‘Mortgages’ News
Bank of England keeps base rate steady
Posted 2008-06-5
The Bank of England opted to freeze its base interest rate at five per cent yesterday.Economists had not been expecting a cut, despite the need to boost the economy and stop the restrictions on mortgage lending, due to the recent jump in inflation.Henk Potts, equity strategist at Barclays Stockbrokers, said: "The Monetary Policy Committee finds itself in the middle of a difficult balancing act, involving rising inflation on one side and slowing economic growth on the other. "There is no doubt that UK economic growth is moderating."In a further blow to homeowners or those looking to take out a mortgage, the interest rate announcement came as Halifax revealed house prices have fallen by 2.4 per cent in May.The average house price is now £184,111.It was the second biggest fall on record, with house prices declining by 2.5 per cent in March this year....
Read Bank of England keeps base rate steady
-
Delicious -
Digg -
Reddit -
Facebook -
Stumbleupon
Not having mortgage life insurance is a “risky strategy”
Posted 2008-06-5
An expert has warned that not taking out life insurance with a mortgage is a "risky strategy".Plan Insure states that that due to the credit crunch fewer people are willing to part with the extra money it costs each month to have a life insurance plan in place."It doesnt surprise me that, because of the difficulties people are facing, this problem has become more severe. But it is a risky strategy, for all sorts of reasons," Simon Firmin, life and pensions adviser for the company, says.He adds that life cover is "vital" as without it people will struggle to cope with potential difficulties.Mr Firmin continued to say that there is also an increasing number of borrowers opting for basic life cover rather than full protection.Recent research from My Mortgage Direct found that only one in five borrowers are signing up for life assurance along with their new mortgage deal, with many citing financial difficulties as the reason they have not taken out cover.In related news, the Times has reported that an increasing number of homeowners are opting to take mortgage holidays as they are having trouble making their repayments....
Read Not having mortgage life insurance is a “risky strategy”
Expert: Always worth searching for a better mortgage deal
Posted 2008-06-4
It is always worth comparing mortgage deals to find a more competitive rate, according to one expert.Your Mortgage has stated that despite the tightening of the mortgage market in the past six months it is still worth hunting for a good deal.Pauline McCallion, editor of the online resource, said that, as the cost of living is currently increasing, "it makes sense to try and cut costs where you can".However, she added that there are limitations on the market at the moment, with some lenders only accepting applications from certain types of customer and a number of building societies just lending to their members.The British Bankers Association recently reported that the number of people switching mortgage deals increased by 24 per cent to 74,722 in April this year.In related news, the Financial Services Authority claims that 1.4 million people are due to come off fixed-rate deals this year and could be searching for another mortgage. ...
Read Expert: Always worth searching for a better mortgage deal
Borrowers ‘taking more mortgage holidays’
Posted 2008-06-3
Homeowners are increasingly hoping to take a mortgage holiday to relieve their financial pressures, it has emerged.The Times reports that a number of major lenders have noted a rise in borrowers taking such a break, which enables them to skip payments for up to a year.Sue Anderson, of the Council of Mortgage Lenders, told the newspaper that this is a clear sign people are struggling with their day-to-day expenses.Bradford and Bingley added that an increasing number of borrowers have fallen into arrears and are restructuring their finances to cope with this.According to the publication, debt charities have also noted this emerging trend, with Chris Tapp of Credit Action saying that they expect it to continue over the coming months.This follows news from Citigroup that 250,000 homeowners are in negative equity, with the figure forecast to reach one million by the end of 2009....
Read Borrowers ‘taking more mortgage holidays’
First-time buyers ‘unable to get on the property ladder’
Posted 2008-06-3
First-time buyers are being squeezed out of the housing market and are unable to afford homes in their local area, it has emerged.A report from Hometrack asserts that 28.3 per cent of would-be homeowners are unable to afford a property in their locality. First-time buyers in London and the south-west are in the worst position, with 41 per cent and 40 per cent respectively being unable to get on the ladder.The company attributes these problems to growing house prices in previous years and rising costs in other areas such as food and utilities which have seen the average mortgage cost for first-time buyers grow by 12 per cent over the past year.People who want to a buy a property are now spending an average of 34.5 per cent of their salaries on mortgage repayments.Richard Donnell, director of research at Hometrack, said that while mortgage rates for first-time buyers have increased, changes to the availability of mortgages has had the greatest impact on their ability to buy.In related news, the Bank of England has revealed that mortgage approvals for April fell to a 15-year low....
Read First-time buyers ‘unable to get on the property ladder’
250,000 homeowners ‘are in negative equity’
Posted 2008-06-2
A financial expert has estimated that 250,000 homeowners are in negative equity and predicts that the figure will reach more than a million by the end of next year.Citigroup adds that this would mean one in 12 homeowners with a mortgage would be affected.The investment bank states that the problem can be attributed to declining house prices in the UK, which have fallen by seven per cent since autumn 2007, and are estimated to drop by some 15 per cent throughout this year.Michael Saunders, UK chief economist for the organisation, said: "The signs are that the economys slowing very sharply but with inflation shifting up the Bank of England cannot cut rates."He adds that the economy is currently reeling from two big shocks; the credit crunch and the housing crash. Meanwhile, according to Bank of England data, mortgage approvals have fallen to a 15-year low, with just 58,000 being granted in April. ...
Read 250,000 homeowners ‘are in negative equity’
FSA: People need to take control of their finances
Posted 2008-06-1
A watchdog has warned borrowers they must stay in control of their mortgages and loans.The Financial Services Authority (FSA) is campaigning to help people stay on top of their mortgage payments and act to stabilise their finances before it is too late.A £1.5 million press and radio advertising campaign will run for the next three weeks and urges people to think about how they could cope if their mortgage payments increased and make a detailed budget to help them see what is left when they have paid their outgoings."If people find that a change in circumstances has made it difficult for them to meet their mortgage repayments, they shouldnt panic but they should act immediately," said Chris Pond, FSA director of financial capability."Lenders will be able to offer options and there are also free debt advice agencies available."This follows news from credit card company Egg that a quarter of Brits do not have sufficient savings to cope with a financial emergency....
Read FSA: People need to take control of their finances
Homeowners urged to hunt down mortgage deals
Posted 2008-05-29
Money website Fool.co.uk has advised homeowners to make overpayments on their mortgages to avoid not having access to good mortgage deals when their current loan ends.The website stated that homeowners should take "immediate action" as lenders are continuing to restrict their best loans to borrowers who owe little in comparison to the value of their house.It added that people attempting to borrow more than 90 per cent of their propertys value increasingly have to take standard variable rate mortgages.David Kuo, head of personal finance at the website, said: "A modest fall in house prices means that small overpayments of £3 a day will be enough to reduce the loan-to value to 90 per cent. This is equivalent to giving up a store-bought cappuccino every day."He added that if prices fall by as much as 20 per cent, more extreme savings will be required.According to a British Bankers Association report, the number of mortgage approvals granted in April declined by 40 per cent compared to the same month the previous year....
Read Homeowners urged to hunt down mortgage deals
Mortgage approvals for April fall from 2007
Posted 2008-05-27
The number of mortgage approvals in the UK remains low, according to recent research.A report by the British Bankers Association (BBA) has highlighted that the uncertainty regarding property values and few available attractive loans has reduced the demand for property making April the second weakest month on record for mortgage approvals.The number of approvals rose to 38,704, a slight improvement from Marchs record low of 35,546, but 40 per cent lower than the same time last year.Howard Archer, chief UK economist at Global Insight, told the Guardian: "Despite Aprils modest rise in mortgage approvals, the BBA data is still very weak and indicates that house buying remains under severe pressure from the damaging combination of stretched affordability and tight lending conditions."However, the report showed that there is an active re-mortgage market, with some 150,000 loans approved last month.In related news, recent statistics from the Council of Mortgage Lenders show that mortgage lending in April fell by eight per cent compared with the same month last year....
Read Mortgage approvals for April fall from 2007
Mortgage products ‘not available for long’
Posted 2008-05-27
Home buyers have an average of 11 days to decide whether a mortgage is right for them before it is taken off the market, it has emerged.Research by Moneyfacts.co.uk highlights that this is a drop of 19 days from one year ago, meaning that mortgage buyers now have less time to make one of the most important decisions of their lives.In April when the Bank of England base rate was lowered by 0.25 per cent some products were only available for six days, according to the sites Mortgage Metric.The website also noted a fall in the number of products available on the mortgage market, with a drop from more than 15,000 12 months ago to 3,814 currently being recorded.Stating that this was bad news for the 1.4 million individuals expected to come off fixed-rate mortages this year, a spokesperson for the website added: "Unfortunately, until the current market readjustment is complete, the ability to time the mortgage market has become more of a lottery than an art, with the majority of todays better deals expected to have disappeared by this time next week."This follows news from Abbey that most mortgage buyers would opt for a five-year fixed-rate deal....