We speak to people every day looking to save or raise money, or avoid moving home.
In the current property market remortgaging or getting a further advance to avoid moving home is becoming an option. It is not just because mortgage lending is by far the cheapest way of raising cash to fund an extension or improvements to your home in the short term with rates being so low. But rather people are reluctant to make a big move while the property market is static but still want to invest in their home or make it more practical.
Many people assume that with lenders SVRs as low as they can go for the most part, they are saving money. This is not usually the case even with ultra-low interest rates. If your current SVR is base +4% it’s more than likely your lender has current deals under 4%. If you have already paid part of your mortgage off there are also savings to be had on the amount you need to borrow. All things being equal you’ll save money by getting the lowest rate you can. Even although a new deal will have associated costs and redemption penalties , we will take these into account when calculating any savings.

Remortgaging is also a way to raise finance as it allows you to borrow money at a relatively low rate compared to a personal loan although you are adding the debt to the loan over the whole term. Some homeowners have what they see as surplus reserves of equity that they choose to use for other things.

Are You Not the Perfect Mortgage Applicant?

A mortgage is usually the largest financial commitment you will take out during your life time. Its purpose is to purchase a house that you and your family can live in. Life insurance is recommended to cover the amount of the mortgage so that if the worse was to happen and an applicant was to die, then the loan would be paid off so that the survivors can benefit from a mortgage free property.

It is essential to analyse the consequences of what position the family would be in if the worse was to happen. It is not a nice thing to think about but it is worth analysing to ensure that the standard of living that a family is used to can remain if someone in the family was to pass away. It is not always the breadwinner of the family that requires life insurance, consideration should be given to the financial consequences of losing any member of the family.

The type of life insurance that you require will depend on the type of mortgage that you wish to cover. If you have a repayment mortgage then a decreasing term assurance would be the most suitable. This type of insurance reduces along with your mortgage as you pay it off, for this reason it is cheaper than a level term assurance. Level Term assurance stays the same throughout the term of the mortgage and is suitable for interest only mortgages where the mortgage amount stay’s the same.

It is important to make sure that your life cover covers the amount and term of the mortgage. When remortgaging you may change the amount or term of the mortgage, at this stage you should also review the life cover to ensure that it is in align with the new mortgage amounts and term.

It is all about making sure that the minor details are right to ensure that you are properly protected at an affordable price.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250

Real Mortgages for Real People

Our recent focus has been on the Near Prime Market .We spoke in our previous article about the appearance of the near prime lenders. We thought it would be helpful to give you an idea of actual criteria and circumstances where we can help. We are committed to educating our clients through making you aware of what is out there in the market. The easiest way to this is to relate it to real life.

Simon lost his Job

Two years ago amoungst other people, Simon lost his job. Simon found it hard to make ends meet and ended up with a small CCJ’s and 2 defaults. Simon is now in work but still has large monthly commitments due to the accumulated debt when he was out of work. He is now looking to capital raise so that he can pay off his unsecured debt. His house is at 70%LTV and he wishes to consolidate to reduce his monthly outgoings.

We have access to lenders who will capital raise up to 80% LTV and will except CCJ’s, defaults and a good credit report for the last 4 months.

Nick didn’t manage his money well

During the boom Nick was doing well, he never really took care of his credit profile because he didn’t think it would matter or cause too many problems. He has just got a new job and needs to relocate. He needs to move house and relocate and has applied online and has applied to a high street bank. On both occasions he has been turned down due to his credit.

We have lenders who will take into account CCJ’s and Defaults up to 80% LTV. We would be able to apply for the mortgage and would then review him once his credit has been repaired to see if we can get him on a better rate.

Debbie is looking to downsize

Two years ago Debbie went through a divorce. As a result, she ended up with 2 month’s arrears and a couple of defaults. About 6 months ago she had worked to clear off her arrears and now she is back on track and her finances are all up to date. She still has the house and is looking to downsize however, she has found it hard to get a mortgage agreed because of her previous finance problems.

Debbie’s credit file is now clear and she has had no problems in the last 6 months. As long as her income fits affordability, (we have lenders who will look at 3 missed mortgage payments in the last 3 years), we would be able to give her mortgage options.

Catherine wishes to reduce her credit card commitments

During the boom, Catherine took out credit cards attracted by the 0% interest rates, however, although the Bank Of England Interest Rate hasn’t increased, her credit cards payments have. She has had quite a few late payments and a registered default 6 months ago against her loan. She is looking to consolidate her debts to reduce her payments.

As Catherine has managed her finances well over the last few months and she has good income we have access to lenders who specialise in these sort of cases. Even though she has missed payments and a default, we’ll be able to help.

Harry wants to do home improvements

Harry wants to do some home improvements but has missed a few payments on his credit cards. He was thinking of a secured loan but it worked out to be quite expensive. He has tried his current lender for a further advance but he was declined due to his credit score.

We would be able to advise Harry on the cheaper option of raising finance through his mortgage. We can look at capital raising to 80% LTV and the missed credit card payments should not be a problem.

Shazac had mortgage arrears

Shazac has had arrears in the past, he is on a good tracker rate at the moment but is afraid of what will happen if rates rise. His present lender is not offering any new products and he would have to remortgage to a new lender. He wishes to do this before rates rise.

Shazac can remortgage to another lender, his options are reduced because he has had arrears in the past however we have lenders who will take into account 3 missed mortgage payments in the last 3 years. The lenders also have access to cash back and refund of valuation to help with costs.

In the real world there are many people that will fit the descriptions above, many of them thinking that they have no mortgage options and are paying too much in monthly outgoings. If you feel that you fit into to one of these categories then you are not alone and there are now lenders out there that can help.

Complete our short form on the right side panel and one of our qualified mortgage advisors will be in contact to answer any questions you may have.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250

Are You Not the Perfect Mortgage Applicant?

Haven’t got perfect credit score, perfect employment status, huge deposit and loads of income? Then you may be put off applying for a mortgage or you may have been told that you can’t get a mortgage from a bank or lender who is looking for the perfect client.

Most people are not perfect and may have missed a payment on a credit card, not signed onto the electoral roll or may have had a few credit problems. People are not perfect all of the time and there are a few mortgage lenders appearing now in the market who are trying to offer a common sense approach to lending.

These lenders are called near prime lenders who are trying to offer a solution to those people who have had a few problems in the past. The Bank Of England Base Rate is only going to move in one direction and that is up. With a lot of people stuck on their current lenders standard variable rate with nowhere to go  as rates increase these people are going to be trapped. There are however, options worth exploring to avoid this situation.

The recession has had a significant impact on the credit profiles of many borrowers. They may have never had any problems with credit in the past but this downturn may have just been too much of a storm to weather. There has been an increase in missed payments on credit cards, ccj’s and missed mortgage payments. This has made it hard for a large percentage of the population to obtain a mortgage. Fortunately, we are starting to see a shift where products are becoming available specifically designed for this type of borrower.

New products are helping people who are finding it hard to fulfil their credit obligations to consolidate debt and capital raise to reduce monthly outgoings where there is equity available. A lot of people have taken out credit cards to help finance their livelihood and are on high credit card interest rates. These debts can be crippling to month to month household incomes. An option is to remortgage, consolidate the debt to reduce your monthly incomes.

If you are unsure about whether or not you will be able to obtain a mortgage for whatever reason it is always worth asking as one of these new near prime products may suit your needs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250

How Much Can You Borrow?

It is important to stress that mortgages are still available. There is a general perception that funds are not available to borrowers.  A reason for this negative perception is because a lot of banks have tightened their criteria to walk in customers, cherry picking the most suitable clients for their books.

It is in this time where mortgage advice is ever so more important. Lenders are not throwing money to everyone who wants a mortgage. On the high street if you go into a bank you will not get whole of market advice and if you do not meet banks/building society criteria then you are told you cannot get a mortgage.

Mortgage lenders have had to become more stringent and sensible with their lending criteria however there are more lenders than what are on the high street with more generous criteria. This is where mortgage advice is essential so that you can use the expertise and experience of a specialist who knows the mortgage market and the various products available.

Intermediaries are used by mortgage lenders because they provide valuable advice and can provide products that are more innovative and flexible than the high street. The mortgage advisor is the one stop shop who can search across the market not just for the cheapest product but also for a product that has the right income multiples, adverse credit criteria, debt criteria, etc, ultimately aligning a lender with your personal situation and demands.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250

Optimisim for the Mortgage Market

According to Halifax House Price Index house prices rose by 1.2% in June. They still remain 3.5% lower  than  this time last year. In June the average house price in the UK was £163,049. According to sources, average tracker and fixed rates have fallen to some of the lowest levels ever. The average for a 2 year fixed rate is at 4.32%, a 3 year fixed rate standing at 4.92% and 5.29% for a 5 year fixed rate. The average 2 year tracker is at 3.37%.

The reduction of rates maybe because of the reduced expectations of the increase in the Bank of England Base Rate. This reduced expectation has meant that the cost of lending money for the banks has reduced on the SWAP markets.

What is encouraging is these cuts are being passed on to all loan to values. This is great news for First Time Buyers who have seen rate cuts on lower LTV bands but not for people with smaller deposits.

The mortgage lenders however, are not passing on the full cuts in interest rates due to the increased pressures and costs that the banks are facing. As mortgage rates are slowly reducing as soon as there is some hint that rates are going to go up the mortgage lenders will start to increase their rates.

Not all lenders are reducing their rates across all product’s, some are keeping the rates the same for people with larger deposits but are reducing them for higher LTV’s. It is a good time to review your mortgage due to the reduction in rates and them being historically low. Make sure you don’t miss out and talk to an advisor.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250