Information on terms and structure of mortgages and how they are calculated
Is the New Mortgage Price War ‘Phoney’?
It appears that thanks to the bank of England’s funding for lending scheme mortgages are now at their most affordable for almost 15 years.
Competition has definitely returned to the mortgage market and rates are falling to unbelievable lows. Read more
The Return of the 10 year Fixed Rate Mortgage.
A 10 year fixed rate mortgage in this day and age can sound quite far-fetched, but imagine 5 years from now when rates may have possibly climbed to at least 6 per cent…..
It is not so far-fetched when looking back at the 1990s when many borrowers had mortgage rates of 9 per cent to 15 per cent.
A 10 year fixed mortgage rate product is a rare commodity within the current mortgage market.
The most recent lender to enter back in to the 10 year fixed rate mortgage market is Norwich and Peterborough building society, who have re-launched their 10 year fixed year mortgage which has a rate of just 3.99 per cent.
The mortgage has a 75 per cent loan to value ratio, it comes with a fee of just £295 and the building society is also offering free valuation or free legal fees. Those home owners looking to remortgage to this deal will be given a range of cash back options.
Richard Barker, product manager at Norwich and Peterborough building society, says “we know that this competitive rate will be welcome news for those who wish to fix for a longer period of time”.
David Hollingworth, director of mortgage broker London and Country, added “it is certainly a market leader in a sparsely populated sector of the market and will give long term security against rate rises”.
This particular deal is identical to an offer the building society had the same time last year, which was then pulled from the market after just two weeks following ‘unprecedented demand’.
The Leeds building society has also launched a 10 year fixed deal at a rate of 4.29 per cent and also has a 75 per cent loan to value.
This deal comes with a booking fee of £199 which is payable on application, which is non refundable, and a completion fee of £800 for loans up to £500,000.
A greater level of financial stability is one major reason to consider a 10 year fixed rate mortgage and it also ensures that the mortgage rate and repayments remain constant, even if a borrowers life changes in other ways.
Industry experts also state that by choosing a competitive longer term fixed rate borrowers will not be required to remortgage so often which can save on remortgage fees and charges.
These mortgage deals are better suited to those who feel they are in their ‘home for life’ and unlikely to move, although the deals are portable and so can be taken to a new property.
One of the downsizes to these mortgages is that an early repayment charge is applicable all the way through the term of the mortgage.
A lot can happen in 10 years and most people will not know what they will be doing in 2023 and it is also impossible to know what will happen to the economy. Therefore these deals are not for everyone.
Is Help at Hand For Mortgage Prisoners?
It seems that falling house prices amongst other things have now turned many home owners in to mortgage prisoners. As many of these home owners have seen the equity in their homes eroded or even wiped out completely.
Recent research has also shown that many people in the UK including home owners have been unable to obtain further finance for mortgages due to them been self employed, having credit impairment problems or just employment changes. Read more
Mortgage payment holidays.
A recent survey by The Times newspaper showed that more and more people are now seeking ‘mortgage payment holidays’ in order for them to keep up with the growing financial pressures of the credit crunch.
Also recent research has shown that more than 2 million UK home owners are considering taking mortgage payment holidays. Read more
More help needed for first time buyers!
It seems that currently first time buyers are trying to get on to a property ladder that has no rungs and many potential buyers are trapped in rental accommodation as they can not afford to access the property market.
The National Association of Estate Agents (NAEA) recently reported that the proportion of sales made to first time buyers dropped to a 7 month low in May 2012. Read more
It seems that in the current financial climate home buyers are now facing a two tier mortgage market, with a growing gap between those lucky enough to be able to put down substantial deposits and those who can not.
Getting a foot on the property ladder can be a tricky business, especially if you are a first time buyer with banks demanding high deposits before they will even consider lending. Read more
Is there a future for interest only mortgages?
Before the financial crisis began interest only mortgages were very much viewed as a fast track to home ownership and in 2007 33% of residential mortgages were sold on an interest only basis.
However, in recent times these mortgages seem to be becoming a thing of the past. While it is still possible to get an interest only mortgage, these are now subject to the level of equity in the property and the repayment vehicle that will be used. Read more
Buying a property is a huge financial commitment and therefore it is crucial for potential buyers to factor in all additional costs into their budgets.
The most common cost after the solicitor’s fees is stamp duty and this is based on the value of the property.
Stamp duty is levelled in bands of 1% on properties between £125,001 and £250,000, 3% on properties between £250,001 and £500,000 and then 4% on properties above £500,000, for example the stamp duty on a property valued at £200,000 would be £2,000. Read more
Every house purchase involves a number of legal aspects and conveyance is the legal process of transferring the ownership of a property.
Ideally buyers should start looking for a conveyance solicitor at the start of the house buying journey. Read more