Research the optional mortgage extras
February 18, 2009
When you are looking to purchase a property, there is a lot to think about. Assuming you’ve negotiated a purchase price, all you want to do is to buy the property that you’ve seen. However, you have to talk to a mortgage advisor to help decide what your mortgage options are, apply for the mortgage, find a solicitor, decide what sort of valuation to have, get a valuation done and all sorts of other things to think about for your own property.
On top of this, you need to think about when you can move in, sorting out your bills, etc so when your mortgage lender offers you a few optional extras that they’ll sort out for you, such as buildings and contents insurance, mortgage payment protection and other such items it may seem easier to just say yes.
These optional Read more
Bargain hunters seek out house bargains
February 17, 2009
With house prices falling as low as they have, it had to happen that eventually house hunters would take advantage of the prices and begin looking for bargains in the property market. According to research from the Royal Institution of Chartered Surveyors, enquiries from potential buyers have risen for the last three months. This hasn’t happened since 2006.
The research has shown that 7 out of 10 surveyors believe the increased interest in the property market is down to the drop in house prices, and 48% of surveyors are convinced that house buyers can now see the market bottoming out soon, before starting to rise again. The actual drop in house prices, according to the surveyors, is close to 30% in completed sales, as opposed to the 20% that the Nationwide and the Halifax believe it to be.
According to the research, the main source of house buying enquiries has come from existing home owners looking to buy a second home. 38% have seen enquiries come from property investors.
However, it is first time buyers who are struggling to get on the property ladder as large deposits are being sought by most lenders. If you have a 5% deposit available for a new home, you only have three different mortgages available to you at the time of writing. A 10% deposit opens the door to just 88 different mortgage options.
Almost a quarter of all mortgages available now require a 40% deposit or above, making it almost impossible for first time buyers to raise the capital.
Using savings to reduce your mortgage
February 16, 2009
Although having a little savings in your account is good to have as a nest egg in case the worst happens, you need to make sure you’re getting the best from your money.
At the moment with interest rates so low, those with Read more
The hidden costs of mortgages
February 15, 2009
As the cost of fixed rate mortgages seems to be falling in generally, borrowers are being encouraged to check the small print carefully for any hidden costs.
For instance, many fixed rate deals at the moment are over one or two years, but after this period, the tracker rate is then a high premium over the Bank of England’s base interest rate so borrowers should check how long they are tied into. If they are tied in for longer than the actual fixed rate deal, this period is called an ‘overhang’.
For example, there is a fixed rate mortgage with a particular building society that offers a fairly low interest rate for one year but following this there is a two year overhang period when borrowers will be on a two year tracker at a potentially high interest rate of 2.5 percent over the base rate. If rates rise, the redemption charge to get out of the mortgage is quite high in that first three years.
A spokesperson for Savills Private Finance mortgage advisor said:
“Quite aside from the fact that a one-year fix is extremely risky at a time when rates are so volatile, there are early repayment charges for all three years, 4 per cent in year one, 3 per cent in year two and 2 per cent in year three.”
More mortgages for first time buyers
February 14, 2009
Earlier this week, it was suggested that first time buyers have a much better chance of finding a mortgage in the current economic climate than the general public believe.
According to the Property Investors Network, although mortgage lenders are being more selective, those wanting to buy their first home are still able to find some good deals out there.
The founder of the Property Investors Network, Simon Zutshi, stated that in some cases when affordability for mortgage repayments is Read more
New mortgages from Yorkshire Building Society
February 13, 2009
This week, the Yorkshire Building Society has released a new set of mortgages that start from as little as 3.99 per cent.
There is a range of 2, 3 or 5 year mortgage deals on fixed rates and loan to value ratios are available in 60 percent, 75 percent and 85 percent deals.
The whole range is available with offset Read more
Mortgage ‘mistake’ from Skipton BS
February 12, 2009
On Tuesday afternoon this week, many mortgage advisors received an email from Skipton Building Society advising them that the building society would no longer accept mortgages on one bedroom flats, which the building society has stated was ‘mistaken communication’.
Once mortgage advisors have Read more
Two million baby boomerangers in UK
February 11, 2009
Recent research from Abbey Mortgages has shown that the UK has a new generation of what is being termed ‘baby boomerangers’ who have been forced to move back in with mum and dad due to the rising costs of living and/or being unable to afford their mortgage repayments.
According to Abbey Mortgages, in 2007 one fifth of 18-24 year olds, over 1 million, either delayed moving out or returned to live with one or both parents to save money.
In addition, almost half a million in the age bracket 15-34 year olds also had to move back in to save money.
The most shocking discovery though is the number of older people from 35-44 year olds who are struggling to survive on their own and are either still living with their parents or have been unable to cope and moved back in.
The Director of Abbey Mortgages, Nici Audhlam-Gardiner, said:
“Millions of Britons have realised that sometimes you have to take one step backwards in order to go two steps forward. So while returning home or delaying your plans to move out might feel like a sacrifice, it’s actually a great opportunity to save enough money to put down a deposit on a property of your own. This is especially important in the current market where the bigger deposit, the better the mortgage rate you will be eligible for.”
Perhaps the future for our mortgages market is that people will only put down larger deposits or refuse to purchase a property at all, and future CeMAP training courses will talk about 100 per cent mortgages or 95 per cent mortgages as a thing of the past.
The death of self-certification mortgages?
February 10, 2009
Self certification mortgages were originally designed for the self employed who were unable to prove their income and these were ideal for those who had irregular or unreliable incomes. At the height of the property boom, other borrowers were also taking advantage of self cert mortgages and in some cases, these borrowers may have overstretched themselves.
Now, there are only a handful of mortgage lenders still offering such products as lenders worry that borrowers unable to prove their income are too risky in the current economic climate. Even these lenders have tightened criteria and increased the cost of their handling fees. Self certification mortgages are covered in the CeMAP exam but is it a possibility they are actually a dying product soon to be a thing of the past?
Those experiencing self employment for the first time could find it difficult to obtain a mortgage if they cannot provide either three years’ accounts or lack strong profits as they will not qualify or a normal mortgage either.
In the past, those applying for self certification mortgages have over-inflated their income to gain a larger home loan and many are now struggling to meet their monthly payments.
Tony Harris, IFA at ContractorMoney, said: “The FSA is increasingly clamping down on mortgage brokers who have knowingly inflated clients incomes on mortgage applications. Similarly the lenders are under increasing pressure to be seen to be acting prudently with regard to their lending and self certification of income is beginning to look like a product that has had its day.”
What happens when the CeMAP syllabus changes?
February 9, 2009
CeMAP delegates would be forgiven for thinking that the CeMAP syllabus would be likely to change in accordance with legislative updates, however, the syllabus actually changes on an academic basis and so it usually changes annually in September and this is when the CeMAP exams also change.
The one exception to this was in 2006 when the new pensions regulation was introduced in April. Pension products are covered within the CeMAP syllabus and so as the changes were quite large ones, the CeMAP exams and CeMAP training were changed in the April of that year also, meaning there were actually two updates in 2006.
The next CeMAP training change is due in September of this year. As with any year, the changes are made to reflect legislative changes affecting the exam, including taxation changes, pension changes and any other relevant information.
As many Read more
