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Whilst we aim to ensure that the details in the following blog entries are correct at the time of writing. However , please be advised that any references to legislation and taxation may become out of date.

Borrowers could be forced to wait weeks for an appointment with lenders’ mortgage advisers after the Mortgage Market Review as firms race to get qualified staff in place. Last week, a Nationwide business development manager warned that customers could expect waiting times of up to a month to see one of their mortgage advisers. He also said that face-to-face meetings could take between three and three-and-a-half hours from 26 April, when the rules come into place. Nationwide has tried to play down the concerns, saying: “Over the last year, Nationwide has increased the number of mortgage consultants available in branch. Availability of mortgage appointments is in line with demand and the society expects no material change to this post-MMR.” But experts believe lenders will struggle with the new non-advised sales ban, where all sales must be advised where there is any form of “interactive dialogue” with a customer. Moreover, the new rules require lenders to capture more detail from the borrower to ensure they can afford their loan. It is a sign that lenders are getting everything into place but there are going to be teething issues with the implementation of the new rules. As a result it may well be that some clients feel they are more suited to going to a mortgage intermediary (broker) if they feel they want to move forward a lot quicker than a direct lender can offer them. Association of Mortgage Intermediaries chief executive Robert Sinclair says: “I don’t anticipate any issues in the intermediary world in that we have already been taking in the kind of detail required under the MMR for some time. The big change is in the direct world, because of the requirement to take more detail than they have in the past. There will be delays – that may be in getting an appointment or how long those appointments take.”
Posted: 02/04/2014 12:21:35 by Mark Williams | with 0 comments


The interest-only mortgage timebomb is ticking loudly and will only get louder according to statistics revealed in the Financial Conduct Authority’s (FCA) thematic review into interest-only mortgages, which was published earlier this year.

The review revealed there are now 2.6m interest-only mortgages due for repayment by 2041.

Worryingly, as many as 48% of those face a shortfall at repayment day, with an average figure of around £71,000.

Even more worryingly, the review found that 260,000 (10%) borrowers have no repayment plan of any kind.

Many of these borrowers believe they only have very limited options. Either they can hope that their mortgage provider does not notice that their mortgage term has ended and continue paying interest as they have always done, or they can sell their home.

By downsizing to a smaller property they could afford to pay off the original mortgage. The first option, for obvious reasons, is unlikely and just not sustainable in the long term, while the selling up option is undesirable for many.

At the same time, recent figures have revealed that the UK’s over sixties are sitting on properties with a total value of £1.28 trillion - a massive figure, illustrating the potential of utilizing property effectively to support the income of older homeowners and help those struggling for viable options when dealing with their interest-only mortgages.

A growing amount of customers are older homeowners with interest-only mortgages who are faced with the problem of their own personal mortgage ‘timebomb’ and losing their homes if they do not have sufficient funds at the end of the mortgage term to pay off the remaining debt.

An equity release lifetime mortgage can offer a solution to this, as it allows homeowners to unlock capital from their home whilst retaining ownership of their own home, negating the need to downsize.

If you are sitting on a valuable asset why not use it to your advantage?

A lifetime mortgage also means very little change from the customer’s current mortgage situation, as they can continue to make monthly interest payments as they have always done.

However the key benefit is that the customer no longer has to worry that their mortgage provider will come knocking on their door asking for the remaining debt.

After all, they have probably spent much of their life looking after their home – isn’t it time perhaps that their home looks after them?

If you know someone who potentially may be facing this problem, I would be more than happy to talk to them about it, and go through the options available to make sure that their roof stays exactly where it should be – over their head.
 
As always , thanks for your attention.
 
Mark (mark@themortgagemonkey.co.uk)
Posted: 25/11/2013 10:27:52 by Mark Williams | with 0 comments


A sharp spike in swap rates has prompted a warning that fixed rate pricing has bottomed out and borrowers could miss out if they wait to secure a mortgage.

Between 12 and 14 August, two-year swap rates have jumped 7 basis points to 0.84 per cent, while five and 10-year swaps have rocketed by 17 and 15 basis points to 1.75 per cent and 2.76 per cent, respectively.

Perhaps surprisingly, swap rates remained fairly static in the days after new Bank of England governor Mark Carney last week announced his decision to introduce “forward guidance” on the potential movement of base rate.

He announced the BoE would not increase base rate from a record-low 0.5 per cent until the UK’s unemployment rate fell below 7 per cent, or if inflation spikes.

This all reinforces that fixed rates are on the floor and for most people there is little or nothing to be gained by waiting for lower rates.

For those looking to remortgage, increasing property prices, a trend likely to continue for at least two years, will enable some homeowners to benefit from the cheaper rates available at lower Loan to Value %, especially if they are on a repayment mortgage and/or overpaying.

Depending on the rate they are currently paying, borrowers in this situation may benefit from waiting a short while to enable them to take advantage of the better rates available at lower Loan to Value %.

However, this strategy runs the risk that rates will rise before the lower level is achieved.

Over the past few weeks the picture for fixed rate pricing has been mixed with some lenders cutting their rates while others have increased theirs. 

If you would like to see what you can achieve currently , feel  free to get in touch.

As always , thanks for your attention.

Mark
Posted: 15/08/2013 17:14:49 by Mark Williams | with 0 comments


 

Figures from housing charity Shelter have found that 56% of borrowers would struggle to keep up with their mortgage payments if interest rates rose by 1%.
 
More worryingly, 11% said they would be unable to pay monthly payments altogether.
 
Campbell Robb, Shelter's chief executive, said: “These shocking findings show that over half of mortgage holders are living on a knife edge and could be tipped into a spiral of debt if their mortgage payments went up. “
 
Despite the Bank of England interest rate remaining low, current pressures on banks mean that mortgage rates are rising it is a concern that many people won't have plans in place to manage increased costs.
 
Meanwhile, Santander will lift its standard variable rate from 4.24% to 4.74% tomorrow. The move, which the bank blames on a range of factors including higher wholesale costs, will add £26 a month to the average cost of a £100,000 mortgage.  
 
It is no surprise therefore , that despite the Base Rate remaining currently static, the popularity of fixed rates has been steadily climbing in recent months as mortgage holders endeavour to secure their position financially whilst rates are low.
 
If you are concerned about maintaining your mortgage in the event of a rate change and would like to consider alternatives, please feel free to get in touch.
Posted: 02/10/2012 10:07:05 by Mark Williams | with 0 comments


The government recently announced its backing of a mortgage indemnity scheme that will allow higher loan to value lending for buyers of new build properties.

The full details of the scheme won’t be finalised until the spring, but we have compared the new scheme with Firstbuy, the government backed shared equity scheme announced in this year’s Budget.

 

We believe borrowers looking at the new build indemnity scheme will share similar characteristics with those for whom Firstbuy was aimed at, in that they do not have a big enough deposit to borrow on the open market.

Here are the facts -

  • With the indemnity scheme, the builder puts in 3.5% of the value of the property
  • With Firstbuy, they put in 10%.
  • This means the indemnity scheme will enable a builder to support around three times as many properties with the same sum of capital than with Firstbuy.
  • For borrowers, it will not reduce monthly costs as a shared equity loan does, but it does not require the borrower to find a large cash sum at a future date.
  • Borrowers with Firstbuy have to repay the equity loan in the future.
  • The indemnity scheme will only be available to borrowers taking out a repayment mortgage. So, if in seven years house prices are roughly the same, those who borrowed with a 5% deposit today will be sitting on equity of over 20%, worked out using a notional interest rate of 5%. So anyone using the indemnity scheme to buy a property should be easily able to remortgage onto any product once their equity has increased sufficiently.


The main point to make though is that from a customer’s point of view, this scheme should re-open access to higher Loan to value lending, and many may find that preferable to share equity.

But, borrowers need to recognise that taking out one of these loans is no different to taking out any other 95% Loan to value mortgage, and they have to weigh up the level of risk with their desire to be home owners.

Posted: 05/12/2011 11:08:34 by Mark Williams | with 0 comments


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