With the housing market in the UK facing turbulent times, first-time buyers are finding it increasingly difficult to get their foot on the property ladder. With the average first time buyers property price marked at around £162,000, those wishing to move out of their parents house and settle into a place of their own might have to wait that little bit longer. Despite the average asking price for property dropping by around £11,000 - according to research carried out by a leading property search website, first-time buyers still face difficulties in finding affordable mortgages. Despite a base rate cut this December, the cost of mortgages is increasing - with the recent credit crunch leading to changes in factors such as stricter lending rules, falling house prices and rising mortgage rates. And with many competitive fixed-rate and discount mortgage schemes having being pulled, first-time buyers now face more difficulties in finding an affordable deal. For those searching for a 100% mortgage, the prospect can look even bleaker, with many lenders pulling such deals from the market within the last half a year. And with rising student debts and average graduate salaries that don t go so far in helping to pay them off, young people face a rocky start when looking to get their first foot on the property ladder. Increasing levels of debt and high property prices are contributing to a growing number of kidults - those who still live at home with their parents. Steep house prices, increasing student expenses and the rise in the cost of living having contributed to more young people choosing to remain in their parents households, and the recent credit crunch has made it more difficult for those wishing to fly the nest. And it s not just young people who feel the squeeze of the spiralling costs, with parents now contributing an average of around £21,000 towards the cost of their offspring s first home. According to a survey, roughly one in 7 parents now choose to remortgage or take out a loan in order to help out their offspring, placing yet more financial pressure on those already on tight budgets. Compare a range of mortgages from a wide range of lenders to find a mortgage deal that suits you.
Mortgages - Do They Have to Give You a Headache? As the housing market continues to boom, first time buyers are asking themselves if they can afford a place to call their own. In the south-west of England, particularly, it can feel like you could pay tens of thousands of pounds and still only afford a shoe box. Many people are now looking to buy in up and coming areas, possibly a touch run down, but with ‘potential’. They cross their fingers and hope that these cheaper houses or flats might appreciate in value in years to come. In recent years, the trend in house prices has been upwards, but a recent tremble in the financial markets has once again had people talking of a ‘realignment’. However, the other option of course is renting, good if you are moving around frequently, but not so attractive if you like staying in one place and putting posters up with blue-tack. The total amount of local housing stock has also declined substantially since the 1980s, and most private tenancy agreements are Assured Shorthold Tenancies, more favourable to the landlord than the old Assured Tenancy. The other issue in the buying versus renting debate is the old ‘money down the drain’ argument. As challenging as home-owning may be, at least it means that you can pat your bricks and mortar and think, ‘this is mine’. In clear financial terms, home-owning is also better value for money over the long term. A 2005 survey by Abbey showed that on average a home owner will pay £37,650 less over twenty-five years than renters. So, if you decide to take the plunge and look around for a place to buy, how on earth do you go about it? There are hundreds of companies selling many types of mortgages: capped rate, buy to let, variable rate, and tracker mortgages are just a few of the options available. Financial books can be helpful, as can Internet sites that help you find and compare mortgages, but don’t forget that the old fashioned approach of going into your local bank can work just as well. After all, staff know the difference between the many mortgage types which can swiftly give the non-specialist a large headache. Each mortgage seller must also provide you with a Key Facts Illustration (KFI) to make it that little bit easier to compare and contrast different mortgages, and to understand what features are being offered. So, if you’re keen to have a home of your own, a place that satisfies all those clichés about ‘home is where the heart is’, head down to your local mortgage seller and keep your eyes peeled for the property of your dreams. The whole process might be easier than you think. Adam Singleton is an online freelance journalist from Scotland. His hobbies include travelling and hiking.
Stepping onto the property ladder and buying a home for the first time can seem like a really daunting prospect. You need to get the decision right because getting a mortgage is perhaps the biggest financial commitment you will ever make. Despite this, many people get a mortgage without really knowing a lot about the process. It pays to be clued up before stepping onto the property ladder. If you know about the mortgage buying process then you will get a better deal and find the right home for you. The costs of a mortgage Obviously the biggest cost of the mortgage is the lump sum that you want to borrow and the interest on top of this. However, there are many other charges that you need to think about when getting a mortgage. Arranging the mortgage will usually cost a few hundred pounds, as will legal fees. You also need to think about survey costs, land registry costs and stamp duty. There is also the amount of down payment you are going to make, all of which can add up to making the initial process of getting a mortgage expensive. Make sure that you have all of these funds in place before proceeding. You should be financially stable before even thinking about getting a mortgage. Finding a lender Once you have worked out the costs of getting a mortgage, you need to find the right lender for your needs. Shopping around to find the best deal is important, and looking at both online lenders and your local high street banks and mortgage providers is a good idea. You should look at lenders before you go house hunting, as you will have a better idea of how much you can afford to borrow and how much you will the lender will give you. That way you will have a budget to stick to when looking at properties. Some lenders will offer you a pre-approved amount, which can help to speed up the house buying process. Finding a property Once you have looked at lenders you should find a property that meets your needs and falls within your budget. Once you have done this you can get a survey done and exchange contracts. Things to look out for If you are new to mortgages, then there are a number of things you need to look out for. Most importantly, do not borrow more than you can afford. Although you may have seen the perfect house, that house will be taken away from you if you cannot meet the repayments. Do not be pressured into borrowing more than you can afford either. Remember that the lender can recover their money through repossession and know that lenders will get into other debts rather than default on their mortgage. Work out a strict budget and do not go over that amount. Also make sure that the mortgage terms you get are fair and that there are no hidden costs or services that you don’t need, like credit insurance. Know the terms The last key to finding a good first mortgage is to know the terms involved in the mortgage process. If you know what to look out for and the things that you really need, then you can get a mortgage that will suit your needs and not cost you too much money. All you have to do now is find the right house for your budget. For additional articles and an extensive resource for everything about credit cards and finance, please visit us at Credit Cards and Mortgages . Visit http://www.creditcards-gb.co.uk
A growing trend in the real estate world is purchasing property with the intention of letting it, or renting it, to others. There are special mortgages that one can take advantage of for this type of business transaction. If you want to buy a property as a long-term investment and you plan to rent it out to cover the costs of ownership, a buy to let mortgage is probably what you will need to look at. Understanding Buy to Let Mortgages Buy to let mortgages are more commonly known as investment mortgages and their purpose is to provide the borrower with the funds to buy a property that will be rented out to tenants. The nice thing about these mortgages is that the mortgage payment is often low enough that any rent collected will be more than the mortgage, making it possible to actually profit from the purchase of the profit sooner than you would if you had to pay up front for the cost of the home. More and more people are looking into investment or buy to let mortgages because real estate has proven to be a safe investment time and time again all over the world. While stock markets rise and fall and the value of currency rises and falls with it, real estate is generally an investment where you can get your money back. To make the deal even sweeter, there are some really great buy to let mortgage offers out there to take advantage of that includes decent interest rates and even fixed interest rates. When searching for the right buy to let mortgage you really should shop around and compare all of the different offers to make sure that you are getting what you want. Also, depending on what you find you may or may not be able to afford the buy to let mortgage at all, so be sure to check out all of the options. Some of the features that make this type of loan really popular are they let regular people invest in property, perhaps making it the borrowers first time long term investment. In addition, these loans offer low interest rates, which is always a good thing when you are investing in something long term. In addition, there is a high demand for rental homes right now all over the world, so when you get into this you know that you are getting into something that really can change your life and even provide a source of income for you. Wondering what the differences are between a normal mortgage and a buy to let mortgage? First, the interest rates are just a bit higher in these loans than in traditional mortgages, but not so much more but they aren t affordable. In addition, you may be required to make a larger deposit or down payment. Then the upside of this is that your income may not be considered when you are applying for the loan, so you may be able to get a great rate and even create a second income stream through the purchase of a buy to let property. We have a mission to help out every one who needs mortgages or other types of loans . Want to know more? Visit us at onlystop.com .
If you re shopping for a home loan, you can save thousands of dollars by being aware of predatory lending practices, in which you re charged too much for your loan or are forced to buy services you don t really need. You can protect yourself by learning to recognize the signs of predatory lending. The Center for Responsible Lending lists seven specific warning signs that consumers should be aware of when applying for a mortgage. The first warning sign is excessive points and loan origination fees. Since these fees are often financed as part of the loan, it s easy to hide them. Competitive lenders typically charge 1% or less of the loan amount, but predatory lenders often charge 5% or more, which can add up to thousands of dollars over the course of a home mortgage. The second sign is a high prepayment penalty. Mortgages don t have to contain a penalty for paying off a loan early. In fact, only about 2% of loans from competitive lenders include such a penalty. However, some 80% of predatory lenders build them into their loans. Since nonprime borrowers are often motivated to refinance their homes with lower loans once their credit improves, a stiff prepayment penalty–sometimes as much as six months of interest–can generate a substantial windfall when the loan is refinanced. Another warning sign is if a broker gets a kickback from a lender, in which a real estate broker delivers borrowers to a lender at a higher interest rate than the normally accepted rate. The lender then kicks back a “yield spread premium,” paying the difference back to the broker. This can add thousands to your overall mortgage premiums. Loan flipping is the fourth sign, in which the borrower is required to refinance the loan, often several times, over the course of the mortgage. The fees can be hefty, and are purely meant to add to the lender s bottom line. They can also reduce equity and increase monthly payments. Another warning sign is when you re told that buying extra services, such as credit life insurance, is mandatory for loan approval. These products are often unnecessary, and can also add thousands of dollars to your overall mortgage payments. The sixth sign to watch for is mandatory arbitration, in which you re told that any future dispute over the loan will need to be settled through arbitration, and not through the court. This can severely limit your rights, and sometimes you can be required to appear personally in the lender s home offices, which could be thousands of miles away. The final warning sign is if you find yourself being steered toward a less desirable type of mortgage, even if it appears as if you could qualify for a more favorable loan. Fannie Mae estimates than nearly half of nonprime borrowers could have qualified for better loans. To avoid being a victim of predatory loan practices, learn to recognize the seven warning signs. Copyright © 2006 Jeanette J. Fisher Jeanette Fisher, author of interior design, real estate, and credit books teaches first-time home buyers and real estate investors how to meet the five mortgage requirements beyond credit scores. Credit Articles http://worryfreecredit.com/articles.htm FREE Credit Help ebook Free Credit Information
Understanding Current Rate Mortgages (ARM) and Why They Change Home buyers who take on an adjustable rate mortgage (ARM) only to be hit later with unexpected costs or rising interest rates can t blame lenders for their troubles. Under current disclosure rules, lenders give every ARM borrower an educational packet that outlines and explains the mechanics of an adjustable rate mortgage. In this article, we ll give you an overview of how adjustable rate mortgages work and how lenders set their rates today. Basically, mortgage interest rates are tied to several indices like the U.S. government securities or the cost of fund rates like a Certificate of Deposit (CD) index, Cost of Funds Index, the London Interbank Offered Rate and others. The adjustable rate mortgages have a varying rate that s linked to those indices. The rate you re initially quoted will be lower than a fixed rate mortgage, but if the economy goes down and inflation begins to rise, your rate could go higher. Essentially, the market risk associated with inflation is passed on to you, the borrower, and not the lender. Lenders will add a small buffer onto the standard index rate, usually 2 to 3 percent. This is the note rate or actual interest rate that you ll be charged. Remember, when you apply for an adjustable rate mortgage or look at rates in their ads, you re seeing the teaser rate which is usually way below standard market values. You need to find out what the “note” rate is to get a true picture of the cost of borrowing. Once the note rate is set, the lender typically offers what s called a cap. There are lifetime caps and annual caps, and these limit the amount that a lender can raise or lower your interest rates. Usually, over a year, it s about 1.5 to 2 percent. The lifetime caps can go as high as 6 to 7 percent, depending on the lender. Remember, that cap is tied to the note rate and not your introductory rate. You also want to find out how often rates can be adjusted. Some lenders will adjust their rates monthly, while others do so annually, quarterly or even once every five years. Ask also about the notification process - will you get a month or two to prepare for the extra expense or will it come as a surprise? Some adjustable rate mortgages have conversion programs that allow you to convert to a fixed mortgage at some point during the term. If interest rates go low, you may also consider refinancing for a permanent fixed-rate loan. For information on practical home ownership preparation recommendations, please visit http://www.home-ownership-preparation.com , a popular site providing great insights concerning home purchase readiness, such as home inspection tools , FHA mortgage rates , and many more!
Credit Crunch Crisis? Bulgaria Still Booming The effects of the sub-prime mortgage fallout which hit the USA towards the end of 2007 and led to the so called credit crunch have done little to quash the desire of most Brits to own their own property, and although the uncertainty of these recent events has led to a slowing of the housing market, prices still remain very high, making it difficult for first time buyers to make the break into home ownership. This has caused many to look for new ways to get on the property ladder; some are looking to buy with friends or family, some are opting for mortgages worth five times their salary, and others are looking further a field to make their first purchase. One country that has proved particularly popular with British buyers is the Eastern European nation of Bulgaria. The country joined the EU in Jan 2007 (along with neighbouring country Romania) and has plenty going for it as a holiday destination, with beaches, ski resorts and vibrant cities, but then so do many countries in Europe, so what makes Bulgaria such an attractive proposition for British buyers? Well, the number one factor that attracts British buyers to Bulgaria is the price. In established holiday favourites such as France and Spain, property has long since risen beyond the reach of the average Joe, but in Bulgaria, it s still possible to buy holiday cottages , apartments and villas extremely cheaply; a quick Google search reveals property in rural areas that can be found for as little as £15000 - a sum that would get you little more than a garden shed in Western Europe. For around £30,000 - it s possible to pick up a ski apartment in Bansko or Borovets, Bulgaria s premier ski destinations. UK lenders have been quick to get in on the Bulgarian boom - creating special mortgages for Bulgaria property purchases, and according to one British lender, Bulgaria will account for 25% of all overseas mortgages by the year 2020, suggesting that Bulgaria s charms won t be wearing off any time soon. Other Eastern Bloc countries are also proving popular with British buyers - Slovakia s ski resorts, and medieval cities have tempted many looking for a bricks and mortgage bargain there, and Romania is being touted as the best investment in Europe, with expected property price rises of 400% over the next decade. However - it s not always easy to buy abroad, with the language barriers, differences in local law and currency fluctuations all creating hurdles for foreigners. Property experts say the best thing that buyers looking to purchase outside of their home country can do, is find a reputable, trustworthy local agent… unfortunately, something that is often easier said then done. Elisha Burberry is an online, freelance journalist and keen traveller and watersports enthusiast. Originally from Scotland, she now resides in London.
Finally! There s great news for Connecticut homeowners. FHA loan requirements have evolved for Connecticut mortgage loans. The changes were long overdue and the changes are mostly for rising Connecticut adjustable rate mortgages. You may be one of the many homeowners that have been looking to refinance your Connecticut home loan, so this lifeline may have come just in time for you. Before you go and give out your vital information you need to know the new FHA guidelines. Here are some of the major changes and program terms: The program is only valid until December 31st, 2008. Your current mortgage must be a non-FHA adjustable mortgage that has already reset or increased. If you have fallen behind on your mortgage due to the increase in the payment since it started adjusting you can still qualify. Your mortgage payment must show that the 6 month s prior to your mortgage payment changing you had on-time mortgage payment history. If there is sufficient equity in the home FHA will insure mortgages that include missed mortgage payments. If the loan amount that you need exceeds FHA mortgage amount limits or LTV limits then you may qualify for a second mortgage. This change is long overdue because many Connecticut adjustable rate mortgages have interest rates and payments that have reset. Reset simply means that the rate and monthly payment has adjusted upward (or downward in some cases) based on a number of factors determined by a group of banks or lending institutions. Most Connecticut homeowners were protected to some degree because of a adjustable rate mortgages that prevents your monthly payment from increasing too much at once. However, that cap can range from two to five percent higher you re your current interest rate. If you never worried about the rising interest rate then now is the time to reconsider. The best mortgage program that you can get to lock in your mortgage payment is a FHA loan. With a low FHA mortgage loan you can have a FHA loan prime rate and you will have FHA homeowner s assistance program if you hit a tough patch and need some relief on a couple of payments. Don t take unnecessary risks by going with a lender that can be closed next week when you can take advantage of a FHA government home loan that will give you the stability and monthly savings you need. Chris Rivers, a Connecticut FHA Lender, specializes in offering low FHA interest rates for Connecticut refinance mortgages even if you have late payments on your mortgage. When you need to refinance your Connecticut adjustable rate home mortgage into a fixed FHA rate mortgage with great credit scores then use a Connecticut FHA Mortgage . Get your FREE list of Connecticut mortgage lenders for homeowners with mortgage lates and low, bad or no credit .
A big concern for seniors these days is the energy-efficiency of their homes. With home energy costs predicted to rise sharply in the coming years, their concerns are valid. Rising energy costs could have an escalating negative impact on those with a fixed income and limited prospects for increasing earnings. Many seniors are also concerned about how climate change threatens the inheritance of their children and grandchildren. Turns out that those 62 years and older may have a secret weapon at their disposal for financing energy-efficient improvements to their home. It s called a reverse mortgage. Although misconceptions and myths abound, more than 300,000 Seniors have enjoyed the benefits of reverse mortgages since their inception in 1986. That number is predicted to grow exponentially with as many as 16,000,000 reverse mortgages executed by 2010. Reverse mortgages are loans for seniors 62 and over that allow them to convert a portion of their home s equity into tax-free income. The senior is paid by the lender in a lump sum or monthly installments. No payment on the loan is owed until the senior either dies or no longer uses the home for their primary residence. Since the loan can be used for any purpose, these funds can be used to off-set energy expenses. Take solar hot water as an example. Solar hot water generation is the low-hanging fruit of solar power s potential for reducing our energy needs. The technology costs a fraction of photovoltaic with a much quicker return on investment. The technology is low-tech with very little moving parts and low-to-no maintenance to be expected for the typical life expectancy of the senior. The installation of a solar hot water system for the average-sized home in Atlanta would run in the neighborhood of $6,500. $2,000 of that investment can be recaptured through federal energy tax credits [currently good through December, 2008]. So the system ends up costing about $4,500. The pay-off comes in a savings of energy required for hot water production in the 30 - 80 percent range for the homeowner [50% being the average]. The typical installation will pay for itself in as little as 2 years. This with funds that won t be paid back until the senior dies or sells the house. As energy issues grow, a solar hot water system is likely to increase the resale value and decrease time on market for the home, as well. All reasons why solar hot water systems frequently make the top ten lists of things you should do now to save energy. Also reasons why China saw the installation of 30,000,000 solar hot water systems in just the last year. American Baby Boomers have good reason to be anything but lukewarm on solar hot water. They have been the most dramatic change agents the world has seen. Using solutions like reverse mortgages + solar hot water, they can continue to do so. With the leading edge of Boomers turning 62 this year, they are poised to capitalize on this benefit to themselves and the planet in record numbers . Call it Gray Power Mortgages to the rescue. Burke Sisco is a licensed Real Estate Agent striving to also be a Change Agent. As one of Georgia s first certified EcoBrokers®, his passion is helping buyers and sellers of greener, healthier, more sustainable properties in the metro Atlanta area. He authors a blog, EcoHomeGuy.com, for people who are green-leaning and concerned with energy and environmental issues where they matter most: the home.
Bad credit mortgage loan is a mortgage that is availed using an existing property as collateral. Such mortgages are meant for people who have a bad credit history. Obviously, lenders take a significant amount of risk when they lend to people with a bad credit history. However, since collateral is involved, they do not mind providing the loan to customers who may require them. When borrowers miss a payment, are late in making a repayment, or default on a debt, they accrue a bad credit history. Such credit histories are referred to by agencies that give a score to a prospective borrower. The score will be available to lenders from these agencies and the lender will decide to provide a mortgage based on the score. It follows that those with a bad credit-history score will find it very difficult to get a mortgage because of the risks involved to the lender. There are many advantages in securing a bad credit mortgage loan. The most obvious reason is that customers will have cash at a lower interest rate that they can use to improve their credit histories. The second advantage is that the loan will allow borrowers to switch mortgage providers if they are unhappy with the services of the current lender. However, when one switches mortgage lenders, customers have to calculate how much they will have to pay the first lender in terms of redemption penalties. If the penalties are high and would override gains, it is better not to go in for such a loan. There are many lenders who specialise on bad credit mortgages. Bad credit mortgages can be availed as a secured mortgage. A secured bad credit mortgage is easier to avail because collateral has to be provided as security for the mortgage. People who have bad credit histories can improve their credit histories by beginning to repay their mortgage in a timely fashion. This can in the long run, help them to improve their credit history scores. If you would like more information on Bad Credit Mortgage , please visit our website: Mortgages UK
Lenders and mortgage businesses pushing low rate mortgages. Ads on the radio, print ads in the Business section of newspapers tell customers: 1 percent mortgages, $500K mortgage loans only $1,500/month, get into your dream house, etc. Above sounds very attractive to get a mortgage loans, but now with the adjustable rate much higher & value of houses declining, these people are defaulting! The default rates are rising, the financial institutions who made these loans are in trouble, but realtors are to blame. The radio ads don’t mention that the real rate gets added to the back of the loan every month, for example a $500k mortgage loan can end up being a $700k mortgage loan after a certain time because the interest is added to the end of the term instead of the beginning, that’s the reason why rate loans are low in the first place! Mortgage loan is the generic term for a loan secured by a mortgage on real property; the “mortgage” refers to the legal security, but the terms are often used interchangeably to refer to the mortgage loan. Mortgage loans generally refer to a loan secured by residential property, often for the purpose of acquiring the residence. Mortgage loans may be lower priced than other forms of borrowing because the value of the property reduces risk for the lender. There are many benefits of Mortgage Loans. Home owners get into their house they always dreamed of today, but what happens in five years from now, when the adjustable rates starts? Maybe they have to sell their home lower than what they paid for it and owe more than they think! There are lenders who explain this to customers at time of closing, but those things are often not explained in their radio ads, print ads, etc. Lenders try to close the deal from there! LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance. Source: http://www.lendadvisors.com/2007/03/08/low-rate-loans-may-hide-mortgage-interest-rate-bomb/
If you are looking for property development mortgages then you have to give them careful consideration, as with all types of mortgage. You are far better off going with a specialist mortgage broker to make sure you understand what you are getting into and to ensure that you get the best deal for your property development lending. When going for the this type of mortgage there are many factors that the lender will take into account - one of the main factors that is taken into consideration by the lender is the location of the property. There is also certain criteria that has to be met with the majority of for property development mortgages. For example you could be turned down by lenders if you haven t got three years Accounts to show or if you have an income that is variable or you have problems proving your income. However a specialist property development mortgages broker will be able to help in most circumstances and with some lenders can even give you funding for up to 90%. The specialist will be able to search for the best deals for you based on the information you provide them and then deliver the results for you to compare. As with any type of mortgage always make sure you read the small print of the mortgage policy including the key facts of the lending as with this is where you will find the terms and conditions of the loan. The finance rates for property development mortgages will vary for the mortgage depending on certain factors of the individual property developer; some of the main factors that are taken into account include your previous experience and the industry sector. As there are different criteria to meet and a property development mortgage is dependant on your circumstances then a specialist will be able to go through the criteria with you and ensure that you get the best deal possible. Sean Horton is a Director of Enhanced Wealth, a whole of market mortgage broker and IFA specialising in the provision of mortgage advice, income protection, mortgage protection and property development mortgages
UK house prices have risen over 130% in the past 10 years, for many prospective buyers it feels that getting on the housing ladder is beyond their reach. However despite the extravagant house price levels it is still possible for first time buyers and others on low incomes to be able to get a mortgage and buy your first house. Suggestions for getting a mortgage on a low income 1. Save a deposit. It might be difficult if you are paying monthly rent, however if you are disciplined to put away money each month over time this builds up and enables you to put down a deposit. Generally the bigger deposit you get the more chance you have of getting a good mortgage deal. If it is very difficult to save a sufficient deposit you could ask friends and family for a loan. However this approach may well have its drawbacks; you need to be able to have a good financial relationship with the person. 2. 100% Mortgage. If you are unable to save a deposit you can still get a mortgage by getting a 100% mortgage. Although these tend to have higher interest payments and may require Mortgage indemnity guarantees. 3. Joint Mortgage. Joint mortgages or co ownership mortgages have become increasingly popular in recent years as a practical solution to the difficulty of getting a mortgage on a relatively low income. Joint mortgages enable you to share the cost of a mortgage with another person (possibly more than 1). This then allows the building society to give a bigger loan. 4. Look at Affordability. Increasingly building societies will judge the size of a maximum loan amount depending upon affordability rather than income. This means that if you can reduce your monthly expenditures, you have a better chance of getting a mortgage. Similarly they will look at other debts you have and see the monthly repayments you need to make on these. If you are really keen to get a mortgage it may require some frugal expenditure to reduce monthly mortgage income. Once you get your first mortgage you can be a little more relaxed. However just before getting a mortgage you should try your hardest to reduce expenditure as much as possible. This enables you to present the best possible financial situation to a bank. 5. Self Certification Mortgage. This is probably the best option to get a mortgage much bigger than your income. You have to be careful in the sense that if you borrow too much and then interest rates rise, or your income falls a little you may be unable to meet the mortgage payments and your home could be repossessed. R.Pettinger is an Economics teacher at Oxford and writes frequently on the UK economy and mortgages. He edits a site about Mortgages including a guide to different types of mortgages For latest news on the UK housing market and UK mortgages see: UK Mortgage News
A guide to 15 different types of mortgages on offer in the UK. From Standard Variable Rate mortgages to more unconventional mortgages such as Current account and self certification mortgages 1. Standard Variable Mortgage The most common type of mortgage. Mortgage payments depend on the lenders SVR. This is usually influenced by the Bank of England Base Rate. 2. Fixed Rate Mortgage A mortgage with a period of 2-4 years where the interest rate on mortgage payments is fixed. There may be a slight premium for security, but it avoids interest payments becoming un affordable. 3. Capped Mortgage This is like a fixed rate mortgage. It states a maximum interest rate but it can fall under some circumstances. 4. Self Certification Mortgage A mortgage where there is not any need to prove your income through published accounts. Often taken by self employed. 5. Repayment Mortgage A mortgage where you pay both, interest on the loan and capital repayments. Most mortgages are repayment mortgages. It means at the end of your mortgage term you will have paid off your mortgage debt. 6. Interest Only Mortgage Mortgage where you only pay interest on loan and do not repay any capital. This requires a separate investment plan to be able to pay off the mortgage capital at the end of the mortgage term 7. Investment Mortgage. A type of interest only mortgage but where taking out a mortgage also involves taking out a complementary investment plan to be able to pay off the mortgage debt. 8. Endowment Mortgages Similar to an investment mortgage. There were many problems with endowment mortgages in the UK because often the investment failed to be sufficient to pay off debt. 9. Base Rate Tracker Mortgage Similar to a standard variable rate mortgage. This is a mortgage where the interest rate is fixed to a certain discount compared to the Bank of England Base Rate 10. 100% and 125% mortgages Usually it is necessary to pay a deposit of upto 10% of the house price. However with rising house prices many lenders are now offering a mortgage for the full amount. In some cases lender offer more than 100% to enable spending on the house itself. 11. Joint Mortgage A Joint mortgage involves buying a house with others to increase the chance of getting a mortgage. Also known as co buying mortgages. 12. Adverse Credit Mortgages Help for people looking for mortgages with bad credit ratings 13. The Never Ending Mortgage A new and quite small type of mortgage where there is no necessity to pay off the mortgage at all. Instead you can pass your mortgage onto your children. 14. Reverse Mortgage This is where you can receive income from the value of your house in return for the lender receiving an increasing share of the value of your house. 15. Buy to Let Mortgages This involves getting a mortgage to buy a house with the specific intention of renting it out. These mortgage are more dependent upon the state of the Housing market 16. Offset / Current Account Mortgage This is when your mortgage is combined with your current account at a bank or building society. If you have savings in your current account these are automatically used to reduce the mortgage capital you owe and therefore lower the level of mortgage interest payments. R.Pettinger manages a site about Mortgages in the UK. This site includes a guide to different types of mortgages and news about UK mortgages and the UK economy. http://www.mortgageguideuk.co.uk/
There are many things you should consider when it comes to buying a holiday home and taking on a holiday home mortgage. If you are thinking of letting the holiday home rather than just having it for your pleasure then you will have to give some serious thought as to the location of the property. While you might like a particular area, this doesn’t automatically mean that others will want spend their holiday there, things you should take into account here include the amenities in the surrounding area and what the surrounding area is like. Currently those thinking of taking out holiday home mortgages are around 900,000, with over 900 people taking out a buy to let mortgage every single day last year alone. When it comes down to choosing the best holiday let mortgage many have taken the sensible step of going with a specialist broker. This is simply because a broker can always find the best deal available for you. A broker is the safest option for your holiday home mortgage, while there are many lenders out there offering what seem to be bargain rates, many have found that while the rate are low there has been hidden high costs associated with them. The broker takes the guess work out of it and can always get you the cheapest and best deal simply because they know where to look and what to look for. Of course one of the main considerations you should make is when it comes to choosing the location of your holiday home, while a holiday home in the sun might be your first thought there are many people that spend their holiday in the UK and there are a huge range of popular locations throughout the UK. One of the biggest advantages that the specialist broker can give is that holiday home mortgages can be hard to arrange if you do it yourself, the main reason behind this is that a holiday let is usually excluded from the majority of buy to let mortgage schemes. However a broker who specialises in this type of mortgage can find you a loan which offers the best deal. Along with this a broker has access to the whole of the market along with many exclusive holiday let mortgage schemes and is backed by staff that are knowledgeable and professional which takes the strain from you and allows you to deal with other aspects relating to your new venture. Sean Horton is a Director of Holiday Let Mortgages which offers Second Property Mortgages to UK residents to finance a UK based holiday home. The site offers a Free Guide to download for Holiday Home Mortgages and the process for buying a UK Holiday Home.
Buying a home is usually the largest purchase any of us will make in a life time. When choosing a home, you want to find one that suits your families needs best. Take the same steps when choosing a mortgage company! When you are looking for a mortgage company, do your homework! Interview the loan officer and ask him what he or she has to offer you in terms of savings, interest rates and mortgage loan products. Ask for a Good Faith Estimate of Settlement charges. Ask the lender if there is a lock fee and for how long? A good lender should discuss with you the different programs that they offer. Most lenders offer VA, FHA and Conventional mortgage financing. You should discuss with the lender your future plans, such as how long you plan to live in the home. This will help them determine if a fixed rate or an adjustable rate mortgage works best for you. With interest rates still at record low, most homebuyers are taking a fixed rate mortgage if they plan on living in the home more than 3 years. Adjustable rate mortgages have many different terms that the rate is fixed, 1, 3, 5 and 7 years are the normal terms that are offered. Fixed rates assure you that the rate is fixed for the entire term of the loan. Loan terms offered are usually 15 or 30 years, however 10, 20 and 25 years are also available. Choosing the right mortgage company will help you make an intelligent decision and make the transaction go a lot smoother. Choosing the wrong mortgage company can result in higher rates, terms that you didn t understand and overall stressful experience. If you would like to know more, please visit my website. My website contains loan payment tools and calculators to help you understand more about what you can afford. You can also apply online. My contact information is on my website. Please feel free to visit us at www.bretlinfloridamortgage.com Glenn Keller is a veteran in the mortgage industry and is associated with Bretlin Home Mortgage of Florida in Jacksonville. Visit our website at http://www.bretlinfloridamortgage.com
Normally you think of mortgages taking money out of your pockets but in fact equity home loan mortgages are a good way to greatly increase your wealth. I am of course talking about using your home as collateral to borrow money to purchase more property. Done the right way you borrow enough to buy an investment property and rent out this building for as much as the market will give you. This rent then pays most or all of your equity home loan mortgage repayments and you sit back and watch the value of the investment rise. Do not over commit yourself on mortgage repayments over and above the rental income and this can be a nice, worry free investment for the future. That in its simplest form is a great wealth building exercise. Just bear in mind you may have to be patient because property does not always increase in value as quickly as it has over the last few years but over the long term gains are always worthwhile. Many people continue to work this formula as the value of their properties increase. They borrow against the increase in value and buy more properties. When you have enough investment property just borrow and take the money out for your own personal use. By this stage you would want your rents to have increased sufficiently to cover the mortgage repayments. You can of course sell any or all of your investments to benefit from the accrued capital gains, but best opinion is to hold onto property and just borrow against it. There may be very good tax reasons not to sell. Anyway the choice is yours but do explore this option if you have a reasonable equity in your home. It is one of the simplest plans for building Wealth. There are plenty of good books on the subject and your accountant or mortgage manager can always offer advice. Start your mortgage experience off on the right foot. Get helpful hints and avoid some common mistakes. Visit Michael Jay at http://homes-mortgages.blogspot.com/
Mortgages are getting less affordable, according to figures released by the Council of Mortgage Lenders, meaning that more people will struggle to keep up their repayments in the coming months. Interest payments now account for the largest proportion of mortgage holders incomes than at any time over the last 15 years, with first time buyers struggling most. Of their net monthly October income 20.6 per cent went on paying mortgage interest, a rise of 0.2 per cent in only a month. That is the highest it has been since 1991, the CML revealed. Home-movers also spent more on their interest payments, with the CML recording an average 17.6 per cent of net monthly income used to maintain home loan interest in October. That shows a slight increase on the previous month s total of 17.5 per cent, and is now at the highest level since 1992. But the Council of Mortgage Lenders welcomed the quarter per cent base rate cut in early December saying it would provide some much needed relief to those holding UK mortgages. Because another rate cut is widely predicted in the New Year many homebuyers who are on Standard Variable Rate (SVR) mortgages will benefit further. Indeed, the prospect of reducing interest rates are prompting more people to opt for SVR mortgages ahead of fixed rate products, with the latter accounting for 68 per cent of all loans in October, reduced from 72 per cent in September. CML Director Michael Coogan said: “For those customers whose fixed rate mortgage is coming to an end in 2008, the potential impact of higher monthly payments will be reduced by the cut in the bank rate this month, and hopefully other rate reductions to come early next year.” Although lending volumes remained healthy in October, showing a nine per cent rise on September s figures to total £33.5billion, the CML believes that the effects of the global credit crunch are still to be felt, as most of those loans would have been approved prior to its impact. To prove the point pipeline figures for mortgage approvals are already showing a slowdown and the organisation said it expected that over the coming months lending levels would be subdued . So, although the December interest rate cut has provided some relief for borrowers, with hopefully more on the way in the New Year, homeowners are still struggling as they now have to devote more of their income to paying mortgage interest. Andrew Regan is an online, freelance author from Scotland. He is a keen rugby player and enjoys travelling.
Home Mortgages: Should You Apply Now? If you’re thinking about applying for a new mortgage or refinancing your current mortgage, you might want to take action now. In its survey this week (the week of Aug. 1), Freddie Mac, the corporation that finances many of the country’s mortgages, reported that rates on 30-year, fixed-rate mortgages rose to a nationwide average of 5.82 percent. This represents the fifth week in a row that the rate on fixed-rate mortgages has gone up. This increase put the rate is at its highest since it averaged 5.91 percent for the week ending April 14. That’s the not-so-good news. The good news is that rates on 30-year mortgages are still reasonable and have, in fact, stayed below 6 percent for all but two weeks this year. This, of course, would be for a new mortgage. If you are thinking of refinancing your current mortgage, you might want to look into a 15-year, fixed rate mortgage. The rates on these mortgages averaged 5.38 percent this week. This compares with an interest rate average of 5.34 percent last week. Frank Nothaft, Freddie Mac s chief economist, has said that “Long-term mortgage rates will more than likely rise over the next few months.” Also, the Federal Reserve is expected to continue to increase a key short-term interest rate. It has increased this rate ten times since it began to tighten credit in June of 2004 and is expected to continue to increase this rate. Keep in mind that the nationwide interest rate averages quoted here do not include add-on fees known as points. Both 30-year and 15-year fixed-rate mortgages currently carry an average fee of 0.6 point Last year at this time, 30-year mortgages had an average interest rate of 5.99 percent and 15-year mortgages were at 5.40 percent. This means that right now, your interest rate on a new mortgage would probably be slightly less than a year ago. So, if you need a new mortgage or want to refinance your existing mortgage, now could be a pretty good time. Have you heard about HD radio technology? It makes AM sound as good as FM and FM sound almost like you were listening to a CD … and its free! To learn more about this amazing new technology, just go my Web site, http://www.hd-radio-home.com , to get all the buzz. Douglas Hanna is a retired marketing executive and the author of numerous articles on HD radio and family finances.
As the housing market tries to find its footing, the mortgage rates have eased. The lowering of mortgage home loan rates seems to be a response to the Federal Reserve s (Fed) decision to cut interest rates recently. The Fed gave the home buying and mortgage markets much needed respite by cutting short-term interest rates for the second time in two months. The Fed s rate cut by a quarter-point to 4.5% was an attempt to forestall the existing apprehensions in the housing, mortgage loan, and credit markets trickling over to the larger economy and dipping the US into recession. Currently, Wall Street is anticipating a housing correction in the near future, as the home market hasn t reached the bottom. The Fed is anticipating a slowdown of the economy next year, hence is attempting to steer the economy clear of a possible recession next year. It is using monetary policy to do it. Monetary policy is a central bank tool used for either an expansionary policy or a contractionary policy. Expansionary policy is an attempt by the Fed to tackle unemployment in a recession by lowering interest rates. The Fed funds rate is lowered leading to an increase in the total supply of money in the economy. Alternatively, a contractionary policy is used by the Fed to tackle inflation by raising interest rates. The Fed funds rate is increased leading to a decrease in the total supply of money in the economy, thus cooling an overheated economy. The interest rate cut may provide the economy a much needed boost to uplift the sagging morale of business, Wall Street, investors, and consumers. However, the lowered home mortgage rates may provide the need impetus to home buyers on the sidelines to jump at the opportunity to buy a home. Despite the warnings of further economic corrections, the economy has been resilient thus far, even with the subprime mortgages fiasco, foreclosures, lowering of residential real estate prices, increase in food costs, and oil prices approaching $100 a barrel. But the rates for adjustable rate mortgages (ARMs) fell following the Central Bank s interest rate cuts. According to Freddie Mac, the five-year adjustable-rate mortgages averaged 5.89 percent, down from an average of 6.08 percent, a year ago. While one-year ARMs averaged 5.50 percent, a decrease from 5.55 percent last year. Also, the rates on 15-year fixed-rate home loans averaged 5.90 percent; last year, the 15-year rate averaged 6.04 percent. The rate cuts provide a great opportunity to potential home buyers to strike while the iron is hot with great low mortgage rates. In addition, it the perfect time to convert ARMs and interest only mortgages to low fixed rate mortgages. Home Buying More Attractive Due To Mortgage Rate Cut Gimmie The Scoop.com
