there is almost a minimal chance that you will be able to get a 100 percent mortgage these days due to the current economic climate. Banks simply are not lending, and a 100 percent mortgage is very a thing of the past.
It was only a year ago that my friend managed to get a 100 percent mortgage, but if she tried now, i am pretty sure she would be refused. The banks don't have the money to lend, so a 100 percent mortgage is very risky for them.
However, i think it is a shame that people are being turned down for mortgages at this moment in time. I hope the market will pick up again and getting a 100 percent mortgage will become possible once again.
Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts
Thursday, 22 January 2009
Monday, 22 September 2008
Have You Considered a Debt Consolidation Mortgage?
A debt consolidation mortgage is another term for an adverse credit mortgage, which may be used for this purpose. It may be interesting to note that many of the people who take out a debt consolidation mortgage are remortgagers who are trying to get their finances in order.
Basically, if you have a mortgage and yet also have financial problems, then you may look for an adverse credit mortgage to help sort out your personal finances. There can be many reasons for ending up in financial difficulty, not least with the credit crunch hitting us hard, so a debt consolidation mortgage might seem like the only way out to fix your finances and wipe the slate clean.
Many consider a debt consolidation mortgage as the first step to correcting their credit status. In the past year, the number of people taking out loans for this purpose has risen, and this may be because of the overall debt situation in the UK. Therefore, it is clear that some people who get a debt consolidation mortgage use the chance to use some of the equity in their home to repay existing debts.
Everyone has their own way of dealing with debt, but i suggest that is exactly what you do - deal with it; face it head on and don't brush it under the carpet and think it will go away, because it won't. There can be light at the end of the tunnel, but make sure you search for it.
Mortgage Debt And The Fear Of Repossession
When you take out a mortgage, naturally you then become in debt. It is a loan you are taking out and therefore has to be repayed. I think some people forget that a mortgage debt is still a debt, yet it is slightly different to a normal credit card debt, for example.
With a mortgage debt, you have to ensure that you keep up your repayments on the home you have, otherwise it may be repossessed.
Repossession is a drastic move, but sometimes it is the only way for lenders to claim back the lost money. In August 08 it was reported that the number of homes being repossessed has risen by an incredible 24% since 2007. These are worrying figures which mean people have been attracted by the offers of 100% mortgages which they can then not repay.
Lets just clarify the repossession process. It does not always mean that the mortgage holder loses their home. It is more a case of when the court grants an order for for the possession of a home. This process can actually be abandoned if the mortgage lender and borrower can come to some sort of agreement for a repayment deal.
In the second three months of 2008, mortgage possession claims grew by grew by 17%, compared with the same period a year earlier.
MORTGAGE POSSESSION ORDERS MADE - Source: Ministry of Justice
I think this shows just how big a mortgage debt can be, and taking out a 100% mortgage that you can't afford just isn't recommended, nor is it likely to be something offered by lenders anymore.
With a mortgage debt, you have to ensure that you keep up your repayments on the home you have, otherwise it may be repossessed.
Repossession is a drastic move, but sometimes it is the only way for lenders to claim back the lost money. In August 08 it was reported that the number of homes being repossessed has risen by an incredible 24% since 2007. These are worrying figures which mean people have been attracted by the offers of 100% mortgages which they can then not repay.
Lets just clarify the repossession process. It does not always mean that the mortgage holder loses their home. It is more a case of when the court grants an order for for the possession of a home. This process can actually be abandoned if the mortgage lender and borrower can come to some sort of agreement for a repayment deal.
In the second three months of 2008, mortgage possession claims grew by grew by 17%, compared with the same period a year earlier.
MORTGAGE POSSESSION ORDERS MADE - Source: Ministry of Justice
I think this shows just how big a mortgage debt can be, and taking out a 100% mortgage that you can't afford just isn't recommended, nor is it likely to be something offered by lenders anymore.
Understand A Tracker Mortgage
The tracker mortgage shadows the movement of the Bank of England Base Rate. Tending to offer a low rate compared to say a fixed rate or flexible mortgage, the tracker mortgage benefits from reflecting current economic conditions. Your payments will drop if the base rate drops, but will also rise if it rises.
Tracker mortgages are often more suited to borrowers who are looking for cheap initial payments and who can also take the risk that their payments could increase at a later date. Having a good, solid joint income will help ensure this is the right option for you. Also, some savings set aside for if the tracker mortgage rate rises will be beneficial to you. If your income doesn't increase then you will need to make sure you can pay your mortgage for that particular month(s) if the rate rises.
Whenever you are taking out a loan, be sure to read the small print. The interest rate will be set at a certain amount below base rate for 2 years. Be careful though, as your lender may reserve the right to review the situation should the base rate fall too low. You may also find that they specify a minimum rate that you will have to pay if the base rate plunges below expectations, in order to protect them from you ending up paying a very low mortgage rate. At the end of the day, these small print clauses then defeat the whole point of the tracker mortgage, so make sure you understand everything before agreeing.
First Time Buyer Mortgages - An Uneasy Start
In September 2008, it was reported that in July, 47,400 house purchase loans worth £7.1 billion were approved. This might seem like a lot, but when you consider that this was actually a 51% fall in volume and 54% decline in value on July 2007, then you start to realise just how bad the housing market is at the moment.
First time buyer mortgages also declined to 17,300, down 5% on June and 48% on July 2007.
If first time buyers can't even get a mortgage, then how will the property market survive? Many property developers are in the business that they are because they know they can renovate a house and price it at an amount that will instantly appeal to first time buyers.
I think it is awful that first time buyer mortgages are becoming less readily available. I would be interested to know just how many of us would be able to get a 100% mortgage these days. Many mortgage lenders simply fear that the money will not be able to be paid back.
Gill Montia from Financemarkets.co.uk reported that the average first-time buyer deposit rose from 13% in June, to 15% in July. As a result, the average loan-to-value ratio for a first-time buyer fell to 3.24 times income, down from 3.33 times income in June and reverting to the level recorded in July 2006.
I have to wonder just how much longer this situation can continue. Many first time buyers are being suitably "put off" by all the financial problems we are seeing in the news. With banks going bust and lenders holding onto their money tighter than ever, first time buyer mortgages are going to be hard to come by.
Compare Mortgages - Make The Right Choice
At this crucial time, it is more important than ever to compare mortgages. It might seem stressful to think about where you're going start, but i recommend going into your local building society and discussing the options. I am with The Leeds Building Society and i have found their services to be most helpful.
Or, you may prefer to scour the online resources and compare mortgages that way. I have complied a list of some the websites you can visit to help sort out your mortgage.
If you compare your mortgages online it will mean you can see the different quotes all in one place, and compare and contrast them all. However, you may prefer to go into each bank / building society and speak with an advisor before making any commitments. Speaking face to face can help sort out any queries you may have, whereas an online quote will only give you the bare facts. Maybe combine the two and don't make any hasty decisions before comparing all the mortgage options.
Know All About Your Fixed Rate Mortgage
A fixed rate mortgage is a loan where the interest rate remains the same throughout the loan repayment period.
This could benefit those of us who have a steady income and are aware of our outgoings each month in relation to the outgoing loan repayment for the mortgage. I have a few friends that have a fixed rate mortgage and they find it easier to be able to plan ahead for the next few years, because they know exactly what they will be paying. If you are struggling to find suitable work or have had a history of bad financial problems, then perhaps the fixed rate mortgage will not work for you, as paying a set amount each month could easily land you in debt.
On 17th September 2008, the Daily Mail reported that fixed rate mortgages have dropped below 5% as competition returns to the market. This is good news for buyers and current fixed rate mortgage holders. However, it was also reported that the cheaper 2 year deals have come with a catch, which means there is an arrangement fee of more than £3000.
The cost of a three-year fixed rate mortgage has fallen by around 0.56 per cent, while best buy five-year deals are down by an average of 0.4 per cent.
Does this mean that people are going to prefer to rent? Perhaps many of us will wait until this mess has been sorted out before trying to get on the property ladder or even considering taking out any sort of loan. I think people are genuinely frightened by the housing crisis at the moment and the fact that our property could be worth less than it was 10 years ago.
A fixed rate mortgage might seem like the best option, but it is more a case of who will be able to get one at the moment and is it worth even trying?
Buy To Let Mortgages - Know Your Area!
When considering a buy to let property, make sure you choose the right area. Location is of paramount importance in these crucial times. Choose the wrong area and you could see any potential profit disappear before your eyes.
When deciding upon the area in which to invest, ask a few estate agents who live locally and know the market well. They will be able to tell you about those areas that are in need of development, those areas that are quite affluent and also inform you of any other details that aren't necessarily local knowledge. Knowing what is in current demand will help you make the right choice.
Many people considering buy to let mortgages may well be prepared to do a little bit of maintenance on a property, perhaps then paying less for the house due to the work it requires. If you are capable of doing this, then by all means go ahead and renovate the property a little. If it makes it more appealing to prospective tenants, then obviously this is the most important thing, as this could increase your potential profit income.
I think it is important to minimise the chances of any void periods, so where there is no tenant in your property and you are losing income to pay back the buy to let mortgage. Naturally, this is a likelihood that one should take into account and it cannot necessarily be avoided, but can be minimised by making sure there is a new tenant lined up when the old tenant leaves. Show people round the property while the current tenant is still there with only a few weeks until they leave, so by that time, you may have a new tenant ready to move in and loss of income is minimised.
When deciding upon the area in which to invest, ask a few estate agents who live locally and know the market well. They will be able to tell you about those areas that are in need of development, those areas that are quite affluent and also inform you of any other details that aren't necessarily local knowledge. Knowing what is in current demand will help you make the right choice.
Many people considering buy to let mortgages may well be prepared to do a little bit of maintenance on a property, perhaps then paying less for the house due to the work it requires. If you are capable of doing this, then by all means go ahead and renovate the property a little. If it makes it more appealing to prospective tenants, then obviously this is the most important thing, as this could increase your potential profit income.
I think it is important to minimise the chances of any void periods, so where there is no tenant in your property and you are losing income to pay back the buy to let mortgage. Naturally, this is a likelihood that one should take into account and it cannot necessarily be avoided, but can be minimised by making sure there is a new tenant lined up when the old tenant leaves. Show people round the property while the current tenant is still there with only a few weeks until they leave, so by that time, you may have a new tenant ready to move in and loss of income is minimised.
What Are Buy To Let Mortgages
If you are considering a buy to let mortgage, then make sure you understand the basics. At a time of economic gloom such as this, making the right financial decisions is more important than ever.
Buy to let mortgages are specifically designed for people who want to really get stuck into the property market and buy one or any number of properties to then let to tenants. The owner's benefit is then being able to cash in on the capital value of the house itself. The loan repayment can be met by ensuring occupancy of the houses. The only question is, is this still a viable investment anymore? With house prices falling dramatically, one has to wonder if a buy to let investment is really worth it. The profit that was once readily obtainable has probably dropped significantly.
With the buy to let phenomenon driving house prices over the last few years, it may well just start to slow down now. However, one thing does remain, and that is the need of rental properties. With students guaranteed to need accommodation, this could be a good investment. Also, those on low incomes that have been refused a mortgage because of the recent credit crunch, will be desperately seeking rental properties at reasonable prices. Both parties could win here - the tenants and the landlord - if both are prepared to 'give' a little.
Buy to Let Mortgages specifically allow the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. This is a huge advantage for many mortgage lenders and tenants. The terms of buy to let mortgages are likely to be somewhere in the region of 5 to 45 years, although this could indeed waiver as the economic slump hits us.
Buy to let mortgages are specifically designed for people who want to really get stuck into the property market and buy one or any number of properties to then let to tenants. The owner's benefit is then being able to cash in on the capital value of the house itself. The loan repayment can be met by ensuring occupancy of the houses. The only question is, is this still a viable investment anymore? With house prices falling dramatically, one has to wonder if a buy to let investment is really worth it. The profit that was once readily obtainable has probably dropped significantly.
With the buy to let phenomenon driving house prices over the last few years, it may well just start to slow down now. However, one thing does remain, and that is the need of rental properties. With students guaranteed to need accommodation, this could be a good investment. Also, those on low incomes that have been refused a mortgage because of the recent credit crunch, will be desperately seeking rental properties at reasonable prices. Both parties could win here - the tenants and the landlord - if both are prepared to 'give' a little.
Buy to Let Mortgages specifically allow the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. This is a huge advantage for many mortgage lenders and tenants. The terms of buy to let mortgages are likely to be somewhere in the region of 5 to 45 years, although this could indeed waiver as the economic slump hits us.
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