Bradford & Bingley Suspends Mortgage Lending
September 30, 2008
The buy-to-let arm of Bradford & Bingley has now closed for new business whilst the government takeover is being sorted out.
The bank has confirmed that all mortgage offers currently issued will be honoured, but no new mortgage applications will be accepted.
The government will be taking on a £41 billion mortgage book from the lender, and the savings and branch network has been sold to Spanish bank Santander, the banking group that owns the Abbey.
One of the reasons that B&B appears to have got into this trouble is that 75 per cent of its mortgage book is from buy-to-let or self-cert mortgages, where an applicant does not have to provide proof of income.
Experts are split over the effect this will have on landlords, whether it will increase interest rates or not. Some believe that the reduced level of competition will cause interest rates to rise, whilst others, such as Ray Boulger of John Charcol, the mortgage brokers, say that the bank has priced itself out of the market for some time now and so those who needed to look for cheaper alternatives elsewhere will already have done so.
What Do Rising Mortgage Rates Mean For Mortgage Advisors?
September 29, 2008
Yesterday we talked about the changing face of the mortgage market and how we expect the majority of mortgage interest rates to rise over the next few weeks. Having said that, it was only last month when they were falling so things can change very quickly in the mortgage market at the moment.
So, what do rising mortgage rates mean for mortgage advisors, and more importantly, what will it mean for those currently looking at CeMAP training in order to train as a mortgage advisor?
There have been quite a few mergers and takeovers this year, Northern Rock has been nationalised and it looks like Bradford & Bingley are following suit. That means fewer large players in the market but it doesn’t necessarily mean fewer mortgages overall. Indeed, nationalisation for Northern Rock is likely to be only a temporary solution to keep the bank afloat, keep consumer confidence in the banking system and is likely to be privatised again at some point. This credit crunch and the mergers going on would not normally have been allowed and when the economic crisis is over, it may be that we will see some sales and buyouts.
Rising interest rates are not only bad news for borrowers; they are Read more
The Ever-Changing Mortgage Market of 2008
September 28, 2008
Will this mortgage market never calm down? It’s so up and down and changeable at the moment; it was only last month that we were discussing the falling mortgage interest rates as the prices seemed to stabilise and then with the news of US investment bank, Lehman’s Brothers, going bankrupt, the whole process seems to have kicked off again.
This week, the main discussion is Read more
FSA Fines Mortgage Company £1.1 Million
September 27, 2008
The Financial Services Authority (FSA) regulates the mortgage market and has this week fined mortgage lender GE Money Home Lending £1.12 million.
The fine was as a result of discrepancies where 684 customers had retention clauses in their contracts. A retention clause is common practice. Read more
First Time Buyers Need Mortgage Advisors
September 26, 2008
First-time buyers should currently be able to benefit from the falling house prices, however, several are failing to do so simply because they don’t know where to look.
Many first time buyers believe that they need a 10 – 15 per cent deposit to get a mortgage now, however, that is not the case for everybody.
Those who wish to borrow more than a 90% loan-to-value (LTV) still have Read more
Mortgage Rates Remaining Flat
September 25, 2008
Despite the drama on Wall Street with the collapse of Lehman Brothers investment bank, and the subsequent declarations of increasing interest rates from the experts, this last week has seen mortgage interest rates remain surprisingly flat.
In fact, long term fixed rate mortgages even reduced in one or two cases in America, which is normally a sign that the UK mortgage lenders will follow suit. It may simply be that UK mortgage lenders are currently pre-occupied with all the recent takeovers and discussions of mergers and hence are still watching the market to see how the US mortgage banks will react before they make a decision on increasing mortgage interest rates and by how much, so currently we wait and see. Read more
Should Homeowners Keep The Faith In The Current Mortgage Market?
September 24, 2008
According to the National Association of Estate Agents, buying a property is still a ‘sound investment’ and those searching to get on the property ladder should not be influenced by the doom and gloom of the media. After all, it is doom and gloom that sells papers.
The NAEA has urged consumers to be ‘patient’ with the temporary issues in the mortgage and property market. It has been an unpredictable year in the property market and a ‘tough time’ for the industry, however, it is the ‘wait and see’ attitude that is affecting consumer confidence.
The chief executive of the NAEA, Peter Bolton King, said:
“The market is shaky now but it will return in the next year or two and when it does it will offer substantial returns. The reduction in new build homes is serving only to increase pent up demand. As long as a home is purchased with the plan to settle in and keep it for the foreseeable future then now is a great time to invest in a property.”
After all, house prices are relative and if the price of your own property has decreased slightly, then so will the price of the property you are looking to purchase. Many first time buyers, who have been saving their deposit, may be disappointed to see that many mortgage lenders now require a ten per cent deposit, however, there are plenty of bargains to be had and many are seeking the help of parents to help them with the initial deposit.
B&B Last Stand Alone Mortgage Lender
September 23, 2008
If giants such as Northern Rock have experienced trouble in recent times, is it possible for the last stand-alone mortgage lender, Bradford & Bingley, to weather the credit crunch storm?
Now that Alliance & Leicester was taken over officially by Santander last week, it is now the last stand alone mortgage lender in the UK.
To save Bradford & Bingley from problems, the FSA is proposing rescuers to put contingency plans in place. The bank is worth around £400 million and has assets worth £52 billion, which would be broken up and sold in the case of difficulties. Potential rescuers include HSBC, the National Australia Bank or Santander.
Bradford & Bingley is the UK’s leading provider of specialist residential mortgages and also offers savings products, and is a large buy-to-let loans specialist. Mortgage arrears have risen slightly, but they have done so with all banks recently.
The bank certainly sounds like a strong bank and is well capitalised, in fact, it is one of the most capitalised banks in the UK. However, panic is one of the main factors in any bank’s downfall so it might only take a little panic to make B&B the next victim of a merger. B&B deny being in talks about its future and says it is strong enough to make it through.
It certainly seems the mortgage market is changing and for those who will qualify as mortgage advisors in the next year or so, their services will be in demand as people rush to make sure they have the best interest rate and mortgage deal they can get.
Mortgage Rates To Rise
September 22, 2008
Experts predict that mortgage rates will be set to rise again now that the US investment bank Lehman Brother’s has gone bankrupt, which will be a turn of events after the recent decreases in the last few weeks.
The market was just starting to recover slightly in terms of interest rates but now has been rocked again. This means that the cost of lending money between banks, known as borrowing money on the wholesale market, has increased because of the higher risk, and this increase in cost will be passed onto borrowers. Read more
Mortgage experts say HBOS is safe for a mortgage
September 21, 2008
With news this last week about the Lloyds TSB £12.2 billion takeover of HBOS, those applying for mortgages would understandably be concerned over their mortgage applications. However experts say that there is nothing to fear about the takeover, if you’ve been offered a good mortgage deal you should feel assured in going ahead.
Mortgage expert Ray Boulger, who works with broker John Charcol says:
Borrowers have absolutely no reason to panic. HBOS will Read more
