How Can You Qualify For A Mortgage?
December 12, 2011
In recent times it has become difficult to qualify for a mortgage loan because of the crippling effect that loans have had on the economies of even the largest of nations in the world.
Banks and other financial institutions have made it a point to thoroughly examine the financial status of the borrowers and their capacity to make the mortgage repayments. Only those with strong credit histories and a steady income are considered for a mortgage loan. The greater your credit rating, the better is your chance of qualifying for a mortgage.
So if you do not have a good credit rating, the best thing to do would be to concentrate on improving your credit score before applying for a mortgage loan. Many mortgage companies will require that you have buildings insurance, contents insurance is optional but highly recommended to protect your personal belongings. A great place to start your search for home insurance is http://www.aviva.co.uk/home/.
The credit rating is determined by the borrower’s income, the expenses that are met and the timely payment of dues. If you have been working steadily at the same place for more than two years and have a fairly good income that is twice as high as the mortgage repayment that is made each month and your total dues do not exceed 30 percent of your income, you can be considered as a qualifier for a mortgage loan. However, if your debts are higher than your income or you have a poor credit rating, you may be denied the mortgage loan outright.
If you do not qualify for a mortgage because of these criteria or one of the criterion, the best thing to do would be to improve your credit rating and make timely payments of all your debts. This will help establish better chances for you in the future. Try to cut down on expenses that are unnecessary and can be done without. It is not all that difficult and if you wish to own your own home, being a little stringent on your budget will not hurt.
Fears over home repossessions exaggerated
June 28, 2011
The governor of the Bank of England, Sir Mervyn King, has recently voiced his opinion about rising fears over repossession levels in the UK, branding them as exaggerated. Many are concerned that the UK is in line for a wave of repossession, but King has said that this is something that has been overdone, as interest rates are set to remain low for some time to come.
The governor of the central bank said that now was not the time to increase the base rate, adding that even when interest rates did increase there would be an interim period before this was reflected in borrowing costs. His comments come after the head of UKAR claimed that when interest rates went up there would be a ‘tsunami’ of repossessions across the UK.
Mr King was addressing the Treasury Committee when he said that there was no planned rate increase at the moment because the economy would not be strong enough to cope with it. He added that a rate rise would only be considered if the economy was stronger and unemployment figures were falling rather than increasing. He also said that borrowing costs for consumers were unlikely to increase at the same rate as the base rate.
King said: “The reason we would raise interest rates would be in the context of a much stronger economy with unemployment falling rather than rising.” He added: “It should also be the case that the interest rates that borrowers face should not rise as fast as the rise in bank rate.”
However, in a recent interview Richard Banks, the chief executive of UKAR (UK Asset Resolution), said that the company was being proactive in contacting customers to ensure that they would be keeping up with repayments because of fears over interest rate increases making repayments unaffordable.
He said: “You can see if you don’t do something about it, you can see a tsunami. If you don’t get into the hills you could get drowned by this. If you don’t manage this properly it could get very messy.”
Rents to continue going up
June 14, 2011
A recent report that has been released by the Royal Institute of Chartered Surveyors has shown that rents in the private sector are continuing to rise, which could result in many non-homeowners being frozen out of the property rental market as well as the mortgage market. For some time, first time buyers have been struggling to get a mortgage in the current climate and many have had to turn to private rented properties. However, this soaring demand for rental homes has driven prices up to a point where some people may no longer be able to afford the rent on a property.
The figures from RICS showed that in the three months to the end of April there were 42 percent more surveyors that saw an increase in property rental prices compared to those that saw a fall in prices. The figures also showed that there were 33 percent more surveyors that were expecting property rental prices to continue rising over the coming months compared to those that expected them to fall.
In April property rents reached a record high, with the average rent reaching a staggering £692 per month. In London and the south ease the property rental price hikes have been even more severe. Many people that are unable to get a mortgage to purchase could find themselves in a very difficult situation if they are also unable to afford rent.
An official from RICS said: “Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market. There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.”
Mortgage repayments cheaper than paying rent
April 26, 2011
It has been revealed recently that for the first time in many years it has become cheaper to buy a home and make mortgage repayments than to rent a home and pay monthly rent. For many years it has worked out cheaper for people on a monthly basis to pay rent than pay a mortgage, even though they will not own anything at the end of it all. However, after a very turbulent period in the property market this trend has now changed.
According to recent reports it is now, on average, around £100 per month cheaper to make mortgage repayments on a purchased home than the pay rent on a similar property. The average amount paid out on a mortgage for a three bedroom property these days in said to be £608 whereas the monthly rent on the same property would be £709. Just two years ago the mortgage on the same property would have been £1060 a month whereas the rent would have been £761 a month.
A number of factors are thought to be responsible for the change in costs between renting and buying. This includes the fact that soaring demand for rental properties has resulted in rental costs being driven up and also the fact that for over two years the base interest rate has been at a record low of just 0.5 percent, keeping mortgage repayments down.
One industry official said: “Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing home owners’ disposable income. Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many.”
Loan defaults could increase
April 1, 2011
The Bank of England has warned that the level of loan defaults in the UK could go up over the next few months as a rising number of people start to experience financial difficulties for a range of reasons. It is thought that many people will continue to struggle because of the rising cost of living, which is set to continue over the coming few months. In addition to this rising interest rates, which are expected to increase over the next few months, will further impact on the ability of households to keep on top of their loan repayments.
The figures from the central bank show that there has been an unexpected increase in numbers since the start of this year, and with pay freezes, government cutbacks, soaring petrol costs, rising food prices, higher rents, and potentially increased mortgage repayments if interest rates increase, the figures could continue to rise.
One High Street lender, Halifax, has already clamped down on interest only mortgages in order to try and protect against people defaulting on their loans. It has done this by demanding a 25 percent deposit for interest only mortgages rather than a 15 percent deposit. In its Credit Conditions Survey the Bank of England said that lenders were concerned about “the potential impact of increases in interest rates on default rates.”
With regards to the Halifax move one official said: “By switching from repayment to interest-only, homeowners can significantly reduce their monthly costs which may make the difference between keeping the roof over their heads or falling into arrears and possibly losing their home to repossession. By severely restricting the availability of interest-only deals, lenders may be denying desperate homeowners a vital lifeline.”
First time buyers could get help with deposits
March 25, 2011
As part of the 2011 Budget the Chancellor of the Exchequer, George Osborne, announced a range of new measures that were designed to help different groups, and this included measures that the government has decided to put into place to help first time buyers to get their foot onto the first rung of the property ladder.
Osborne announced the launch of a new equity loan scheme called Firstbuy, and it is thought that around ten thousand first time buyers or more could benefit from the scheme in order to help get them onto the property ladder. Over recent years first time buyers have stood little chance of being able to own their own home because of the lack of 100 percent mortgage and the demand for higher deposits from lenders.
Under the Firstbuy scheme the buyer will only have to save 5 percent of the property value themselves by way of a deposit. The government will then put up 10 percent and house builders will put up the other 10 percent as part of an equity loan, which is deferred with regards to repayment for five years and then charged at very low rates of interest. For first time buyers this could mean the ability to get onto the property ladder far quicker than they would otherwise have been able to.
However, one official was concerned that there could be repercussions, stating: “This seems to encourage first-time buyers to purchase property with very high loan-to-value ratios. This is a bold strategy given that the credit crunch was largely caused by people borrowing more than they can afford to repay. We must hope that there are sufficient safeguards in place to protect against repeating the mistakes of the past.”
Northern Rock offers 10 percent mortgage
February 28, 2011
Over the past few years getting a mortgage has become increasingly difficult for first time buyers, not least because of the level of deposit that is being demanded by the various lenders. However, according to industry officials there is some light at the end of the tunnel, and some buyers may now find that they can get a mortgage with a far smaller deposit than they may have anticipated.
For many first time buyers the financial climate left them with little choice when it came to mortgages, with many lenders wanting a deposit of at least 15 percent. However, officials have said that the restrictions in the market seem to be easing and borrowers are now able to find more mortgages that offer a 90 percent loan to value.
Northern Rock is a financial institution that will stick in many people’s minds for being the first major UK victim of the global financial crisis back in the latter part of 2007. It became the victim of the first run on a UK bank in over a century and became the first of the banks to be given a bailout by the government. However, in a turn of events this lender is now supporting first time buyers with the availability of a 90 percent loan to value mortgage.
This will come as good news for first time buyers, who notoriously find it difficult to raise a deposit because they have no previous property from which to take equity. It is hoped that more and more lenders will follow suit and will start to offer mortgages with lower, more affordable deposits to help get first time buyers back into the market. This comes after reports that many people have been forced to rent property because they cannot get affordable mortgage finance.
Will mortgage interest rates increase in 2011?
January 1, 2011
For nearly two years now homeowners across the UK have enjoyed the relief that has come from the base interest rate standing at its all time low level of 0.5 percent. The base rate was reduced by the Labour party when it was still in power in the hope of boosting the economy and consumer confidence, both of which had taken a battering due to the financial crisis and the recession.
When the coalition government came into power it made a lot of sweeping changes, but one thing that it decided to leave well alone was the base rate, which the Monetary Policy Committee continuing to vote to keep it steady each month. As a result of this the base rate has been at its lowest level in over three centuries for nearly two years, and many homeowners on variable rate mortgages have been able to save money on their repayments.
However, all good things must come to an end, and the rock bottom base rate is no exception. Most homeowners have realised that they are now on borrowed time when it comes to interest rates, and many listen out for the Bank of England announcement with bated breath each month hoping that the base rate will not have been increased.
Industry official have already predicted that the base rate will increase this year, and a large number of these industry experts believe that it is most likely going to be in the earlier part of the year that the base rate will rise. Whilst the rate rise initially may not be a huge one, some do expect several increased over the next two years, which means that by the end of 2012 homeowners could be paying far more than they are now on their repayments unless they are on a fixed rate deal.
Some believe that now could be a good time to get a fixed rate deal, so that if and when the base rate does rise there will be no effect on repayments for a specified period of time. There are a number of fixed rate mortgage deals available, and if you think you would struggle to keep up with repayment increases over the next two years it may be worth seeing what is available, and whether you are able to switch to a low fixed rate mortgage before it becomes too late.
Mortgages being repaid with increased speed
January 1, 2011
It seems that these days homeowners in the UK cannot repay their mortgages fast enough, and concerns about the economy and job losses are driving homeowners to repay their mortgage with increased speed. Figures have recently been released by the Bank of England, showing that the speed at which homeowners in the UK are repaying their mortgage debt has continued to increase.
It is thought that many homeowners are trying to speed up their mortgage debt repayment because they face an uncertain future in the current climate, which has spurred them on to repay as much of their high risk debt as possible before anything goes wrong. Many have used the fact that the base rate has been at an all time low of just 0.5 percent for close to two years to their advantage, using the money that they have saved on reduced mortgage repayments to continue making higher mortgage payments thus overpaying on their mortgage debt.
In the third quarter of 2010 homeowners repaid a massive £6.1 billion worth of mortgage debt. This was up on the second quarter of the year, when £5.8 billion was repaid, and on the first quarter, which saw £5.3 billion worth of mortgage debt being paid off. The trend shows how people are increasingly paying off as much of their mortgage debt as possible, and this is the tenth consecutive quarter where repayments have been higher than borrowing in the mortgage sector.
One economist stated: “The tenth successive, and increased, net injection of housing equity in the third quarter indicates that there is an ongoing desire and perceived need of many people to improve their personal balance sheets given high debt levels and serious concerns and uncertainties over the economic situation.”
Lenders want FSA to review mortgage proposals
November 13, 2010
It was recently announced that the UK’s financial regulator, The Financial Services Authority, was looking to make some big changes to the mortgage lending market, having put forward a range of proposals that included wiping out self certified mortgages, putting into place minimum deposit levels for lenders, and increasing the checks that lenders would have to carry about before approving any mortgage loan.
However, the proposals have raised concerns amongst mortgage lenders, many of which have said that the FSA plans will make it impossible for some people to get a mortgage, and could see the mortgage and property sectors taking a real knock. Mortgage lenders are now calling on the FSA to review the proposals with a view to watering them down.
The Council of Mortgage Lenders has said that the plans of the FSA are flawed and are not practical, but according to the FSA the plans are aimed at reducing irresponsible lending. The regulator said that it was important that borrowers were protected from irresponsible lending by ensuring that they were not given mortgage loans that they could not afford to repay, which could otherwise result in them quickly losing their homes through repossession.
The proposals were first put forward by the FSA in October of last year, and its plans have been evolving since then. However, since that time there has been an ongoing battle between the FSA and the mortgage lending industry, which is strongly opposed to some areas of the proposals.
The FSA has argued: “Almost half of UK households (46%) have had little or no money left after their mortgage and other bills were deducted from their income. Even a modest rise in interest rates could lead to a significant increase in the number of families suffering financial distress. This is why it is imperative that we ensure lenders act responsibly and do not return to irresponsible practices, in order to protect consumers from taking on mortgages they cannot afford and potentially losing their homes.”
Half of mortgages not covered by life insurance
November 6, 2010
A recent study has found that around half of mortgages in the UK are not covered by life insurance, indicating that over seven million Brits do not have a proper policy in place to cover their mortgage in the event of their death. The research was carried out by Sainsbury’s Insurance and paints a worrying picture of the UK mortgage market, as an increasing number of people fail to get the proper protection that they need.
Many people are desperate to cut back on their outgoings and reduce the amount that they pay out each month by as much as possible, and some have started to take risks in order to do this by cutting out potentially vital services such as insurance cover. The seven million plus Brits that do not have life insurance cover on their mortgages owe £318 billion collectively.
Sainsbury’s also carried out a similar study four years ago, and the results of that research showed that around £217 billion worth of home loans were not covered by insurance. This means that in the last four years the number of uninsured mortgage loans has increased by a massive 47 percent.
Officials are concerned that many families could be left high and dry in the event of the death of the mortgage holder, as this would mean that the mortgage repayments would not be covered. Failure to have the cover dramatically decreased peace of mind for the household and could leave loved ones behind facing severe financial issues and possibly losing the roof from over their heads.
An official from Sainsbury’s said that this sort of cover “is particularly important for homeowners… as it can help to ensure peace of mind that the property is paid for upon death, allowing loved ones to continue living in the family home, and it could also alleviate any financial burden, therefore providing financial security.”
CML argues with FSA over interest only mortgage loans
September 9, 2010
It was recently announced that the Financial Services Authority was planning to limit the availability of interest only mortgage loans in the UK, which are classed as riskier mortgage loans than the more traditional capital and repayment loans. With interest only mortgage loans the borrower makes repayments on the interest on the loan over the mortgage term, which means that at the end of the mortgage term the principle loan balance is still outstanding.
However, the Council of Mortgage Lenders has now argued that it would not be in the best interests of consumers for the availability of interest only mortgage loans to be limited in this way. The CML has said that lenders have become more cautious about taking risks, and as a result the number of interest only mortgage loans had shrunk. The group said that within the last year almost 75 percent of mortgage loans had been repayment mortgage loans.
The principle loan balance on an interest only mortgage has to be paid at the end of the mortgage period, and to do this borrowers are advised to set up a sideline investment to raise the money to clear the mortgage loan at the end of the term. The CML said that there were now 8 percent of interest only mortgages that had a specified repayment vehicle in place, and 14 percent that did not have one in place.
The CML has argued that interest only mortgages are popular with many borrowers, and this included capable borrowers who would have investments to repay the mortgage loan at the end of the term, buy to let borrowers who would repay the loan through the sale of the property, older people whose borrowing would be settled after they died, and younger people who wanted to get onto the property ladder without overstretching themselves financially.
Bank of England may intervene with access to credit
August 30, 2010
It has been reported that the Bank of England may take measures to restrict access to mortgage loans capping them to stop lenders giving out risky loans. The claim comes from a senior official from the Bank of England. Charlie Bean, the Deputy Governor from the Bank of England, said that ‘direct constraints’ may be required to restrict access to risky mortgage loans.
According to the report home buyers looking to take out mortgages could be forced to put down higher deposits of at least 10-15 percent of the property value. Whilst many lenders have been demanding higher deposits from borrowers for some time this sort of intervention from the Bank of England could make it mandatory for lenders to demand higher deposits.
This is said to be the first time that a senior official from the Bank of England has indicated that the central bank may take action to directly intervene and reduce the chances of borrowers taking out risky mortgage loans. The measure could be taken as part of new powers that are set to be given to the central bank under the government’s restructuring of the Financial Services Bill, which is set to take place later on this year.
However, there are concerns that this move could further damage the property market, which is already experiencing difficulties as a result of many would be buyers being unable or unwilling to take on mortgages in the current climate.
A broker from London and Country Mortgages said: “The mortgage market is still very slow and the biggest hurdle at the moment is boosting the availability of home loans not restricting them. Very few first time buyers can afford a big deposit so it is important that they are not excluded.”
Getting a mortgage still a struggle for first time buyers
August 18, 2010
Officials from a leading mortgage broker have said that many first time buyers in the UK are still struggling enormously when it comes to getting a mortgage loan. Industry experts from John Charcol have said that most first time buyers are still finding it a real struggle to get a mortgage loan and to afford a mortgage, which means that the dream of homeownership is still out of reach.
One senior official from the company, Ray Boulger, said that the main obstacle that was hindering first time buyers when it came to being able to afford a mortgage was the size of the deposit that lenders were asking them to put down. He said that the deposit levels that were being asked for were out of the reach of many first time buyers, as lenders have really increased the amount of deposit that they are looking for from tenants.
He also said that things for first time buyers were far harder than they were for home movers, as those that were just moving already had property often with equity in it that can be used for a deposit but first time buyers do not have this luxury and have to rely on savings or family to try and pay the deposit required be lenders require.
Boulger said that market conditions are still extremely difficult for first time buyers, and this backed up another recent report from the Chartered Institute of Housing, which claimed that homeownership was out of reach for many people in the current climate.
One would be buyer said:”Trying to find the deposit that most lenders are looking for has been impossible, so trying to get onto the property ladder will have to remain a dream for me for the moment.”
Switching mortgage provider could save consumers money
July 16, 2010
One High Street lender has recently stated that many homeowners in the UK are stuck in mortgage limbo, where they are stuck with a variable rate mortgage that is more expensive than the best buy mortgages that are on the market. The home finance spokesperson from Yorkshire Building Society said that consumers could save a fortune simply by switching their mortgage.
Tom Girling, the mortgage product manager at the building society said that many homeowners were stuck on standard variable rate mortgages with various lenders, but that they could get far better deals elsewhere. He said that this was known as being stuck in mortgage limbo.
Girling stated that there was a significant difference in the cost of some of the best buy mortgage products on the market and the price that many consumers were paying on their mortgages. The building society conducted research showing that homeowners in the UK would be able to save around £1.8 billion a year collectively simply by changing their mortgage provider.
Switching mortgages has been made far easier over recent years as a result of mortgage comparison sites and various internet websites that allow consumers to quickly compare mortgage products and determine which ones are best suited to their needs and their budget.
However, many people fail to take action to switch their mortgages or other services and products that could be cheaper with another provider, such as insurance cover or utilities.
In the meantime Yorkshire Building Society has launched a new five year fixed rate mortgage with a rate of just 3.99 percent, which is the lowest it has ever offered on this type of mortgage.
Mr Girling said: “Our analysis shows that the vast majority could make significant savings by switching to a better rate mortgage.”
Steps to take if you are struggling with your mortgage repayments
June 26, 2010
Whilst the recession may officially be over and the base interest rate may be at its lowest level in the history of the Bank of England, which spans over three centuries, many homeowners are still struggling to keep up with their mortgage repayments, which means that they are at increased risk of losing their homes.
Many people have seen their hours and income reduced, or in some cases have lost their jobs, over the course of the recession, and there are still job losses to come according to industry experts even though the recession has officially wanted. Many people are worried about keeping up with mortgage repayments, and it is important to ensure that if you are struggling with mortgage repayments you do not ignore the problem and hope that it will sort itself out, as the chances are that the problem will simply spiral out of control.
In some cases problems with making mortgage repayments can be sorted out with something as simple as going through your finances and making cutbacks. If you find that you are struggling to make ends meet financially always ensure that your mortgage is the first thing that you pay, and you can worry about the rest afterwards. The last thing you want is to lose your home, so always prioritise on your mortgage and other loans that are secured on your home.
It is a good idea to go through your finances carefully to see where you can make cutbacks, as you may be surprised at how much you can shave off your outgoings simply by shaving a fiver or tenner off here and there, and all of the money that you save can then go towards easing your mortgage repayment problems.
However, there are also people that find that they really cannot keep up with repayments on their mortgage even if they make cutbacks and this is when you need to ensure that you get advice as quickly as possible. It is advisable to contact your mortgage lender as soon as possible when you realise that you can no longer meet repayments, as the earlier you do this the more likely it is that they will be able to help you.
There are a number of options that your lender may be able to look at to help you to avoid repossession action, so immediate action is vital before you fall into arrears. If you are not confident about approaching your lender or feel that your lender is not treating your case fairly it is worth contacting the Citizen’s Advice Bureau or a debt charity for advice.
Openwork encourages borrowers to switch to repayment mortgages
June 26, 2010
Mortgage introducer Openwork has launched a new campaign aimed at trying to get homeowners that are currently on interest only mortgages to switch to capital and interest mortgages, also known as repayment mortgages. This comes after a number of lenders decided to crackdown on interest only mortgage loans, which are far higher risk than repayment mortgages.
With interest only mortgages the repayments made by the borrower cover only the interest on the loan over the mortgage term, which means that at the end of the term the borrower has to find the money to pay off the actual loan balance. For this reason the borrower is meant to make provisions, such as a sideline investment, to ensure that the actual loan amount can be raised by the end of the mortgage term.
Officials from Openwork are concerned that many borrowers with interest only deals do not have any adequate investment in place to ensure that this could be done, and is working with its key lenders, which include many big name lenders, to find a way to make it easy and affordable for borrowers to switch to a repayment mortgage.
Lenders that are involved in the scheme with Openwork include Nationwide, Halifax, C&G, Scottish Widows, Lloyds TSB Scotland and Woolwich.
An official from Openwork said: “At least 20 per cent of UK borrowers have an interest-only mortgage and FSA figures show the vast majority of them do not have a suitable repayment vehicle in place to pay the total outstanding debt. That is a huge concern to borrowers and lenders alike. We believe this campaign is a win-win for all concerned. It helps de-risk banks’ loan portfolios while confirming clients are on track - or helping them to get on track - to repay their loan in full.”
Affordable first time buyer mortgages launched by post office
May 14, 2010
Over recent years first time buyers have experienced many difficulties when it comes to getting onto the property ladder, and with everything from high property prices to mortgage restrictions and high deposit levels to hinder their chances of getting onto the property ladder many have had to give up on the dream of homeownership, at least for now.
However, the Post Office is hoping that it can offer some first time buyers a helping hand after launching a range of mortgages that are designed to suit the needs and pockets of first time buyers. At a time when many lenders are demanding huge deposits from first time buyers the Post Office has launched deals that require a relatively low deposit.
The mortgages, which are targeted towards first time buyers, are available with just a 10 percent deposit, and whilst this is far higher than the deposits required three or four years ago, which stood at just 5 percent or in some cases 0 percent, it is still much lower than the deposits of 15 percent and more that many other lenders are now demanding.
The mortgages offer fixed rates set at between 5.45 percent and 5.99 percent, and the fixed periods are for two, three, or five years. There is also a tracker mortgage available from the Post Office with an interest rate of 5.49 percent. There are some 10 percent mortgage deals now returning to the market for first time buyers, but the interest rates attached to these can be very high.
The Post Office stated: “Whilst there are existing 90% deals available, many remain out of reach for most borrowers because the rates are too high. We’re offering more affordable rates that will allow more borrowers the opportunity to take out a mortgage with a smaller deposit. This should particularly help first time buyers.”
Mixed news for first time buyers
May 7, 2010
Whilst first time buyers have experienced extreme difficulties over the past couple of years when it comes to being able to get onto the property ladder a number of changes have taken place over recent months that have eased the situation for many people within this group. Read more
More people being encouraged to use spare cash towards mortgages
April 27, 2010
According to a recent report a rising number of homeowners are being encouraged to use any spare money that they have to pay towards their mortgage loans, which could see many people save a fortune in interest and cut the amount of time over which they will have to make repayments drastically.
Some lenders are encouraging their borrowers to take advantage of the rock bottom rate of interest and put any surplus cash towards paying extra on their mortgages. With continued uncertainty over jobs and finances consumers are being advised to clear as much debt as possible, and recent reports have suggested that many consumers are using their cash to pay off mortgage debt and other debts rather than spending it on luxuries.
David Dooks from the British Banker’s Association said that homeowners were taking advantage of the savings that they were making on their mortgage repayments as a result of the lower rate of interest and were using these savings to make additional payments on their mortgage loans in order to reduce the debt more quickly. Many were also using this surplus cash to repay other debts such as loans and credit cards to unburden themselves from large debt levels.
The BBA said that lenders were also become more active in the mortgage market again, after a particularly turbulent couple of years since the onset of the global credit crisis. Another industry group said that lenders seemed to be opening their doors for business again. Mr Dooks said that many banks were now actively encouraging their mortgage borrowers to pay their extra cash towards their mortgage loan.
He said: “Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates.”
Mortgage choice for first time buyers on the increase
April 12, 2010
A recent report has shown that the number of mortgage now available on the market for first time buyers has increased, which means that first time buyers can enjoy boosting their chances of getting a better deal on their mortgage because of the increase in the number of deals that are available. Read more
First time buyers may still need to find over £50,000
March 29, 2010
A recent report has shown that the number of mortgages that are available for first time buyers that have just a 15 percent deposit available has been increasing, and that there are now around four hundred mortgages on the market that could prove ideal for first time buyers. Read more
Mortgage borrowing falls due to stamp duty
March 9, 2010
According to a mortgage industry group the level of mortgage borrowing for the month of January has been affected by the increased threshold when it comes to stamp duty in the UK. Read more
Mortgage fraud costing UK one billion a year
March 4, 2010
Mortgage related fraud is a problem that has caused concern for some time, but over recent years, with the credit crunch and mortgage drought causing so many problems, this type of fraud along with some other types of fraud has become increasingly prevalent. 
It has been estimated recently that total losses that can be attributed to some form of fraud in the UK come in at a whopping £30 billion, and out of this around £1 billion is lost in mortgage related fraud alone.
The data was released by the National Fraud Authority released the data, and officials from the group said that the estimate was more comprehensive than the last estimate, which was released in 2007. The new estimate relating to fraud costs included previously unpublished fraud figures, which officials believe make the figures more accurate than those that were estimated in 2007.
Over the hardest hit industry in terms of fraud was the financial sector, which will come as no surprise to many given the chaos that has been caused by the credit crunch, recession, and difficulties in the mortgage and financial markets. Around £3.8 billion in losses is said to have been seen by the financial sector, and this includes £1 billion if mortgage related fraud and £2 billion in insurance related fraud.
The Commissioner of the City of London Police stated: “We always believed that the true cost of fraud could be much higher than previous estimates. It is vital that we ensure that the methodology used to measure the cost of fraud on the UK economy is as up to date and as comprehensive as is possible. As head of the national lead force for the investigation of fraud I know the destructive effects that this type of crime can have. We look forward to continuing our work with the NFA and the rest of the UK’s Counter Fraud community and building upon our recent successes.”
First time buyers could be affected by return of buy to let landlords
February 26, 2010
According to a recent report a rising number of lenders are starting to approve mortgage deals for buy to let borrowers following a rocky period when fewer and fewer of these deals were being approved. Read more
Building society hikes up rates for mortgage customers
February 20, 2010
A building society has recently announced that it is hiking up its standard variable interest rates for customers despite the fact that the base interest rate still stands at its all time low of just 0.5 percent. Read more
Mortgage approvals increased at the end of last year
February 18, 2010
According to recent figures the end of last year saw the level of mortgage approvals in the UK increase, although approval levels were still far lower than they were the previous year. Figures have been released by the UK’s major banks, and have shown that mortgage approval levels increase towards the end of last year, with nearly 46,000 loans for new home purchases being approved in December of 2009. Read more
Mortgage approvals double in twelve months
February 13, 2010
Recently released figures have shown that the level of mortgage approvals in the UK actually doubled in the twelve months to November of 2009. The figures were released recently by the Bank of England, and officials from the central bank have said that the increase in mortgage approvals over the twelve months period is a further sign of recovery in the property and mortgage markets. Read more
Average Buyers Still Unable To Afford Property
January 21, 2010
It has been revealed that the average buyer may still find that property prices are out of their reach, with house prices becoming unaffordable again for the first time since the property slump began at the end of 2007, according to a recent report. Read more
Slowdown in house price increase for December
January 14, 2010
Recently released figures have shown that house prices increases in the UK have seen a slowdown for the month of December, with growth in properties across both England and Wales slowing down for the month. Read more
Buyers Being Forced Into Mortgage Loans By Estate Agents
January 9, 2010
A recent study that was carried out by Times Money has suggested that in many cases potential property buyers in the UK are being forced into taking costly mortgage loans through the estate agency that they go with. Read more
Deposit scheme suffers according to landlords
January 5, 2010
According to a recent report many landlords and tenants are concerned that a government deposit scheme that is supposed to protect the deposits of tenants will end up suffering as a result of measures brought in to try and cut costs. Read more
Mixed news for those with low deposits for mortgages
December 18, 2009
In the past getting an affordable mortgage with only a low deposit of 5 percent, or even with no deposits at all in some cases, was not a big problem, as many mortgage lenders offering 95 percent loan to value mortgages, 100 percent mortgages, and even 125 percent mortgages. Read more
BSA warns that mortgage costs could increase
November 30, 2009
The Building Societies Association has recently warned that the cost of mortgages could rise despite the record low base rate, and this is because of increasingly stringent regulations with regards to mortgage lending coupled with a battle to attract more retail deposits. Read more
Buyers rush to get properties completed before stamp duty holiday ends
November 26, 2009
Last year saw the government take steps to try and revive the struggling property market in the UK, and one of the measures that was put into place to do this was to suspend stamp duty on properties up to the value of £175,000. Previous to this stamp duty had to be paid on properties over £125,000 so the move involved increasing this threshold by £50,000 on a temporary basis. Read more
Cable comments on new FSA regulations
November 22, 2009
Following the announcement by the Financial Services Authority with regards to changes to mortgage lending regulations to prevent another financial meltdown a number of industry groups and officials have given their opinions on the measures. Read more
Mortgage default levels haven’t peaked yet
November 16, 2009
Over recent years a rising number of people have fallen behind on their mortgage repayments, with financial problems being fuelled by the global credit crunch and the recession. Read more
Mortgage lending sees a drop
October 19, 2009
According to a recent report there was a drop in mortgage lending for the month of August, with lending levels falling by around 13 percent. These figures were released by the Council of Mortgage Lenders, which said that mortgage lending for the months of August fell to around £12.6 billion from the £14.5 billion seen in July. Read more
Thirty percent rise in mortgage arrears
October 13, 2009
A recent report has shown that although the base interest rate has fallen to its lowest level in history, at just 0.5 percent, the level of mortgage arrears in the UK has soared by 30 percent over the past year. Read more
Stamp duty due to come back at end of year
October 6, 2009
Last year saw the UK government suspend stamp duty on properties between the values of £125,000 and £175,000 with the aim of making property purchases more affordable in the difficult financial climate and as a result reviving the property market, which has been experiencing severe problems. Read more
Further controversy arises over PPI
September 28, 2009
Over recent years PPI, or Payment Protection Insurance, has been at the centre of heated controversy and regulation changes. This insurance is a form of protection that is offered to consumers taking out finance such as credit card, loans, and the like, and the idea behind the cover is that if the policyholder is unable to make repayments for a specified period of time due to sickness, redundancy, or injury, the policy will then meet these repayments up to a certain period of time. Read more
Possible easing with mortgage situation
September 24, 2009
Following the most recent Monetary Policy Committee meeting, where it was decided that the base interest rate would stay on hold for a fifth month at 0.5 percent, the Bank of England also announced that it was pumping more money into the economy through quantitative easing. Read more
Mortgage decisions can be based on occupation
September 19, 2009
It has been revealed in a recent report that many mortgage lenders have been basing their decision on whether to grant mortgages to applicants on the occupation of the applicant. Read more
FSA too lax over repossessions
September 14, 2009
The UK’s financial regulator, the Financial Services Authority, has been accused of being too lax over the rising level of repossessions in the UK, according to a recent report. Read more
Drop in level of self cert mortgages
September 8, 2009
Since the onset of the global credit crunch in 2007 the mortgage market has undergone many changes, and this has been reflected in recent data that has been released in relation to self certification mortgages. Read more
Continued increase in property prices
September 4, 2009
Recently released figures have shown that there has been a continued increase in property prices in the UK Officials from the Nationwide Building Society have said that house prices have now risen for the fourth month in a row, and have climbed by around 1.6 percent. Read more
MPs think government mortgage plan will be a failure
August 14, 2009
MPs have recently stated that a government plan aimed at boosting the mortgage market is effectively doomed and will not have the desired effect. Officials from the Communities and Local Government (CLG) Committee said that the £50 billion scheme had been set to fail from the start, adding that in order to aid the mortgage market further measures had to be introduced. Read more
Fewer long term fixed rate mortgages available in UK
August 10, 2009
A recent report has claimed that there are fewer long term fixed rate mortgages now available, with a smaller selection of lenders now offering this type of mortgage loan. Read more
Consumer urged to be careful with eye catching mortgage deals
August 6, 2009
Industry experts have been urging consumers in the UK to be careful when going for mortgage deals that they think look too good to be true, as the chances are that they are too good to be true. Read more
Shared ownership hopes dashed for many people with damaged credit
August 4, 2009
Getting any sort of finance such as mortgage finance has always been difficult for those that have damaged credit, and in the past people with bad credit ratings that wanted to get a mortgage struggled for years, as lenders viewed them as high risk and therefore either refused them credit or charged them a very high rate of interest. Read more
Interest rates being kept static for fourth month
July 23, 2009
This month has seen the Bank of England announce that for the fourth month in a row the base interest rate is being kept on hold, at its all time low level of 0.5 percent. Read more
Mortgage repayment reductions not going to High Street
July 20, 2009
Over the past eight months or so many homeowners in the UK with variable rate mortgages have seen their monthly mortgage repayments plummet, with the base interest rate plunging to just a tenth of the level that it was at in October of last year. Read more
Some mortgage lenders paying off borrowers to refinance
July 10, 2009
According to a recent report a number of UK lenders are actually giving customers money to try and get them to refinance with another lender. Read more
Mortgage expert warns on fixed rate mortgage increases
July 2, 2009
As the turbulence in the mortgage and financial markets continues, and the ongoing recession continues to take its toll, one mortgage expert has recently warned that the rates on fixed mortgages will increase in the near future, and already his predictions have started to come true with a number of mortgage lenders having recently hiked up their fixed rate mortgage rates within a few days of his warning. Read more
Eight year low for mortgages in April
June 29, 2009
A recent report released by the British Banker’s Association has shown that the level of net mortgage lending for the month of April from UK lenders slipped to its lowest level in eight years. Read more
Mortgage lenders try and boost markets by cutting costs
June 25, 2009
According to a recent report a number of mortgage lenders have recently been trying to boost the mortgage markets by cutting costs for those looking to purchase a property. Read more
No change in interest rates for June
June 20, 2009
Following the Monetary Policy Committee meeting, which was held earlier this week, the Bank of England has announced that the UK base rate is to be kept on hold for yet another month. Read more
Deposit level drop from Abbey
June 15, 2009
Earlier this month the High Street banking giant which has recently enjoyed taking a larger share of the mortgage market, Abbey, announced that it was cutting its deposit levels for access to its most competitive deals. Read more
Mortgage lenders attempt to cut costs
June 3, 2009
There has been evidence that competition in the mortgage market is hotting up again, with lenders striving to increase their share in the mortgage market by trying to cut costs for potential buyers. Read more
Monetary Policy Committee keeps rates on hold
June 1, 2009
The base interest rate in the UK is to stay on hold for the first time in seven months, with the Bank of England announcing that it is leaving the rate on hold at 0.5 percent following the April Monetary Policy Committee meeting earlier this week. Read more