Mortgage Tips

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LATEST MORTGAGE NEWS
04/10/2008 Halifax has increased it's mortgage rate on tracker mortgages for new borrowers by 0.2%. This is the second time in a fortnight it has increased the rate. Nationwide increased it's fixed rate mortgages by 0.2%.RBS and Nat West are increasing tracker mortgages rates by 0.45%.
1/10/2008 The nationalisation of the bradford and bingley mortgage book has led to a decrease of 12.4% in the number of mortgage products available according to moneyfacts.co.uk.
29/09/2008 Net Mortgage lending in August 2008 was 143 million as against almost 3 billion in July. This is the lowest mortgage lending figure for 15 years.

MORTGAGE FACTS AND FIGURES
1/ THE AVERAGE OUTSTANDING MORTGAGE IN THE UK IS 103707
2/ IN THE SECOND QUARTER OF 2008 39,078 MORTGAGE POSSESSION CLAIMS WERE MADE.
3/ EQUIFAX  SURVEY SHOWS 20% OF HOMEOWNERS ARE WORRIED ABOUT THEIR HOME BEING REPOSSESSED
4/ THE AVERAGE MORTGAGE LOAN SIZE TAKEN OUT IN JULY 2008 WAS 138,000.
5/ 34% OF MORTGAGES TAKEN OUT IN JUNE 2008 WERE INTEREST ONLY MORTGAGES AND 24% OF THESE HAD NO PLAN ATTACHED TO PAY BACK THE CAPITAL

 TYPES OF MORTGAGES.
 
Although you will hear various words used like tracker,endownment,offset etc mortgages are generally of two main kinds. REPAYMENT MORTGAGE or INTEREST ONLY MORTGAGE.
 
With a repayment mortgage your monthly repayment pays both capital and interest. With an interest only mortgage you are only paying the interest so you will need another vehicle to create the funds to pay back the capital. This is the endownment mortgage that has taken a lot of flack as many holders of this type of mortgage are finding that the value of the investments to repay back the capital are insufficent.
 
FIXED RATE MORTGAGES.
 
As the name suggests these are mortgages where the interest rate is set so if interest rates rise you will not pay any more. These are great when interest rates are rising but not so good when rates are falling.
 
 S TANDARD VARIABLE RATE MORTGAGES (SVR)
 
With these the payments rise and fall according to the interest rate at the time. People with this type on mortgage were hit very hard when interest rates hit 15% after Black Wednesday (16/09/1992)
 
TRACKER MORTGAGES
 
This is oftern cheaper than a SVR at the start as tracks base rate at a fixed % until it reverts to a standard SVR mortgage.
 
OFFSET MORTGAGES
 
These mortgages link your savings and  mortgage so you only pay interest on the difference between the 2 figues.
 
CAPPED MORTGAGES.
 
These are similar to fixed rate mortgages as the interest rate will nor increase beyond a certain point. They often have a minimum rate they can fall to as well as a maximum rate they can rise too.

TIPS WHEN THINKING ABOUT A MORTGAGE LOAN
1/ Consider Trying to over pay the mortgage!
 
For example, if you borrow 100,000 at 6% over 25 years, you'll pay it back at 643 a month. The total charge for credit will be 93,000.

But if you can overpay by 100 a month you'll clear the loan in less than 19 years, giving you 6 years of mortgage-free living and saving a staggering 25,000 in interest and saving you thousands of pounds.

2/ Consider whether you really need such a large mortgage.

It makes me smile that people with 0-2 kids want a mansion, when two generations ago their grandparents were sleeping six to a small property, and they managed just fine.

3/Start saving asap.

Every pound saved is a pound towards your deposit. A pound towards your deposit is a pound you'll not be paying interest on. People think it is great if they get a 95-100% mortgage. But it's their lender who are laughing at the bank.

4/Shop around for mortgage quotes.

This one is very obvious but it is surprising how many people take the first mortgage offer that their bank or broker offers. You should be looking to get at least 4 quotes.

5/Check your credit report.

Because lenders place so much on this you should check it out before applying as it has been reported that as many as 50% of all credit reports contain inaccuracies. Allow time to review and correct any as this could save you 1000's of pounds.

6/Get your mortgage Pre-Approved.

This gives you additional bargaining leverage. A home seller may be more likely to accept your offer with pre-approval than another buyer without it.

7 /Read the weekend newspapers.

These normally list some of the best mortgage rates available in their weekend money columns.

 
For Mortgages it is important to speak to a qualified financial advisor for details of best mortgage rates available. Below are a selection i have pulled off the web and are for general information only as i have not read the small print but are a selection of what appears available..
 
Fixed Rate Mortgages
First Direct 4.99% 20 deposit fixed 2 years fee 1998
Yorkshire 5.49% 25% deposit  fixed 5 years fee 975
 
Offset Mortgages
Newcastle 5.60% 25% deposit fixed 2 years fee 598

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Nothing within this Website is, or shall be deemed to constitute, financial or other advice. Any and all information provided within the Website is for general information purposes only. We recommend that independent professional advice is obtained before you purchase any product and/or service.