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Endowment Policy – Careful Cancellation Essential Back in the 1980s word went around that there was a wonderful new way to pay your mortgage. In those days the process of getting and running a mortgage was almost sacrosanct, and little variation was available. A fairly common route to take was to open an account at the Building Society of your choice, and to put in as much money as you could, the intention being to prove to said Building Society that you were prudent and could be trusted with their money. When the time fo... Mortgages - Ad Infinitum There are some exiting developments in the mortgage market with the birth of a new mortgage designed in order to allow home owners to pass on their mortgage debt in the event of their death. Whilst some people might think this is a rather odd thing to do, read on for the full story:- The new inter-generational mortgage – surely to be known by something less tongue-twisting – is a product which has the promise of parents being able to pass on the mortgage debt on their home... Mortgages. Pay Back Over 40 Years. Mortgages are traditionally taken out over 25 years, 30 years at a push – but house prices have got so high that many would be homeowners have found themselves completely unable to get on the property ladder. Mortgage lenders have found a solution – offer a mortgage over a longer term so borrowers can afford the repayments. The catch is – the borrower pays a lot more in the long run, and the lender’s profits increase exponentially! However, for many, it is the only way ... First Mortgage – Steps To Saving The property market is in good shape. Prices continue to rise and sold signs are popping up like mushrooms. This is all wonderful news and we’re all going to be property-rich. Spare a thought for the first time buyer! Gaining that elusive first step on the ladder must seem in insurmountable task. Would-be homeowners have to save for a considerable length of time, as the average deposit is now around £12,000, having risen from around £4,000 ten years ago. Small wonder the ... Mortgage Outfits Challenged On Exit Fees You might have heard of an exit fee. It is the charge that the mortgage lender makes a person pay if they want to get out of a money borrowing agreement before the end of the term. Another name for it is a redemption penalty. Well mortgage lenders are making large amounts of money on these exit fees at the borrower’s expense. In fact, as more and more people have tried to ditch their mortgage when a better deal comes along in the last five years, the money lenders have bee... Buy To Let Mortgages. Landlords Face New Rules. As landlords know, there’s a huge demand for small self-contain units, especially in University towns. But as from the start of this tax year, landlords are faced with the necessity to have a building licensed for occupation if the property is on at least 3 floors and several unrelated tenants occupy it. Whilst this represents a problem for those less scrupulous landlords, it will serve to help those landlords wanting to enter that market. That’s because the tighter regula... Headline Rates Are Not Everything There are various ways of working out the interest rate on your mortgage and an unbelievably wide choice of mortgages out there. All may not be what it seems, however. Don’t make the mistake of thinking interest rates are the “be all and end all” of the mortgage search. If you’re paying interest only on your loan, with no capital repayment, the date that interest is calculated makes no difference, but otherwise it’s not quite so simple. Some building societies offer loa... Watch That Mortgage Bank of England interest rates have been steady since August 2005 and even that move was southwards. Why then are thousands of mortgage customers up in arms about an unexpected and unwelcome increase in the cost of their mortgages? Customers of the Nottingham Building Society have been staggered to receive letters from the Nottingham advising them of an interest rate rise, via an increase in its SVR (standard variable rate). Mortgages linked to the SVR have had the interes... Mortgages – Buy To Let A Wise Bet Buy-to-let is often seen by private investors as an interesting alternative way to make their money grow. Certainly it offers the chance of double benefits for the owner. There is the income from letting the property and the hopeful increase in the value of the property. Unlike the mortgage which you raise when you buy your home, which is based upon your earnings, a buy-to-let mortgage is normally based on the income which can be generated from the letting of the property.... Foreign Mortgages. New Horizons? There has been a tremendous boom in overseas property ownership. Whether for personal use as a family, holiday or retirement property or as an investment property, the market shows no sign of slowing down. In the excitement of making the decision to go ahead, it’s easy to overlook the importance of taking professional advice with regards to the legal situation. The law in respect of property and mortgages abroad is very different from that in the UK. Local practices, cu... Your Mortgage – Time To Switch? Would you like to save money on your mortgage? Over 50% of homebuyers are wasting money by paying over the odds for their mortgage every month. This is normally due to the fact that they’re paying their lender’s standard variable mortgage rate. These standard variable rates are frequently 2 percentage points higher than lots of the best market deals, so the simplest way of saving money is to switch deals. If someone has a £100,000 loan and switches from a standard variable... Mortgages - Short Term Memory Do you, in common with millions of other home owners, have a short-term mortgage? If so, it’s very easy to set up the monthly repayment and then get involved with so many other aspects of your life that time slips away and before you know it, the two or three year period of your loan is coming to an end. Whilst many lenders write to their customers towards the end of the loan period, it isn’t compulsory. When you sign on the dotted line for your mortgage deal, you are issu... Mortgages - An Important Date A helpful reminder from your mortgage broker may be just what you need to save yourself a whole lot of trouble. The FSA (Financial Services Authority) is very happy with the way rules for renewing two or three year home loans are working out, but mortgage brokers tell a different tale and are less impressed, saying that borrowers are confused and could be out of pocket over the system. When your short-term mortgage is coming to an end it would be helpful if you could re... Everlasting Mortgages What does the term “inter-generational mortgage” mean to you? If you’re not up to date, then read on for more information on this revolutionary move. It seems that there is a distinct possibility that lifetime interest only mortgages, which we could pass on down the family, may be the answer to a lot of home buying problems and worries. The way the scheme works is the borrower takes out an interest only mortgage. This means that your monthly repayments are for interest ... Sub-Prime Mortgages – Think Twice The fastest growing sector of home loans market is what we class as specialist mortgages. Specialist mortgages have developed to serve the mortgage needs of people who don’t fit into the more conventional model buyer. In the case of self-employed buyers, the introduction of self-certification mortgages has made things much simpler. A statement of earnings is normally all that is needed, provided the business has been up and running for couple of years. Normally, a 25% depo... Mortgages - Fair Shares There’s a lot of interest being shown in a totally new shared-equity mortgage, which will hopefully help a wide range of first time buyers to get into the property market. Shared equity is not new and schemes have been around for some years which mainly involve housing associations but these were designed for the needs of low income tenants and council tenants. A new government scheme called Homebuy which will allow property buyers to raise a mortgage of 75% and the bal... Mortgages. House Prices – Bricks And Mortar Or Millstone? House prices have been rising steadily for some time, and this situation has been fuelled by low interest rates. Danger signals should be seen by those buyers who have invested too heavily and who could face problems (and even repossession) if there is a rates ‘correction’. Sales and prices do not, on the surface, show any signs of falling back, but rising unemployment and the resulting fall in demand could be a marker to future trends. If interest rates increase, anyone w... Buy To Let – Dream Or Nightmare? Are you thinking of investing in a buy-to-let property? A great number of people have done so already and according to the Council of Mortgage Lenders, individuals taking out buy to let mortgages rose by 483 per cent in the five years to 2005. The vast majority of these landlords probably have no trouble at all with their tenants, either by luck or careful vetting, but you may need strong nerves to watch a new television series entitled “Tenants From Hell”, featuring real-... Mortgages. The Costs Of Moving House Based on an average priced property, it now costs an incredible £5,551 to move house in the UK and with mortgage lending hitting record highs it is now more important than ever that anyone moving or buying their first home is aware of any hidden costs. Buyers tend to get caught up in the excitement of choosing a new home and run the risk of paying the price financially by not ensuring they get the best value from their mortgage. If you’re willing to bargain over fixture... Mortgage Debt Warning As House Prices Boom Many surveys have identified the lack of first-time buyers as the reason for the slowdown in prices as house prices have reached such a level that it is becoming increasingly difficult to get onto the property ladder. Mortgage lenders are also becoming more careful about lending levels and the size of mortgages they will grant which limits the price potential house-buyers can pay. The number of new loans approved for house purchases in March 2006 was 27 per cent higher ... Mortgages: The Age Problem. Pensioners should be sitting pretty regarding mortgages shouldn’t they? After all, they should by now have completed their payments and be the sole owners of their homes. Sadly, for some 600,000 pensioners this is not true – they are still paying off their mortgages, and not just for a couple of years after retirement. For example, over 20,000 who still have to reach the final payment are in their 80’s. Couple this with the research from the Prudential which reveals that a... Mortgage – Changes Ahead? Borrowers should be aware of some of the changes taking place in the mortgage industry after two building societies recently implemented rises in their SVR (standard variable rate). As the last Bank of England interest rate has remained steady for over 11 months, and especially as the last move was downwards, this has angered and surprised their customers. The two societies are N&P (Norwich and Peterborough) and the Nottingham. Borrowers with either of these societies whos... Some Information On Buy To Let Mortgages; Are They Right For You? The government predicts an increase of more than 2 million UK households over the next 10 years, due mainly to an increase in EU immigrants and a trend of smaller households. This obviously leaves a good opportunity for would be buy to let landlords, especially with the better buy to let rates we are currently experiencing and the extra tenants wanting accommodation. So, what are the requirements of buying to let? Well, the main requirement of a buy to let mortgage is that... City Watchdog Probes Money Lenders Over High Risk Mortgages. A ‘subprime borrower’ is a person with a bad credit rating. This can range from someone who has missed a few credit card payments to someone who has been declared bankrupt. For banks and mortgage brokers, these types of customers are lucrative because the risk attached to them is justification for charging sky high interest rates. These customers are so lucrative that the market for them is worth £30 bn a year and many new companies are getting into the market. Figures show t... Mortgages. Turn Your Pennies Into Pounds “House prices continue to rise. “First time buyers continue to struggle to get a hold on the property market.” The headlines in the newspapers must make depressing reading for would-be first time house purchasers. Ten years ago around £4,000 would have been considered a reasonable deposit on a house. This figure has reportedly risen to around £12,000. No wonder the average age for a first time buyer has gone from 30 to 34 years old. There is nothing for it but to get do... Mortgages. An Interest Only Mortgage: It Could Cost You More Over 200,000 homebuyers in London during 2005 took out an interest-only loan according to the Council of Mortgage Lenders (CML). None of whom had a repayment vehicle in place and of these, 60,900 were first-time buyers. There are no figures available for the total number of homebuyers with interest-only loans. However, figures for new interest-only house purchase loans have been running at between 10 and 20 per cent for all new first-time buyers over the past 10 years, and... Mortgaging For Funds Almost one pensioner in four does not have enough money to fund their retirement, research from Prudential reveals, and one property-owning pensioner in five thinks they will have to downsize to make up the difference. Along with those forced to sell their homes, one pensioner in six would consider taking in a lodger. But now, pensioners can obtain cash advances secured against the value of their houses through equity release or home reversion plans. Under home rever... House Price Rises – A Cautionary Tale In general, property prices appear to be rising. Between January and May 2006, the uplift in house prices across the United Kingdom averaged 4.4%. In the event that this trend continues, then the yearly rise will be 13%. This will put the average house price at almost £195,000. The Council of Mortgage Lenders confidently expects 1.2m property sales to be completed this year. This is a rise in the 970,000 previously predicted. They also expect mortgage loans to be £10billio... Mortgages. Why Interest Only Can Be A Risky Option The Council of Mortgage Lenders’ figures are showing a growing trend in interest only mortgages. From January to March 2002, 9% of new mortgages were interest only. Now take the period from October to December 2005, and the amount of new interest only mortgages has risen to 23%. In the same timeframe, the number of first time buyers choosing interest only mortgages has increased from 6% to 15%. There’s a good reason for this upturn, and that’s because the monthly payments ... Mortgages. Short Term Advice There are some new types of home loans coming onto the market which are being advertised at present. Several of the mortgage companies are offering variation of them and they are being marketed as “lifetime” loans. So might this be the end of the short-term mortgage? Not necessarily so, it appears that there are still bargains out there for those prepared to shop around. Mortgage brokers usually advise discounted short term mortgages and advise clients to regularly shop ar... Mortgages. The Return Of The Mega-Mortgage. With the housing market is now showing marked signs of recovery, especially in the South and London, the number of homeowners mortgaging for more than £500,00 is increasing. (Also see Latest Market Facts at the end of this article.) Previously, prospective borrowers for these mega mortgages have experienced a mixed reception from the lenders – sometimes the lenders would provide the facility but viewed them as higher risk. For that reason lenders typically charged a premiu... Mortgages. Big Changes In The Buying And Selling Of Houses. On June 1 st 2007, the law concerning the buying and selling of houses changes. From that date onwards everyone who wants to sell a house has firstly to prepare a Home Information Pack (HIP). And if you don't? You're in the frame for a £200 fine! It's also probable that estate agents will also insist on you having the Pack ready by the time they put your home on the market. Certainly, buyers' solicitors won't do a thing until you provide the Pack. All in all, you don't hav... Mortgages And Loans. Islamic Finance Avoids Interest. Two million Muslims in the UK face an ethical dilemma if they want a mortgage or a loan. Conventional mortgages and loans all require the payment of interest and “riba” as interest is called under Islamic law, is forbidden by the Koran. British financial institutions are increasingly catering for Muslims' specialist needs through a number of alternative arrangements that respects the teachings of the Koran. Here are just two of them: Ijara with diminishing Musharaka – t... Mortgages. Exit Fees To Be Capped. In the last 3 to 5 years we have seen rises of up to 450% in the exit fees charged by lenders when borrowers redeem their mortgage. But at last the Financial Services Authority (FSA) ha seen the light and is going to crackdown on these increases. Lenders have been telling new borrowers about the exit fees currently charged, but the lender has retained the right to increase those charges at any time and without advising borrowers. This amounts to a free hand to increase the...

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