Tag Archives: Mortgage

Mortgage

Homeowners Could Benefit From Latest Fixed-Rate Deals

Now could be a good time to find a new fixed-rate mortgage deal, according to financial solutions company Think Money.

With rates on many fixed-rate deals recently falling – and with uncertainty over when the base rate could rise – fixed-rate mortgages could become an increasingly attractive option for homeowners.

In July, Yorkshire Building Society cut the rate on its best five-year fixed-rate deal to a market-leading 3.49%, with an arrangement fee of £995. Borrowers who don’t want to pay this much up front can get a rate of 3.69% with a £95 arrangement fee.

According to Moneysupermarket, the best five-year fixed-rate deals before this offered rates of 3.79% (Chelsea Building Society) and 3.89% (Nationwide). Even those deals carried lower rates than many of the two-year deals available only a few months earlier.

The recent fall in the interest rates available may reflect intensifying competition between mortgage lenders, says an expert at Think Money.

“Many economists now believe we won’t see an increase in the base rate until late next year, which may have made some mortgage lenders more relaxed about offering lower interest rates. The fact that some of today’s five-year deals offer better rates than some of the two-year deals available a few months ago suggests that mortgage providers are serious about their lending.

“This could make five-year fixed-rate deals a very attractive option for many homeowners. Only a few months ago, such low rates over such a long period would have been unthinkable.

“However, it is worth remembering that tracker mortgage deals still tend to offer lower rates than fixed-rate deals at any given time – so some borrowers may prefer to go down that route instead.”

“Ultimately, the right mortgage deal depends on the borrower’s circumstances – and as such it’s often a good idea to seek advice before they make a decision.”

Lower rates mean lower monthly payments for homeowners. Furthermore, it could reduce costs for those considering borrowing more on their mortgage for other purposes, such as debt consolidation.

“Consolidating debts into a mortgage can greatly reduce the month-to-month cost of repaying those debts, because they are essentially spread over the entire duration of the mortgage. And when mortgage rates are low, this could prove to be a very cost-effective way of dealing with debt.

“However, we advise anyone considering doing this to think carefully, as it will increase the size of the borrower’s mortgage. Furthermore, taking longer to repay the debt may mean the total cost is higher in the long run, and if for any reason they can’t keep up with their payments, they may risk losing their home. But as long as the borrower is sure they can keep up, it could make very good financial sense.”

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Are Secured Loans Improving As A Secured Loans Lender Reenters The Market?

Champion Finance, the Glasgow based finance broker, who have been arranging homeowner loans throughout the whole of the UK for twenty six years, now feel that a new glimmer of hope is being witnessed after what has been a very bleak time for the once so buoyant secured loans industry.

During the recession secured loans fell to less than 20% of their position at the start of 2007. Household names such as First Plus ceased trading. By the beginning of 2010 there was less than a handful of secured loan lenders compared to more than twenty before the recession.

Many homeowners who could have benefitted from these products especially for such purposes as debt consolidation could not obtain the homeowner loans they wanted The self employed were especially adversely affected as self certification of income was completely abolished for those requiring a mortgage or a remortgage and two years fully audited accounts are now required by mortgage lenders.

The good news is that Champion Finance can now offer homeowner loans to self employed without accounts, provided that they have been trading for at least six months, can provide three months bank statements and have a maximum LTV of 60% in their property. This is thanks to Link Loans reentering the secured loans sector and offering these loans through respected intermediaries such as Champion Finance who in addition to being in a position to offer a mortgage and a remortgage from the whole of the market also provide debt advice. Link Loans are now strongly funded by RBS and their reappearance must surely indicate the long awaited resurrection of homeowner secured loans.

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Interest Rates Are Held, But Mortgage Lenders Hike Their SVRs

2010 has started with yet another interest rate hold by the Bank of England – the tenth consecutive hold decision since Bank Rate was cut in March to an all-time low of 0.5%.

Interest Rates Are Held, But Mortgage Lenders Hike Their SVRs

Mortgage lenders Standard Variable Rates (SVRs) have also been very low over the last year, but despite Bank Rate remaining unchanged, a number of lenders have been increasing their SVRs – pushing up mortgage costs for thousands of borrowers. As this trend continues, more and more borrowers should consider switching their mortgage to a new deal.

Although SVRs tend to follow the Bank Rate, lenders can change their own rate at their discretion. Lenders such as C&G and Nationwide have rules in place which guarantee that their SVRs can be no more than 2% above the Bank’s base rate, but other lenders have no such restriction.

While the SVRs of both C&G and Nationwide remain at 2.5%, a number of lenders have recently increased their rates and some are now charging more than twice that rate. Marsden Building Society recently announced an increase in SVR from 5.49% to 5.95% effective this month and Kent Reliance increased theirs by 0.3% to a huge 6.08% from 1st December.

Others have increased by even bigger margins. Accord (part of Yorkshire Building Society), last month raised its SVR by 0.65% and Cambridge Building Society went up by 0.59%.

Most recently, Mansfield Building Society announced that it was increasing its SVR by 0.35% to 5.59% – effective from the 11th January for existing borrowers.

David Hollingworth, Head of Communications for L&C, said, “Following these rises, the gap between the lowest and highest SVRs is now more than 3.5%, so depending on which lender you’re with, paying the Standard Variable Rate could prove costly.

“If you’ve been paying your lender’s SVR, don’t just assume that it’s the best rate for you at the moment – you could be paying more than you have to and you could see you monthly mortgage payments increase out of the blue.”

A simple way to check if you’re paying too much for your mortgage is to use L&C’s 1 Minute Mortgage Check answer 3 simple questions and they’ll tell you if you could save money on your mortgage.

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Market Conditions Spell Good News For Life Insurance Policy Holders

Homeowners often fail to review their life Insurance when searching for the cheapest mortgage deal, but with both the cost of cover and their mortgage balance having fallen, many could make substantial savings just by switching life insurance providers.

Many borrowers with repayment mortgages are unaware that to ensure there is sufficient life insurance to repay their mortgage, life insurance companies assume an average interest rate for the life of the mortgage, often around 10%.

As many borrowers have not paid anything like 10% recently, and have made overpayments, their mortgage balance may well be significantly below the amount of life insurance cover.

This gives them the opportunity to reduce the level of insurance and save money, or with the cost of life cover now cheaper and competition stiff, get the same amount or even increase their cover for the same monthly outlay.

One L&C customer recently increased their life assurance from £390,000 to £423,000 to cover their new mortgage, but managed to reduce their premium, saving themselves around £130 per month.

L&C’s Richard Morea said:
The UK population is massively underinsured as a whole, so taking advantage of smaller mortgage balances and reduced premiums provides a great opportunity to make better provision for our families, without breaking the bank.

For more information and no-fee advice, life insurance policy holders should call free on 0800 0731932.

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London & Country Mortgages Are Looking To Educate Consumers About The Importance Of Life Insurance

The protection gap in Britain is often talked about with various reasons being given for consumer s not taking this important cover. These include life insurance is too expensive, state benefits will be enough and that it is just not necessary as savings will cover any expense or loss of income. The stark reality is that people just don’t think anything will happen to them.

It appears there is poor understanding about the chance of having a serious illness, being made redundant or having an unexpected bereavement in a family. L&C, the UK’s leading fee free mortgage and protection broker are looking to educate consumers about the importance of life insurance, critical illness cover and income protection through a series of short video films. The first, Why you should protect your mortgage talks about the risks and how these may be mitigated with the right cover in place.

This free video is available at, http://www.lcplc.co.uk/videos/protecting_your_mortgage. For a FREE no obligation protection review call L&C on 0800 0731932.

London & Country (L&C) is the UK’s leading no-fee mortgage broker. Based in Bath, it provides whole of market advice via telephone and post to clients nationwide. As well as residential mortgages, it also specialises in the Buy-to-Let and adverse-credit sectors.

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Don’t Forget to Protect Your Mortgage – and Your Family

The different types of life insurance cover available can sound confusing, but the choice is more straightforward than people think. If you have a family with children, as a bare minimum you should consider life assurance that would pay off your mortgage upon death. There is then the option of cover that would pay out in the event of you contracting a serious illness. Both types of cover can be

provided either as a lump sum or as a regular income. For new parents, life insurance company AVIVA is currently offering £10,000 FREE life cover until their child’s first birthday – £20,000 if both parents apply. In their recent Parents Study, Aviva found that almost 40% of parents polled have not bought life insurance cover and a further 17% only have enough to cover their mortgage.

Richard Morea, Technical Manager at L&C said, “When taking out a mortgage or starting a family, it is essential that borrowers and parents look at their life insurance needs and make sure that their family is properly protected if the worst were to happen. It’s important to shop around and get advice too, because banks and building societies that offer good mortgage rates will not always offer good rates on life insurance.“

For a free life insurance review, speak to one of L&C’s expert advisers on 0800 073 1932. New parents can click here to apply for £10,000 FREE life cover through L&C.

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Tracker Rate Mortgages Gain In Popularity

So far this year, fixed rate mortgages have been by far the most popular choice of deal as borrowers have sought the security of a fixed rate during the recession.

Gain

However, August has seen an increase in interest for tracker rates which are linked directly to the Bank of England Rate. Earlier this month, the Bank of England announced it was keeping rates on hold at an all-time low of 0.5%. It then published its Quarterly Inflation Report and predicted that rates would remain at their record low for some time to come.

Richard Morea, Technical Manager at L&C said, “With signs that interest rates could remain at 0.5% into 2010, many borrowers are deciding that they are willing to take the risk of having a variable mortgage rate, in order to benefit from low interest rates. Tracker mortgages are not for everyone though – if you’re on a tight budget and are worried about being able to afford a rise in mortgage payments, then a fixed rate mortgage is still a good bet.”

London & Country (L&C) is the UK’s leading no-fee mortgage broker. Based in Bath, it provides whole of market advice via telephone and post to clients nationwide. As well as residential mortgages, it also specialises in the Buy-to-Let and adverse-credit sectors.

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With The Bank Of England Rate Remaining At An All-Time Low Of 0.5% In August, Now Could Be A Good Time For Many Borrowers To Consider An Offset Mortgage

An offset mortgage works by using savings you have to reduce the amount you owe on your mortgage and therefore the amount of mortgage interest you pay. For example, if you have an outstanding mortgage of £120,000 and savings of £20,000, you would only pay interest on a mortgage of £100,000. You don’t receive interest on your savings, but that also means that you don’t pay tax on that interest.

This tax benefit, added to the fact that mortgage rates are typically higher than savings rates, means that you could save thousands of pounds in interest with an offset mortgage. Taking a mortgage rate of 3.99%, a basic rate taxpayer would need to earn at least 4.99% from a savings account to get the equivalent benefit. A higher rate taxpayer would need to earn 6.65%.

You could also cut years off your mortgage term by using the saving to make regular overpayments.

Richard Morea, Technical Manager at L&C said, “If you are frustrated with the low interest rates you are earning on your savings in the current market, then an offset mortgage is worth considering. They are not suitable for everyone, but if you have a decent amount of savings, offsetting them against your mortgage could save you thousands of pounds in interest.”

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Auto Insurance Quotes Impacted by US Point System for Driving

While many drivers have had their licenses suspended thanks to their state’s driving point system, they might be unfamiliar with how it works and how it impacts car insurance.

Auto Insurance Quotes

Established to hinder the amount of dangerous drivers on the road and to enforce traffic laws, the point system provides DMV’s with an extra set of eyes on the road. Depending on the way the state implements the system, points are added or taken away from your driving record. Although the accumulation of points can either be positive or negative, depending on the state, the goal is the same: decrease the number of dangerous drivers on the road.

Having your license suspended, however, isn’t the only negative outcome of possessing multiple infractions on your driving record.

According to the InsuranceAgent.com article, ‘ The U.S. Point System: How it Affects Your Driving Record and Car Insurance,’ “The more infractions (and therefore, the more points) you have on your driving record, the more risky you are to insure. As such, insurers will offer you higher car insurance quotes and rates.”

If you are worried about your car insurance increasing, but aren’t familiar with your driving record, InsuranceAgents.com says there are steps you can take to ensure you avoid any future infractions. To learn about your state’s point system’s rules and regulations, contact your local DMV and your local police department. They can provide you with the most up-to-date information about the state’s point system.

“They can give you more specifics on the point system that affects you,” according to the article. “You can use that information to know where you stand as a driver in your state and whether or not you need to get proactive and work toward a better driving record.”

Once a driver understands their state’s point system, it makes it easier for them to follow traffic laws. If your driving record is clean, it will be much easier for you to find affordable auto insurance. If you’re currently in need of affordable auto insurance, compare quotes online. With a little patience, you’ll be able to find the most convenient coverage for you.

For more information, visit InsuranceAgents.com.

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CML Reported An Increase In Mortgages For Home Purchase In May, Up 4% From The Previous Month

Fixed rate mortgages accounted for 74% of all loans in the month, the highest share since August 2007.

Fixed rate mortgages

Encouragingly the CML predicted that lenders might become slightly more relaxed in the coming months following the introduction of some higher loan–to–value mortgages recently. This is backed up by the Bank of England’s recent Credit Conditions survey where lenders reported that they intend to increase lending at higher loan-to value ratios. This bodes well for first time buyers looking to get on the housing ladder.

This will be welcome news for parents who are still acting as an important source of help for young first time buyers. 80% of first time buyers under 30 are still getting help with a deposit from parents to enable them to get a mortgage.

Potential borrowers looking to get onto the housing ladder can see the range of leading deals at London & Country best buys and use a range of calculators to see how much they can borrow and what stamp duty will cost on potential properties at L&C Mortgage Calculators For more information and no-fee advice, borrowers can call free on 0800 373300 or request a call back.

London and Country Mortgages Ltd is the country’s leading whole of market no-fee mortgage broker and submitted over £4bn of mortgages to over 70 lenders in 2008. For more information visit our website London & Country Mortgages.

L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers.

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Nationwide Has Hit The Headlines With News That It Can Offer Homebuyers A Mortgage Of As High As 125% Of The Property Value

This initially sounds like a return to the lending practices of the “pre-crunch years” and the now infamous Northern Rock Together mortgage. Whilst the Together 125% deal actually served some borrowers pretty well it has become synonymous with the carefree credit conditions of 2007.

lcplc

However when you look closely at the Nationwide proposition it is a world away from replicating the Northern Rock product. It is designed to help existing borrowers that need to move home but now find themselves in negative equity, as their property value has fallen to the extent that it is less than the outstanding mortgage.

Nationwide allows all existing customers moving home to borrow as much as 95% of the property value albeit at higher interest rates. In this scenario the borrower still needs to put in at least a 5% deposit but they can also borrow an amount to cover the negative equity, although this is charged at an even higher rate.

The reality is that this initiative will only have any relevance to a small niche of borrowers that really need to move, perhaps to relocate for a new job or to accommodate an expanding family. However it will at least provide an option to those that have a genuine need to move.

Borrowers looking to find out how much their current property is worth can use London & Country Mortgages house price calculator. They can then calculate their loan to value ratio (LTV) by dividing the current balance of their mortgage by the current value of their home. If this is over 100% they will have negative equity.

London and Country Mortgages Ltd is the country’s leading whole of market no-fee mortgage broker and submitted over £4bn of mortgages to over 70 lenders in 2008. For more information visit our website London & Country Mortgages

L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers.

L&C has won numerous awards including:

Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and 2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007
Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
Business of the Year – The Bath Business Awards 2005
Growth Strategy of the Year – National Business Awards (Wales and West) 2008
Business Leader (Broker) – British Mortgage Awards – 2008
Online Mortgage IFA of the Year – Financial Adviser – 2008

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Mortgage Protection Insurance Helps Prevent Foreclosure

The loss of one’s primary source of income almost always creates a domino effect that results in difficulty paying even your most menial of bills, let alone your most important bill: the mortgage.

However, losing your job isn’t the end of the world. There are always ways to make ends meet and mortgage protection insurance is available to prevent your home from being foreclosed on. According to an article recently published on InsuranceAgents.com you should speak to your homeowners insurance agent today about job loss protection.

“With an added job-loss rider, mortgage protection will help pay your mortgage payments in the event that you lose your job and can also cover your mortgage if you are otherwise unable to continue the payments on your own,” according to the InsuranceAgents.com article.

It is important for those interested in purchasing mortgage protection insurance to understand what factors go into the amount they are being charged for coverage. Those deciding factors include your employability, the cost of your mortgage payments, and the current state of the economy. The job market has a significant deciding factor on your mortgage protection premium. The higher the risk that you may lose your job, the more your mortgage protection insurance may cost.

With the economy in shambles and job security a term of the past, mortgage protection insurance is now more important than ever. Most policies come with job-loss coverage included but others require you add a job-loss rider. Visit InsuranceAgents.com to get set up with a home insurance agent in your area and ask them if mortgage protection insurance is right for you.

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Best Buy Mortgages Are Available Under 3% Fixed For 2 Years And Under 5% Fixed For 5 Years

A number of factors have contributed to this. Firstly, it’s widely recognised that we are at or near the bottom of the interest rate cycle. Base rate could only fall by another 0.5% at most and in the May meeting of the Bank of England, base rate was held for the second month in a row. Consumers are looking to secure a fixed rate deal whilst rates are at their lowest. Best Buy Mortgages are available under 3% fixed for 2 years and under 5% fixed for 5 years. These fixed rate mortgage deals compare favourably with historical rates linked to lenders’ standard variable rates (SVR).

Best Buy Mortgages

Secondly there is widespread concern that when rates start to rise, they will rise sharply and so monthly repayments on mortgages linked to Bank of England Base Rate or a lender’s SVR will increase significantly over a short period of time. Securing a good fixed rate deal now will mitigate that risk.

Thirdly there is limited availability of mortgages for those with relatively small deposits (15% of house value or less) and so consumers in this situation are grabbing fixed rate mortgages whilst they still can.

Finally, as house prices have fallen, consumers have found that the value of their mortgage relative to the value of their home has increased. As the best fixed rate mortgage deals are available below 75% loan to value (ltv) it is sensible for consumers to fix their mortgage rate in case their property value falls further and the best mortgage deals are no longer available to them.

Potential borrowers wanting to secure a fixed rate mortgage deal can see the range of leading deals currently available at www.lcplc.co.uk/bestbuys. For more information and no-fee advice, borrowers can call free on 0800 373300 or request a call back.

London and Country Mortgages Ltd is the country’s leading whole of market no-fee mortgage broker and submitted over £4bn of mortgages to over 70 lenders in 2008. For more information visit our website London & Country Mortgages. L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers.

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Divorce Survival Kit Released as Ultimate Divorce Resource

The Divorce Survival Kit has just been released as the ultimate comprehensive resource for people experiencing divorce. The Divorce Survival Kit was developed by Carol Ann Wilson, one of the nation’s foremost experts on divorce and finances. The Divorce Survival Kit consists of a four (4) CD audio set and complete workbook filled with examples, forms and checklists. The product took over a year to complete, and it represents a great wealth of Carol Ann’s vast knowledge and experience. The Kit contains everything you need to know if you are going through a divorce and are concerned with how to survive financially.

The topics covered in the Divorce Survival Kit include:

  • Marital vs. Separate Property: Learn the truth about marital and separate property and how to keep what is yours. Don’t surrender it if you don’t have to!
  • Alimony/Maintenance: Find out if you are likely to receive alimony and how much. If you have to pay alimony, understand how to best protect yourself and minimize your losses.
  • Health Insurance: Did you know you could become uninsurable after your divorce? Protect yourself and your children.
  • Child Support: Learn what you need to know about the Child Contingency Rule that could save you from owing the IRS thousands of dollars.
  • Asset Division: Don’t ruin your financial future by failing to consider hidden assets and tax consequences. Discover the best ways to divide all your assets.
  • Dividing Retirement Accounts: This is often the biggest asset in the marriage. Avoid some common mistakes and make the most of this valuable asset.
  • Settlement Alternatives: Courtroom battles can be costly and expensive, but there are alternatives. Mediation, arbitration and collaborative divorce are explained.

Carol Ann Wilson, a Certified Financial Divorce Practitioner, is the founder of the profession of divorce financial planning. She has been working with divorcing clients and their attorneys for over 20 years.

Carol Ann’s dedication to helping couples financially survive their divorce has driven her to continuously develop more ways to help them. In addition to the Divorce Survival Kit, Wilson has authored many books and articles on divorce, has served as an expert witness in court for over 120 divorce cases, has developed software for professionals used in determining financial results in divorce settlements, and has trained thousands of divorce financial planners around the country how to work with divorcing clients to achieve fair and equitable divorce settlements.

Currently, Wilson is the president of the Financial Divorce Association, located in Longmont, Colorado, and an owner of the Academy of Financial Divorce Practitioners in Chicago. Her expertise, as the founder of the profession, is highly sought-after, and Wilson continues to consult with divorcing clients today.

“The Divorce Survival Kit is going to help a lot of people,” Carol Ann says. “I am excited to be able to offer all of my knowledge and experience in one complete package, that is affordable to anyone. I like to say that you get my 24 years of experience for less than the cost of 30 minutes with an attorney.”

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£611 Billion Equity In Homes Owned By Over 65s

Prudential has revealed findings from its latest Equity Release Index* which show that despite falling house prices and the current economic climate, homeowners aged 65 and over have £611.5 of equity in their property.

These significant amounts of property equity contrast with the current squeeze on retirement income being seen in today’s volatile market and economic conditions where rates on annuity and income drawdown products are falling.

Individuals buying guaranteed annuities, for example, have seen rates fall by up to 10 per cent since the middle of last year and Prudential believes this fall emphasises the need for pensioners to look at all potential sources of investments and retirement income.

Property equity can deliver a valuable income, especially against the current backdrop of low interest rates and equity price falls of around 30 per cent over the past two years which have hit many pensioners’ non-pension savings.

Prudential’s Index, which tracks the amount of home equity owned by people aged 65 and over in England and Wales, found that 42.5 per cent of this equity belongs to those living in London and the South East.

The Index also reveals that the value of property equity belonging to homeowners aged 65 and over fell by £80.6 billion between October 2008 and January 2009, with the average homeowner over 65 seeing the value of equity they have in their home fall by £21,377.

London homeowners aged 65 and over saw the highest decline for any region in England and Wales with equity in their homes falling by £38,057 while those in Yorkshire and Humberside experienced a decrease in value of £13,028.

Keith Haggart, Director of Lifetime Mortgages at Prudential, said: “Every homeowner is being affected by falling property prices, but it’s important to remember that many people, especially retired homeowners, bought their homes years ago and have benefited from past growth in the housing market. Even in this depressed market, the vast majority of retired homeowners still have considerable wealth tied up in their properties.”

He continued, “Equity release has an important role to play in providing retirement income particularly when other sources are under pressure.

“Annual figures from SHIP (Safe Home Income Plans) show that equity release sales in 2008 were almost £1.1 billion and were just nine per cent lower than 2007, despite the collapse in the wider mortgage market.”

Equity release schemes can be an excellent way to help retirees to secure an income, and any provider who is SHIP registered provides a no-negative equity guarantee as well as guaranteeing that the mortgage interest rate is fixed for the term of the loan.

 

* Prudential’s Equity Release index tracks the amount of equity held in property by people over 65 years old in England and Wales. Figures are based on Prudential’s analysis of data from the ONS Family Spending Report (2006), the Land Registry House Price Index (August 2008) and GfK NOP (2007). Specifically, weighted number of households data is taken from the ONS Family Spending Report 2006. Home ownership data is taken from the NOP data. Average house price per region is taken from the Land Registry Index.

About Prudential:
“Prudential” is a trading name of The Prudential Assurance Company Limited, registered in England and Wales. This name is also used by other companies within the Prudential Group. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

Find out more on Prudential’s product range including endowments and equity release schemes, including equity release mortgages on the Prudential website, www.pru.co.uk.

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It May Still Be Some Time Before The Bank Of England See The Need To Raise Interest Rates, But With The Cost Of Funding Fixed Rates Pre-Empting Any Change In Bank Rate, There Are Already Signs That Fixed Rates Could Cost More

The cost to lenders to fund some fixed rates isnow higher than earlier this month despite the introduction of quantitative easing measures, which it was hoped would help reduce borrowing costs, and this has already had some knock on effects. Less than two weeks ago, the cheapest 5 year fixed rate was a fantastic 3.95%, one of the lowest 5 year fixed rate mortgages seen in the UK. However, today, the best you can achieve is 4.24%, still attractive but an increase that will cost a borrower with a £200,000 interest only mortgage an extra £2,900 over 5 yrs.

These headline grabbing rates are also usually reserved for borrowers who have at least 25%, and often 40% equity in their homes, and as house prices continue to fall, fewer homeowners will qualify.

Those borrowers that don’t qualify for the lowest rates face a very difficult decision. Do they take what is historically still a competitive fixed rate, or do they save money now and stay on their lenders standard variable rate (svr). If they opt for the svr they are likely to see their equity eroded further, and run the risk that fixed rates in the future could be considerably higher.

Many lenders will not lend to borrowers with less than a 15% stake in their home, so fixed rates are harder to find. Richard Morea from London & country Mortgages advises, ‘Whilst it’s unlikely that rates will climb steeply in the near future, a combination of any rise, and the continued erosion of equity mean that whichever rate you qualify for, now is the time to consider a fixed deal, and take action to secure it!’

For more information and no-fee advice, borrowers should call free on 0800 373300.

London & Country (L&C) is the UK’s leading no-fee mortgage broker. Based in Bath, it provides whole of market advice via telephone and post to clients nationwide. As well as residential mortgages, it also specialises in the Buy-to-Let and adverse-credit sectors.

L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers. For more information, go to www.lcplc.co.uk/green

L&C has won numerous awards including:

Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and 2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007
Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
Business of the Year – The Bath Business Awards 2005
Growth Strategy of the Year – National Business Awards (Wales and West) 2008
Business Leader (Broker) – British Mortgage Awards – 2008
Online Mortgage IFA of the Year – Financial Adviser – 2008

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Stop Foreclosure On Your Home, Work With A Loan Modification Specialist

The HRP Office, www.hrpoffice.com, is open in Surfside Beach, South Carolina and ready to assist clients with their mortgage needs. The owner, Dr. Michael W. Cantrell, Sr. and his staff are experienced loan modification specialists. Their long time strong relationship with most major banking institutions enable them to work faster, smarter and less expensively than other loan modification companies. Clients of HRP, LLC quickly come to recognize them as the experts in helping them get their loans successfully modified.

What kinds of situations can the HRP Office, www.hrpoffice.com, help their clients with?

Homeowners who are behind on their mortgage payments
Homes currently in foreclosure 
Homeowners have an ARM that has adjusted higher or will adjust higher in another month or two
Homeowners who have a legitimate hardship
Reduced income, reduced hours, pay cut, loss of job, relocation, demotion
Homeowners who went on Disability or Workers Compensation
Divorce/Separation
Excessive medical bills
Back taxes that are currently being paid back 
Death of household provider
Failed business

The staff at HRP, www.hrpoffice.com, guarantees their services 100%; they are an industry leader in loan modifications. With a staff of licensed attorneys as well as experienced processors and negotiators, they work together to handle each and every case with the utmost care and concern. Lenders have very specific guidelines that must be met before they will agree to modify a loan. HRP knows what those guidelines are and how to get their clients the very best possible option available. They work for the homeowner, not the lender, so your best interests are their main concern.

What can the HRP Office, www.hrpoffice.com, do for their clients?

Pre Qualify a case at no cost to the homeowner
Provide the homeowner with access to their account online 24/7
Prepare a comprehensive modification package to best position each case for success
Engage in hard line negotiations with lenders to ensure the best possible outcome for their clients
Stop collection calls on overdue mortgage payments
Postpone imminent sale dates so the homeowner can breathe easier

Custom Analysis for Each Client
The staff of the HRP Office, www.hrpoffice.com, understands that everyone’s financial situation is unique, which is why they offer comprehensive, personalized, and proven modification programs that get results. The legal experts at HRP understand the importance of providing individual services that are tailor made to effectively meet the personal financial needs of their clients.

100% Guarantee
Dr. Michael Cantrell and his staff take pride in their level of service and client support and are committed to providing the most rewarding experience possible. HRP’s, www.hrpoffice.com, web-based software allows their clients to have access to their account 24 hours a day 7 days a week. People can check the status of their loan modification case at any time. Clients can also contact their HRP team members via email, fax or phone at any time. Dr. Cantrell had this to say about HRP “Our specialized attorneys, paralegals, negotiators, processors and customer service professionals are unmatched. We provide customized, personal attention to your individual situation and we emphasize customer support and long term solutions for you. Simply put, we strive to provide the best customer service in the industry, and our results-oriented negotiators take pride in consistently meeting and exceeding our client’s expectations. Ultimately, we provide clients with renewed financial optimism and a valuable savings of time and money. In addition, our company has the resources, banking relationships, ethical standards and legal expertise that other companies cannot offer which can translate into significant benefits for our clients.”

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The Importance of Keeping on Top of Mortgage Payments

Responding to the news that the number of homeowners falling behind on their mortgage payments has risen by almost a third (31%) in the past year, debt consolidation company DebtAdvisersDirect.co.uk has emphasised the importance of keeping on top of mortgage payments, adding that a mortgage should be the top priority for any homeowner.

The company added that borrowers who are having difficulty with their mortgage payments should seek expert debt help as soon as the problem emerges.

The latest figures from the FSA (Financial Services Authority) showed that there were 377,000 borrowers in arrears on their mortgages at the end of 2008 – up 10% in the final quarter alone, and 31% higher than the same period in 2007.

The figures refer to mortgage accounts in arrears by 1.5% or more of the borrowed balance, roughly equivalent to arrears of at least three months.

The figures mean that 3.4% of all mortgages were in arrears at the end of 2008, compared with 2.3% at the end of 2007. Meanwhile, new repossessions increased by 60% compared with the same time period in 2007.

A spokesperson for Debt Advisers Direct said: “We would expect an increase in the number of homeowners falling behind on their mortgage debt in recent months, but these statistics show just how quickly it is occurring.

“Considering the economy is potentially about to enter a more severe stage of the recession, it’s very important that homeowners are careful with their finances and avoid falling behind on their debt repayments.

“In particular, a mortgage should be the number one priority for any homeowner. It is important that all debts are repaid on time, but a mortgage pays for the borrower’s home – and as such, failing to keep up on payments could eventually result in the home being repossessed.”

The spokesperson also said that if other debts are making it difficult to pay the mortgage, a professional debt adviser may be able to recommend a suitable debt solution that could make the borrower’s unsecured debts more manageable.

“There are few debt solutions that deal directly with mortgage repayments, although in some cases a debt adviser may be able to negotiate with mortgage lenders for a reduction in payments. However, a debt solution that deals with the borrower’s unsecured debts could reduce the homeowners monthly outgoings, and therefore make it easier for them to meet their mortgage payments.”

The Debt Advisers Direct spokesperson added that if the situation becomes more serious and the homeowner cannot see a way of repaying their debts in full, an IVA (Individual Voluntary Arrangement) could help them avoid bankruptcy by paying off an agreed percentage of their debts, and therefore help them avoid losing their home.

“If the homeowner can agree a repayment plan for their mortgage arrears, then an IVA can be arranged around that, meaning both the homeowner’s mortgage and their unsecured debts are taken care of.”

However, the spokesperson was keen to emphasise the importance of speaking to a professional debt adviser before deciding on any debt solution.

“Different debt solutions are more appropriate for people in different situations, and equally they all have their drawbacks. An expert debt adviser can help to explain the pros and cons of each debt solution, to help the borrower in establishing which debt solution is best suited to their individual needs.”

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Mortgage Debt: Comment On Housing Equity Injection

Responding to news that homeowners had injected a record £8 billion into housing equity in the final quarter of 2008, debt management company Gregory Pennington stressed that this reversal of a long-term trend was due to a combination of factors, rather than any single event.

“Prior to Q2 2008,” said Melanie Taylor, Head of Corporate Relations for Gregory Pennington, “the last time we saw homeowners injecting money into housing equity was in Q2 1998, when they injected £279 million – a mere 3.5% of the amount injected in the final quarter of 2008.”

In the decade following 1998, of course, the average house price virtually tripled, which obviously enabled millions of homeowners to turn many billions of housing equity into cash. The highpoint of this occurred in Q4 of 2003, when £17 billion of equity was withdrawn – a full 8.5% of post-tax income.

A full decade of rapid price rises meant that homeowners were both willing and able to keep on withdrawing equity for some time after the house price boom came to an end in 2007: it wasn’t until the second quarter of 2008 that equity injections began to outweigh withdrawals.

“Standing at £1.8 billion in Q2, quarterly equity injection rapidly soared to the record level of £8 billion by Q4 – thanks to a falling base rate and a faltering housing market, as well as worries about the recession in general.

“Plummeting from 5% to 2% in Q4 alone, the falling base rate had two crucial effects on the way homeowners treated their mortgage debt. First of all, it helped people find new deals with lower monthly payments, and enabled people with existing tracker and SVR mortgages to overpay their mortgages without spending more than they were used to. Second, it led the banks and building societies to drop the rates they were paying on savers’ accounts. Many people looking for the best return on their ‘spare’ money realised that overpaying their mortgage would be much more valuable in the long run than putting their money in a savings account.

“Looking beyond interest rates and house prices, the recession itself has prompted a more conservative attitude, particularly among people who’ve experienced recessions in the past. The news has been full of repossessions, redundancies, ‘awful’ economic conditions – and a succession of dire predictions from a wide range of respected bodies, making it clear that things were expected to get a lot worse before they got better.”

Whatever the reasons, overpaying the mortgage can deliver various benefits: “Aside from reducing the amount of interest they’ll pay over the lifetime of the mortgage, overpayments can also shorten the actual term of the mortgage, meaning the homeowner will own the property outright sooner than initially expected. There’s also the question of reducing their mortgage debt and increasing the equity in the home, which can give homeowners access to mortgage deals with much lower interest rates – something which many will be keen to do as soon as possible, before the base rate has a chance to start rising again.”

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Fixed rate mortgages are low, particularly for those with at least 25% equity, but will they/can they get any cheaper?

Tracker mortgage rates mirror any change in bank rate, but with mortgage lenders increasing tracking margins, and with bank rate at 0.5%, have you missed the boat?

Unusually, standard variable rates may also look attractive, but are lenders passing on any change in interest rates, as they struggle to retain savers?

If you are unsure what to choose, here are some L&C tips on how you could hedge your bets.

A mix and match mortgage is where you take part on a variable rate and part on a fixed rate. This gives you some security but will also mean you don’t completely miss out if rates fall again. The downside is that you’re likely to pay an arrangement fee for both schemes.

Drop lock mortgages, offered by lenders such as Halifax, Nationwide and C&G, allow you to take a tracker deal, but switch to a fixed rate in the future without penalty.

This might seem the perfect solution but timing your switch will be tricky, and is likely to involve your home being revalued. With house prices continuing to fall, a revaluation could see you move into a higher loan to value band with higher rates, so even if fixed rates generally fall, you could end up paying more. Any switch is also likely to mean a new arrangement fee.

You could also consider a capped tracker mortgage. The tracker means you don’t miss out on interest rate cuts, and adding a cap means there is a maximum rate you can pay, so if rates rise above the cap, you don’t need to worry.

The Coventry and Yorkshire Building Societies and Woolwich have all recently launched capped trackers.

To find out more visit the best buy mortgages section of the L&C website.

Whatever you do, L&C’s advice is don’t delay. With lenders reserving their best deals for those with up to 40% equity, and falling house prices eroding your equity, any delay could cost you dear.

For more information and no-fee advice, borrowers should call free on 0800 373300.

 

London & Country (L&C) is the UK’s leading no-fee mortgage broker. Based in Bath, it provides whole of market advice via telephone and post to clients nationwide. As well as residential mortgages, it also specialises in the Buy-to-Let and adverse-credit sectors.

L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers. For more information, go to www.lcplc.co.uk/green

L&C has won numerous awards including:

Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and 2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007
Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
Business of the Year – The Bath Business Awards 2005
Growth Strategy of the Year – National Business Awards (Wales and West) 2008
Business Leader (Broker) – British Mortgage Awards – 2008
Online Mortgage IFA of the Year – Financial Adviser – 2008

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