Welcome to the October 2009 Issue of the Mortgage Broker Newsletter.
Within the mortgage market and the availability of mortgage products for you, it is pleasing to see that some lenders are slowly coming back into the market, albeit at the lower loan to values. For example, Coventry mortgages are back in the residential and buy to let market with some attractive rate and unusually low fees compared to some of its competition (see below in the best buy table)
We have also seen some loosening on credit score by some high street lenders allowing some deals that would have failed last year, passing the credit score this year….
First Time Buyers also seem to be active in the market with availability to mortgages seemingly easier and the perceived bargains in the property market (especially with a deposit in excess of 15%) Remember we are currently offering a NO FEES deal to any first time buyer friends that you have, so to gently jog your memory – we love referrals and please bear us in mind!
On the economy, we should continue to see a long slow march towards positive conditions that are best suited to you and ourselves. The good news is, we are at last on the way there. Predictions of the UK leaving recession are getting louder. I believe in the first quarter of 2010, we will be back on solid foundations that genuinely allow us to prepare for the future – Yes there will be ‘dips’ along the way but nobody said this was going to be easy!
With the FTSE going over 5,000, Goldman Sachs and JP Morgan's announcement of strong growth and positive third quarter analysis, allied to resurgent increased output in China, has ensured a bullish mood in the markets and no surprise that confidence is starting to come back. But let's remain guarded, at least for the foreseeable future. Closer to home it is terrific to see the price of residential housing land outside London rising for the first time since 2007. Property prices and developments come like a wave out of London - expect to see more builders gaining in confidence and geared for a strong future with better finances being put in place.
Mortgage Deals of the Month
Every month our advisers scour the whole of the market to bring you what they consider to be the best mortgage deals currently available. As you know lenders change their rates on a frequent basis so don’t hesitate to contact us if you are looking for a new mortgage or wanting to change your existing deal for a better one.
The Best Residential Mortgage Deal for October is…
3.40% Variable rate for the term of the mortgage
£596 per month based on a 25 year repayment remortgage for £120,000 on a property valued at £200,000. 65% maximum loan-to-value, £300 lender arrangement fees added to the loan, £199 booking fee, FREE valuation fee and FREE legal fees. The overall cost for comparison is 3.5% APR. Plus there are penalties for early redemption!
To grab this great deal while its still available please call one of our specialist advisers quoting "OctoberDeal" on 0845 6076193 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
The Best Buy to Let Mortgage Deal for October is…
4.49% tracker rate above the bank base rate until 30/09/2011. The deal then reverts to the lenders Standard Variable Rate for the term of the mortgage. The deal comes with a FREE valuation fee and FREE legal fees.
£499 per month, based on a 120k mortgage on a 200k property interest-only over 20 years, £800 lender arrangement fee added to the loan, £250 booking fee, maximum 60% loan-to-value, the overall cost for comparison is 4.9% APR. An Early Repayment Charge of 4% interest until 30/09/2011.
To grab this great deal while its still available please call one of our Buy To Let specialist advisers quoting "OctoberDeal" on 0845 6010153 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
The Best Fast Track / Self Cert Mortgage Deal for October is…
4.09% fixed rate until 30/11/2011 (no proof of income needed, subject to status)
£648 per month based on a 25 year repayment remortgage for £120,000 on a property valued at £200,000. 65% maximum loan-to-value and £1499 lender arrangement fees. The overall cost for comparison is 3.8% APR. An Early Repayment Charge of 3% of the outstanding loan is applicable until 30/11/2010 and 2% until 30/11/2011. Free legal fees and a Free valuation also included. The deal then reverts to the lenders Standard Variable Rate of 3.5%
To grab this great deal while its still available please call one of our Self Cert specialist advisers quoting "OctoberDeal" on 0845 6076193 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
Be Sensible And Save
Everybody knows how difficult it is to get a mortgage these days – it seems like mortgage lenders have forgotten how to say yes. But there are ways and means of getting a mortgage, in good time – the key is to be sensible and save.
Just by having a quick look at the Best Buy Tables you can see that there are very few mortgages where you only need 10 or even 15 percent of the property’s value as equity. With the average property at around £160,000*, that may mean you need at least £24,000 in equity if you are to secure home finance. That’s a big hill to climb, especially if you have debts and other financial commitments that are draining your income every month.
It’s doubly hard for all those in negative equity – the Council of Mortgage Lenders has predicted that more than one million Brits could be underwater on their mortgage**. So not only would you have to find all that extra equity, but you would also have to raise enough so as to cover your existing loan. For many a home loan might be too far away.
Some people might feel that the answer lies in loans to cover their shortfall. They might feel like taking out unsecured finance, using a large credit card or even seeking out a loan shark might be a way by which they can get hold of some money and make the move.
Others might stretch the truth a little on their mortgage application. They might omit crucial debts and over-inflate their incomes so as they can get a bigger mortgage and solve their shortfall.
When it comes to trying for a mortgage the very worst things you can do is use unsecured debt or lie. By using unsecured debt, you are already digging yourself into a hole before you even start paying for your new mortgage. You might find that quite quickly your extra debt is unmanageable, which in turn affects your existing responsibilities and also your new mortgage. Uncontrollable debt is one of the main reasons people fall into arrears and subsequently become repossessed. Unsecured debt can never help you fund a secured investment – it’s bad money chasing after good.
Lying on your application is equally as risky. Not only is a good chance that you will be found out by the numerous checks that lenders make, which could lead to charges of fraud. Also, you may be just digging yourself into a similar hole as you would with unsecured debt. By guaranteeing a monthly payment that you cannot realistically reach each month, you are only guaranteeing future arrears. Any mortgage process must be met with honesty and truth.
If you are struggling to work out how you can get hold of another mortgage, the best advice you can receive is be sensible and save. By avoiding risky practices like over-inflated incomes and unsecured debt you will know your situation will not get any worse. Then it’s just a matter of improving your chances of a lender saying yes.
It starts with a talk to a professional mortgage adviser. An adviser will be able to assess all your finances and give you an impartial and honest answer. That answer might not be the one you want to hear, but it is the truth. Also, if you cannot get hold of a mortgage right then, it doesn’t have to end there.
The key is to save. That means being on top of all your finances and having enough to begin rebuilding any equity you have lost through a fall in house prices or past spending. An adviser can point you in the best direction when it comes to investments, savings accounts, ISAs or bonds. They will be able to tell you where to put your money and how much so as to maximise your returns. They will work for you – they will assess the risks you want to take with your money and how mush you can afford.
During this downturn, many people will have to simply wait for their turn if they want a new mortgage. Luckily we are living in the lowest ever base rate environment, so variable rate and tracker rate mortgages are as cheap as they have ever been – so it might even pay to wait.
Whatever you do, talk to a mortgage adviser. It can be scary to find that you are in negative equity, or that you are simply unable to get hold of another mortgage – so get some reassurance and begin sensibly planning for the eventual upturn.
* Nationwide, Halifax average house prices June 2009
** CML
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