you settle on any mortgage deal in UK. Fine print can contain many details that are left otherwise. Ask questions, if you have any doubts. Queries about the online mortgage process – whether there are any fees that will be charged later on, pre payment penalties. If you don’t understand anything or are uncertain, clear them before you move on.

How technology affects our life - you know that. How it affects our mortgage decisions – it is evident through online mortgages. With internet we can access various mortgage product, services, connect to almost all mortgage deals available online. It has enabled us to overcome limitations; it has stretched the possibilities of finding a mortgage beyond the local area. If your local area doesn’t have a mortgage for you, you can shop; go beyond the local boundaries to find a mortgage in any part of UK. With so many mortgage options available online, the chances of your finding a mortgage are undoubtedly bright.

Tag : mortgage,mortgage rates,mortgage loans,mortgage in Uk

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You Will Not Allow Your Mortgage To Go Astray In The Absence Of Mortgage Advice

Mortgage advice works on the principle that not every person has enough knowledge to back his mortgage decision with. A few of them do not have time enough to spend on the decision-making. They will try to supplement this lack of knowledge by discussing with friends and relatives, searching relevant topics in magazines and journals, and talking with independent financial advisors. This article intends to provide mortgage advice through special emphasis on certain important topics.

Type of mortgage

There is a long list of mortgages that are available in the UK now. First time buyer mortgages cater to borrowers who are buying house for the first time. Council tenants have a specially designed mortgage for them in the form of council right to buy mortgage. Then there are mortgages depending on the manner in which interest is charged. These are adjustable rate mortgages and fixed rate mortgages. The list goes on endlessly. Mortgage advice is not limited to explaining the terms in detail. Mortgage advice also includes recommending to the borrowers, which out of the several mortgage products will be most suitable for the borrower, given the special circumstances of the borrower. An independent financial advisor explains and suggests products. However, the final decision is to be made by the borrower himself, and he must not be forced into making selection for a particular product.

Mortgage options

Mortgage options include clauses such as prepayment penalty. Prepayment is the payment of mortgage before its due term. Conventionally lenders did not allow premature payment because they would lose on the interest part. Prepayment penalty usually declines after a period of say 5 years. Some lenders accept to amortise the mortgage beforehand. Borrowers must carefully read the terms and conditions on which the mortgage is being entered into. Clauses that allow or disallow prepayment must be discussed with the mortgage provider in detail.

Term of repayment

The term of payment of the mortgage has a two-sided effect. On one hand, it effects the monthly instalment. On the other hand, the interest cost is affected. Therefore, while you can lessen the monthly instalments by extending the term of repayment, you are adding to your interest cost. The term must then be decided accordingly. Interest only mortgages, where only interest is paid during the life of mortgage, has the longest term. Typically, mortgages are available for a period of 30 and 15 years. 15 years term is the best one can get because the rate of interest will be the lowest. The rate of interest increases with an increase in the term of repayment. Mortgage advisors recommend the term for which a borrower must extend repayment after studying the borrowers financial condition. Mortgage advisors also suggest alternative repayment options to further save on the interest.

Fees

You take up a mortgage and are handled a list of fees that you will have to pay as fees to enjoy the loan.

Mortgage advice helps you distinguish between fees that are justifiable and those which are not. Fees in the field of mortgages are referred to as points. Thus, where a fee of 2 points is being charged of a mortgage value of ₤100,000; the actual fees payable will be ₤2000. Paying points is like an investment made for getting a better rate of interest. Thus, a greater point paid will lessen the rate of interest. A typical situation arises when the lender agrees to pay certain points to the borrower if the mortgage is pegged at a higher rate of interest. Borrowers who are cash-short can use this as an opportunity to get cash. In this case, the points will be depicted in negative.

Down payment

Loan providers accept down payment from the borrowers as a sign of credibility. When a borrower has his own money locked in a particular property, there is a lesser chance of his becoming late in payments or not paying altogether. The down payment is calculated by deducting the loan amount from the lower of sale price or increased value of house. Down payment facilitates the borrower to have mortgage at favourable terms. Mortgages are available also to those who cannot pay a down payment. It is difficult to qualify for a mortgage without a down payment because there are strict guidelines on the credit history of the borrowers.

Lock period

Lock period is referred to the time for which the rate of interest is kept stable on a particular rate of interest. Borrowers go for locking the rate of interest in order to insure themselves from the constantly changing rate of interest. When the lender is losing on the current rate of interest that is greater than the rate locked, he needs to be compensated. For this extra points will be repayable. Rate locks makes borrowers lose on a further decline in rate of interest. Mortgage advice will be necessary to decide on the time the rate must be locked, the time for which the lock must be valid, etc.

Requirement of documents

The requirement of documents is for verifying the candidature of the borrower for approval. The demands of lenders vary from the strictest “full documents” to the lenient most “no-docs”. As the requirements for documents go on lessening, the interest rate goes up. For a faster approval of the loans, the borrower must have all documents ready.

Mortgage advice source must be decided by the borrower. While some people are good in imbibing knowledge through books, other will need a face-to-face contact.

Tag : mortgage,mortgage calculator,mortgage rates,mortgage loans

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Buy to Let Mortgage Lender Network: An Advantageous Financial Congregation

Buy to let mortgage lender network in the UK is expanding as more and more people are becoming aware of the advantages associated with buy to let mortgage. Buy to let mortgage is a good investment opportunity. You can take mortgage and purchase some property with an aim to earn rental income or capital growth over a period of time. You can also use the rental income in paying off the mortgage.

In UK, there exists a large buy to let mortgage lender network which helps you out in availing buy to let mortgage at competitive rates. You need to put some property as collateral which may be your house, land or any other premises. The documents relating to the title of the property remains with the mortgage lender but the possession of the property always remains with the borrower and he can use it anyway. Once the mortgage is repaid, the borrower gets back the documents.

Since buy to let mortgage is a secured loan, it brings in many advantages for the borrower. You can get extended repayment period, low rate of interest and smaller installments. However, buy to let mortgage involves the risk of repossession in case you fail to repay the installments in time.

A large buy to let mortgage lender network helps you in getting mortgage at cheap rates. You can advantageously utilise the existing buy to let mortgage lender network by requisitioning online quotes. Compare these online quotes from different mortgage lenders and select the best mortgage deal.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Shakespeare Finance as a finance specialist. For more information visit us http://www.easy-buy-to-let-mortgages.co.uk

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Use A Mortgage Calculator To Secure The Best Rate

This article explains a few things about free mortgage calculators, and if you're interested, then this is worth reading, because you can never tell what you don't know.

Mortgage brokers are blossoming in the current environment and are gaining an increasing share of the mortgage market. This is great news because you should consult with a mortgage professional when you're making one of the most important financial decisions of your life. Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. Mortgage companies and homeowners alike are eagerly anticipating its arrival.

Mortgage markets in the United States in recent decades have done a remarkable job of intermediation between those different needs. Mortgage servicers are middlemen who process the mortgage payments from homeowners and direct the money to the banks or investors who hold the loans. With the current problems in the mortgage market, banks and the federal governments have reached consensus to help homeowners, but often the mortgage servicers, having the ultimate power to modify a mortgage, refuse to "play ball."

Now that we've covered those aspects of free mortgage calculators, let's turn to some of the other factors that need to be considered.

Mortgage arrears, County Court Judgments (CCJs), defaults or bankruptcy are all troubling points, and so, prior to making their decision, the lenders will consider these also. This information is held by credit reference agencies, and can take up to six years to clear. Mortgage bankers may also service mortgage loans (maintain the loan accounts and collect mortgage payments). Some mortgage bankers may also broker the loans of other companies.

Mortgage brokers do not work for one particular lending institution while loan officers generally do, there are other differences that may affect the type of loan that you will be offered. The easiest and simplest way to understand the difference between a mortgage broker and a loan officer is that a loan office works for you bank and will help you secure a loan from that lending institution and a mortgage broker will search through many institutions to find a loan that works best for your situation.

Mortgage debtors can be included in the aid program from January 1 of this year, until the end of 2010. The program itself will exceed this period. Mortgage rates thus, it will ensure a sound completion of the mortgage process and leave you at peace for the rest of your life.

It never hurts to be well-informed with the latest on free mortgage calculators. Compare what you've learned here to future articles so that you can stay alert to changes in the area of UK mortgages.

Tag : mortgage,mortgage calculator,mortgage broke,mortgage rate,mortgage loan

Million Pound Mortgages On The High Street - Maximum Mortgage Limits

Finding and arranging a large mortgage used to be easy. Lenders used to fall over themselves to arrange a million pound plus mortgage and many had specialist high value departments who offered a premium application service to their well healed prospects.

Falling house prices, funding issues, bank closures and mergers and the FSA’s proposed guidelines on income requirements and interest only mortgages have left a gap in this market and many people looking for a large mortgage come up against barriers which can turn even the most simple application into a major challenge.

Over the next few weeks, Enness Private Clients will explore each of the issues and give some useful guidance along the way. Topics will include income requirements and self certification, interest only mortgages, property types, buy to let mortgages and offset mortgages

We will however start with:

Maximum Loan Amounts

Funding constraints caused by the drying up of the wholesale credit market and increased capital requirements have left lenders short of money to lend. This has been well documented and government intervention was required to (some say not fully) improve the situation.

As a result, many high street lenders imposed limits on the maximum mortgage they will grant, instead focusing on a higher number of individual mortgages which both spreads risk and improves profitability (Ten £100k mortgages will generate 10 arrangement fees, One £1m mortgage will only generate one arrangement fee. The margin on the loan will be the same).

A quick survey of the high street lenders and their published products shows the limits - Nationwide £1m, Santander £1m, Woolwich £1m, Coventry £1m, Birmingham Midshires £1m. Some of these lenders will exceed their published maximums in some circumstances, but the application will have to be strong, the loan to value below 70% and occasionally there will need to be an existing relationship between the clients and the bank.

A one million pound mortgage is a lot of money and will require an annual family income in excess of £200k - so this is not a problem which affects or is an issue to very many people. There are however more than 132000 properties valued at more than £1m in the UK, an increase of 393% in the last decade (The Independent, 11 July 2001). There is therefore a solid market for these mortgages

So where are these lucky individuals getting their mortgages? This has been a major shift in the market and is the Private Bank who has stepped in to help.

Private banks work on a case by case basis and mortgages over £1m are not an issue if the application supports it. These lenders assess on a case by case basis and the application is often more detailed than a similar one on the high street so the decision to lend is justified. Private Banks are delighted to be collecting so many high valued clients in so much as we have been approached by more than 5 new lenders in the last month who have requested we offer their products to our clients.

The problem for the borrower is that these lenders very rarely advertise (you will never see Coutts at the top of the best buy table in the money section for example!) so access can be difficult. The banks often have minimum entry requirements (such as a minimum asset level) and their criteria is very seldom listed on their website so finding the right one may involve a round of interviews before the client can find one suitable. As a result, the client will almost certainly require the help of a Large Mortgage Broker.

Tag : mortgage,mortgage calculator,mortgage rates,mortgage refinace

Bad Credit Second Mortgage Loan: A Good Answer to all Your Financial Demands

Bad credit second mortgage loan is like exchanging your first mortgage for a new mortgage. But, the question may arise in your mind why you should go for remortgage while continuing your first mortgage? The basic and primary reason is to save money i.e., getting mortgage at low rate of interest. Bad credit second mortgage loan can be used for many purposes like home improvements, debt consolidation, children’s education, holidays, etc.

For persons having bad credit record, bad credit second mortgagecould be the best option. Though bad credit pose a great problem in getting loan approval and people face a lot of problems and hassles. Lenders have specially designed bad credit second mortgage to avoid hassles for persons with such problems.

Owning a home does not solve all your problems. Your needs and desires will always knock your door. You have to fulfil all your needs and desires to be happy in life. In such a situation, second mortgage i.e., refinancing is a good option. If you have a bad credit then bad credit second mortgage is always with you to satisfy all your needs and wants.

As bad credit second mortgage is secured against your property, you will get competitive interest rate on the lower side for your second mortgage.

Apply for bad credit second mortgage and fulfil all your needs and wants. Get rid of financial crunch and feel happy.

About The Author
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assistingBad-Credit-Mortgage-Choice as a finance specialist.

For more information please visit: http://www.bad-credit-mortgage-choice.co.uk

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4 Steps To Achieving The Largest Mortgage Possible On Your Circumstances.

Many mortgage lenders in the Uk have moved to ‘affordability based lending’ from the traditional ‘income multiple’ Essentially, the lender will subtract your total monthly expenses away from your total monthly income - the amount that is left must be enough to cover the monthly payment according to their calculations.

For many, the maximum mortgage available from a particular lender may be difficult to establish – some lenders have tried to improve certainty by publishing ‘affordability calculators’ on their websites, but to get the right result you need to know what to put in the boxes in the first place.

1 – Credit Commitments

Always declare the exact amount you have outstanding on loans and credit cards (remember HP agreements and car loans), the monthly payment and how long is left to run on your agreement.

The monthly payment on a loan or minimum payment on your credit card (assuming a rate of around 5% of the balance per month) can have a major affect on the affordability calculation. If your loan has less than 6 months to run, or you are able to settle in full some lenders will not include the payment in their calculations

2 – Income - if you are Employed

Being as precise as possible on your income is very important, overstating is never wise and not being accurate is just as bad. Always use the numbers off your payslips, bank statements and your and P60 as this is where the lender will look for evidence of your income.

If there are deductions from your salary other than tax & NI (season ticket loan or a pension) make sure you mention these at the point of application - some lenders may deduct these from your income and some don’t. Being accurate at the outset will reduce the chances of a lower mortgage offer than you expected which could cause problems if you are aiming for your maximum mortgage.

Bonuses, overtime, commissions and second jobs are used at different rates by different lenders. Most will only accept 50% (less for annual bonuses) and there will need to be a track record of usually a couple of years. Again speak to your broker or lender for advice.

3 – Income – if you are self-employed

You may be surprised to hear that self certification and fast track mortgages have become slightly more difficult to find. All this means in reality is that you will have to do a little more work than finding a broker who was stupid enough to make up your income for you!

If you are self-employed lenders will want to see at a minimum your last 2 years tax returns and SA302s (as your accountant if you don’t know what this is.) Typically they will average the last 2 years taxable income and use this figure as the start point on their affordability calculation.

If you are a director of a limited company (or partner in an LLP) the lender will, in most circumstances, use your salary and dividend (or net drawings) not your share of net profit. This distinction is very important (unless you own more than 51% of the shares in which case the rules are different).

Our advice is get your accounts before you apply and read through them. Alternatively, ask your accountant to write down your net profit, salary, dividends or drawings for the last 3 years on one page so you can see them.

If you are self-employed, getting advice from a good broker will make all the difference – many of the lenders we speak too still cannot read a simple set of accounts and some of the better ones will be able to convince a lender to use retained profit or accountant’s tricks in their calculations/

4 – The Mortgage Term

How much you can borrow depends on how much you can pay back per month. Your monthly payment depends on how long you arrange your mortgage over. Lenders (almost) always base their calculations on a repayment basis to your retirement age. Before you apply find a mortgage payment calculator and find out how much your mortgage will be over various terms and find the one which is most suitable to you.

Remember – the longer the term, the more you can borrow. The shorter the term, the less it will cost you in interest. The latter is the most important.

Remortgage Watch October 2010

What is the Current Base Rate Outlook?

With the news from over the pond that the Federal Reserve will again look to return to quantitative easing to stimulate their economy, and also recent comments from Adam Posen (MPC member) that he believed the UK needed to engage in Q.E. to avoid a prolonged slump, it seems ever more likely that Bank of England will follow suit.

The anticipation seems to be for this to happen in the first quarter of next year. As a result the markets have pushed their base rate increase forecasts back further still, unto the 3rd or 4th quarter of 2011. It seems the belief is that the actions of our American cousins combined with the upcoming fiscal squeeze from our very own Chancellor next month (with some £83 bn worth of cuts on the agenda), that rates need to stay lower for longer.

What Should You Do Now?

For those with mortgages this is of course good news as we should see rates, and therefore payments to continue to remain low for the foreseeable future. However, it cannot last forever so there needs to be a number of considerations before identifying the right time to re-mortgage. Generally speaking the mortgage market moves 6 months before the base rate moves so the following should be contemplated;

• First house prices have eased off in the last 3 months. Some analysts are predicting further drops so if you are on the cusp of a notable loan-to-value tier (60%, 70% and 75%), be aware that rates move up at each level, but significantly so above 75%. If you have concerns over your house price and the base rate then be aware of these tolerances.

• Second the validity of re-mortgage offers will differ from lender to lender but there are lenders that will keep the offer open for up to 6 months. Given that we can drag the application period for a month or more if necessary, you can secure an offer 6-8 months before you think rates will move.

• If you plan to hold off for a while make sure your credit is AAA. Any small misdemeanor at the moment can mean the best rates aren’t available to you.

• If the economy goes back into recession is your job secure – could you be subject to a pay cut or part time hours, therefore making it more difficult to re-mortgage due to a drop in income? If you have any concerns or work in the public sector, again considering your options now might be frugal.
Where Are Mortgage Interest Rates Going?

Speaking to a number of internal treasury departments within the major banks, the message seems to be that they believe tracker rates are currently as low as they will ever be, and fixed rates aren’t far off with perhaps one more drop of circa 10-20 points. However, there has been a lot of press in the last couple of days that lending will become more difficult again in the next few months due to lender’s fears over a double-dip recession and the ensuing unemployment that that could bring.

With rates starting from 1.99% for 2 year trackers and 2.99% for 2 year fixed rates for those who have at least 25% equity in their homes, it certainly isn’t a bad time to consider your options, especially as most lenders SVR (standard variable rate) are higher. There are also re-mortgage and purchase products available for those with 40% equity in their homes to be had at 2.19%.

Tag : mortgage,mortgage rates,mortgage refinance,bad credit mortgage

How The Credit Crunch Is Affecting Mortgage Lending In 2009

The current economic crisis has had a profound affect on UK property developers and landlords alike. A causal relationship between the two means that whilst prospective landlords are not eager to buy property at a time of low lending and credit, companies and individuals at the beginning of the building chain are also not inclined to invest any money in the construction of houses that are likely to remain empty for a long while. Over the last month there have been many announcements and changes within the mortgage lending industry, and so I thought I would discuss the major ones in a simple article.

In the middle of February there was a significant amount of news concerning house prices in the country. Despite the presumption that they would fall, it seems that different (but well-regarded) sources such as Nationwide and Halifax were giving very different statistics on the matter. The problem here is that both banks have varying criteria for their mortgage products and so their results can differ significantly. As a result, Halifax reported that UK house prices had increased by 1.9 percent, whilst Nationwide had shown a decrease by 1.3 percent. Similarly, both banks publish their results at different times during the month (Nationwide publish during, and Halifax at the end), meaning the results are not from exact same time period.

At about the same time, a more certain set of statistics were released by the Department of Communities and Local Government concerning a countrywide lull in building new houses. They reported that the amount of houses set for development (just over 16,000) in December 2008 was 58 percent lower than it was a year before, whilst the private sector statistics were even worse (at 64 percent lower). As expected, lack of finance has been to blame for the biggest decline ever in this area, with little being available for residential and buy to let mortgages also.

More recently however, there has been some good news coming from such banks as Northern Rock and Lloyds/HBOS. In late February, the former announced they had £5 billion to lend in 2009 for residential mortgages, which increases competition in the sector and may be an incentive for others to offer more on the buy to let front. Following this, at the beginning of March Lloyds/HBOS announced they would increase their mortgage lending budget from £9 billion to £12 billion this year displaying a gradual shift in the accessibility of credit for borrowers.

By: David John Martin-11606

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Change In The Air For Mortgage Brokers?

Another fortnight into 2009 and there is a whiff of change in the air. However, for every good news item there is still a sad story of a business failing and more "For sale/let" signboards on the High Street.

On the plus side there is a steady appetite for the APF Auctions which seems to be having some impact on SWAP rates which are lower across the board except for a short session at the end of January. There will be a slowdown in activity over the next few days as everyone waits for the MPC announcement on Base Rate tomorrow and volumes ease in the run up to the double Bank Holiday weekend. In these interesting times, I am surprised that there hasn't been a call for a different expression than Bank Holiday to cover these public holidays!!!

There is also improving evidence that property auctions are selling high percentages of properties at or above guide prices. But then if you've ever been in a Savills Auction with their top man, James Cannon, at full throttle you will know that he is the ultimate proof that you can sell ice to the Eskimos!! However the evidence also comes from the likes of Allsop whose results are live on-line and you can even video stream the auction as it takes place - so much more fun than trying to get credit sanctions from lenders who are reluctant to take your call let alone underwrite a loan application.

The print industry can be used as an early indicator of recessionary trends. As chance would have it I had lunch with the Sales Director of a large print company recently. The bigger issue for them is the cost of paper which is virtually all imported and has shot up in price by more than 50% in the last 6 months. His business covers a wide range of print areas and he is convinced that some very big print jobs are now happening at below cost which will drive more companies into receivership. So UK plc is catching up with the property and finance industries just at the point that we may be bottoming out - it doesn't get much tougher than now!!

Traditionally if there is good weather over Easter, the estate agents have increased viewings and sales follow - it would be nice if we had a steady and reliable range of the
best mortgage deals to help make those happen. So bring on Northern Rock with government money to push into the market and drive competition on lending margins.

By: David John Martin-11606

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Introducing The Two Types Of Homeowner Loans

Homeowner loans generally come in one of two varieties. The vast majority of new home buyers obtain a primary mortgage, or first loan at the point of purchase. As most home buyers do not have the cash required to pay the full amount of the purchase price of a home, financing is obtained. Even for those that do have available cash, financing is often used as the low interest rate tied to secured loans makes it a good way to borrower money. By obtaining a mortgage, the home buyer is giving a lien on the property to the lender in exchange for the loan.

Another common type of homeowner loan, and often the more often referenced form or the two, is second charges, or a loan obtained based on the equity and value of the home. Many existing homeowners turn to homeowner loans as a low rate financing option. Loans are commonly used to fund home expansions, renovations and repairs, vacations, business startups, and other major expenses. Similar to first mortgages, since the property is offered as collateral to the bank in exchange for the loan, homeowner loans are usually available in higher amounts, at better terms, and with lower interest rates.

There are certainly risks associated with homeowner loans. Because the property is offered as collateral in order to secure the loan, the borrower could lose the property if he fails to meet the loan repayment terms and obligations. Despite of this risk, many borrowers opt for the lower rates and more flexible terms associated with homeowner loans. Borrowers with bad credit often do not even have a choice. Many banks require borrowers with bad credit to secure financing with a property.

Another popular and growing use of secured loans is debt consolidation. Revolving debt and credit card debt are on the rise in the UK. As more and more borrowers become burned by high interest debt and multiple creditors, lenders are promoting homeowner loans as a form of debt consolidation. This offers many benefits, especially for borrowers that do have good credit, thus more leverage with lenders. Borrowers can sometimes take debt with multiple creditors at significantly high interest rates, and pay it off with one lump sum secured loan. This reduces the hassle of managing relationships with many creditors and it can also save the borrower significant interest, and even reduce the length of repayment on the debt.

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High Value Mortgages - Using Other Assets As Security

Although the use of non-property assets to assist with land purchases is not new, it is becoming increasingly more popular. In this new era, where equity is king, and cash can sometimes be difficult to realize, offering additional security is a viable alternative for some.

We all have clients that are ‘asset rich and cash poor’ so rather than being a barrier to business, we have sought to innovate and use the private banks more flexible approach to underwriting and wealth management, to gain an advantage for our clients.

Typical assets would be;

• share portfolios,

• cash on deposit (but in locked accounts),

• bonds and stock options where bonuses have been deferred.

• Other property

• Cash not in the UK

We have been asked to consider many asset classes, ranging from gilts, to the more exotic; such as yachts, vintage wine, antiques and paintings. Although this is somewhat rarer it goes to show that banks are willing to negotiate and take a view on what is now acceptable security.

The most frustrating point for us was seeing many deals which had merits but simply weren’t fitting inside the box with high-street lenders. By having direct links to credit committees we have been able to articulate and demonstrate the best points of a case rather than try to go through an automated system.

Although some cash will generally be needed and usually the asset will have to be moved under the lending bank’s management, it allows clients that have a lack of liquidity to access rates and risk profiles that wouldn’t normally be available to those that are highly leveraged.

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