Mortgages & me
Bringing both explanation and humour (yes, it is possible) to an often perceived realm of boredom
Mortgages. Let’s not kid ourselves here. If you had the choice of having one or not then there would be no choice. However, the vast majority of us, Russian billionaires excluded, need them to fuel that much loved British tradition – homeownership. So, if we all accept that we need them, you may as well do something positive and get the best one for you. It is staggering how many people make sure they get value for money from every day items but do not manage their home loan properly - the savings far outweigh the difference between the best baked beans and the value ones.
So, this blog will attempt to look at the world of mortgages and the housing market and try to bring both explanation and humour (yes, it is possible), and spark some comment, to an oft perceived realm of boredom. Here goes…
27/03/2013 by
So the British Bankers Association’s (BBA) February figures show a drop in mortgage approvals for purchases of 6% compared to the same month in 2012. Many industry analysts claim the drop is a timely reminder that despite last year’s introduction of the Funding for Lending scheme, the mortgage and housing markets were still a long way off functioning properly. The BBA report then makes the blindingly obvious statement that more First Time buyers would help. How though do you find more of the supposedly elusive creatures? With rental prices being driven ever higher, there are many people who’d rather pay their own mortgage than someone else’s.
However there would appear to be two main factors stopping a new First Time Buyer making the move into property ownership, Lending Criteria and Consumer confidence.
Lending criteria particularly for First Time Buyers is still far too prohibitive and many good cases are being declined for reasons that most sane people would describe as petty. After the mortgage price war we’ve seen over the past few months, a relaxation in criteria would seem the only logical step left to try and increase lending levels, however lenders are worried about going too far and being described as reckless.
Consumer confidence is still running low, as the stubbornly high inflation level and low wage growth continues to squeeze household incomes, leaving many would be borrowers without the appetite to take on debt. The economic outlook remains uncertain at best, and it would seem that it’s not likely to change anytime soon. The plus point though is that many properties are more realistically priced, and therefore offering better value for money. It could be said to be a great time to buy.
More schemes that essentially prop up the big house builders (First Buy, NewBuy, Help To Buy) are not the answer, decent product innovation is. For those who don’t have access to the ‘Bank of Mum & Dad’, a good example of this is the Saffron Building Society’s ‘Rent To Buy’ scheme. The product is open to those want-to-be First Time Buyers who have been renting for a minimum of 12 months, and it’s available at 95% LTV upto a maximum loan size of £500,000. The core principle of the scheme is that by only opening it to applicants who’ve been renting for 12 months, they are looking at people who are already experienced at running a household and therefore more likely to handle a mortgage payment that’s likely to be at least the equivalent of the rent. The rate is fixed until 31/08/2016, but there are no penalties for overpayments or early redemption, and crucially, the lender ‘credit checks’ rather than ‘credit scores’ which makes it more likely for a sensible lending decision to be reached. More of this type of product is what we need to get the market (and people) moving again..
Categories: Mortgages, Interest rates, House Prices, Mortgage Lenders, First time buyers, Government
12/02/2013 by
Marsden Building Society has just launched a 3.99% fixed rate to 31/7/15 for LTVs up to 90%, which is available for both purchases and remortgages. Not only is this the first time for nearly 10 years that the 4% barrier has been...
Categories: Home Mover, Interest rates, Buy to let, First time buyers
10/01/2013 by
The launch of Barclay’s new “Family Springboard” mortgage has once again brought that stalwart financial institution the “Bank of Mum & Dad” into the spotlight. Typically when aiding their offspring in buying their own home,...
Categories: Mortgages, Interest rates, First time buyers
12/12/2012 by
In what’s sure to start an interesting debate, a building society has claimed that if lenders (the high street) don’t get rid of their “computer says no!” approach to mortgages, the average age of a First Time Buyer will increase...
Categories: Mortgages, Interest rates, House Prices, First time buyers
19/11/2012 by
A broker has just claimed that last month they saw the largest take up of two year fixed rates so far this year, mainly on the back of lenders raising their Standard Variable Rates (SVR) over the past few months! Not an earth...
Categories: Mortgages, Interest rates, Mortgage Lenders, Long term fixed rates, Fixed rate mortgages, First time buyers, Remortgaging, Moving Home, Home Mover
02/07/2012 by
John Charcol has been selected by the UK's newest, and some would say brightest, lender in the market. Their transparent and excellent priced mortgages are a breath of fresh air. To find out more, take a look at the press...
Categories: First time buyers, Remortgaging, Moving Home, Buy to let
21/06/2012 by
Good lord. The mortgage market really is the proverbial fiddler's elbow. The days when one rate broadly governed the whole of the market seem as distant as last week's holiday. These days you need to be aware of a great number...
Categories: Buy to let, Variable mortgages, Fixed rate mortgages, First time buyers, Remortgaging
09/12/2011 by
Guest Blog, Alistair Hargreaves, Mortgage Consultant.
Is everything really going wrong? Looking at the response to the budget, especially around housing and you would certainly think so. Don’t get me wrong; it’s tough out there...
Categories: First time buyers, Fixed rate mortgages, Tracker mortgages
08/12/2011 by
TODAY'S MPC MEETING A SIDESHOW WITH ALL EYES ON THE ECB MEETING
• Eurozone crisis Summit will Determine the Fate of he Euro
Ray Boulger of leading independent mortgage adviser John Charcol comments on the news that the MPC...
Categories: Mortgages, Interest rates, House Prices, First time buyers, Remortgaging, Moving Home
25/11/2011 by
Following reports in the press that First Time Buyers aren’t aware of the return of High LTV’s (Loan To Value), we thought it worth making a bit of a splash about this. ...
Categories: Long term fixed rates, Tracker mortgages, Fixed rate mortgages, First time buyers, Mortgages, Interest rates
The blog postings on this site solely reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and neither John Charcol nor Drew Wotherspoon will accept liability for them.