First Time Buyers
The Cambridge Evening News has today confirmed what we have being seeing first hand over the last 12 months, that house prices in Cambridge have jumped up well above the National trends. We believe that this increase is having an effect not only on Central Cambridge but also on all surrounding villages and Towns.
As a result of these increases in house prices, it is now more important than ever to get fully independent advice with regards to your mortgage and to get an early understanding as to your full borrowing potential. Please do not hesitate to contact us if you have any questions as to how differing lenders assess individuals and decide how much mortgage they can raise.
The full article from the Cambridge Evening News website can be found at http://www.cambridge-news.co.uk/Home/City-house-prices-soar-60000-in-just-a-year.htm
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Alliance & Leicester is lowering its Standard Variable Rate (SVR) from 4.99% to 4.24% for new customers, bringing it in line with Santander’s SVR. All new A&L mortgage products will now revert after their initial rate to a Bank of England base rate tracker at +3.74%, currently 4.24%. The move follows court approval for the legal transfer of Alliance & Leicester to Santander UK on 28 May.
A new Homeowner Variable Rate is being introduced for new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June 2010. No existing mortgages are affected by the introduction of this rate, they will remain on the existing Standard Variable Mortgage Rate which is currently 2.50% (Bank of England tracker at +2.00%). The Homeowner Variable Rate of 3.99% will apply to new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June. This is not a tracker and can be altered at anytime. This makes staying on the C&G’s base rate less attractive for clients in the longer term, so look out for remortgage opportunities.
Northern Rock will no longer accept certain repayment vehicles on its interest-only mortgages. It will not accept inheritance, bonuses, dividends, regular overpayment and an intention to convert to repayment at a future date as acceptable repayment vehicles. In March the lender reduced its maximum Loan To Value from 85% to 75% for interest-only. In addition, the acceptance of sale of property as a repayment vehicle will be limited to cases with a maximum LTV of 60% and £150,000 minimum equity. The bottom line is that Northern Rock want to do repayment mortgages!
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Cheltenham & Gloucester has launched a two-year tracker at 0.01% below the Bank of England base rate, available at 85% and 90% LTV which results in an incredible initial rate of just 0.49%. However, this rate only lasts until December 31 2010, at which point it jumps to base rate plus 5.49% until July 31 2012 (an increased rate of 5.99% currently). This kind of product may be of assistance to help First Time Buyers in getting onto the property ladder but they do need to budget for the uplift.
From tomorrow, Nationwide will reduce selected rates on its five-year fixed rate mortgages. The reductions range between 0.10% and 0.31%, with the average cut being 0.23%. For those remortgaging rates are reducing across all tiers up to 75% LTV. Five-year fixed rate are being reduced by 0.26% available from 4.88% (up to 70% LTV), new customers can borrow up to 85% LTV.
Two lenders have come to market for buy-to-let offerings, Aldermore and Precise mortgages, who are offering mortgages only via the broker market. So another good reason to talk to us if you are considering re-financing your investment portfolio.
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Mortgage brokers increased their market share by 2% in Q1 2010, advising on 62% of total mortgage lending according to figures just released by the the Financial Services Authority and the Council of Mortgage Lenders. The Intermediary Mortgage Lenders Association has taken this further by calculating that brokers accounted for 62% of total mortgage lending both by value and volume in Q1, up from a 60% market share in Q4 2009. Broker activity was particularly strong among first-time buyers with 71% of loans by volume in the first three months of the year.
The above reinforces the message we try to spread. For whole of market advice to secure the most appropriate deal, especially in these more frugal times, your best bet is to talk to an independent mortgage broker. In short, someone like me who can trawl the thousands of products available to get the right one for you.
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The Mortgage Works have launched two new Buy-to-Let products for existing investors up to 80% loan to value, this is an improvement on the deals available as recently the maximum lenders would consider was 70% of a property value. Good news for investors who are looking for a review of their existing buy-to-let deals or who wish to draw additional funds out of a property.
This deal will also assist clients looking to get expand their portfolio of properties and who do not want to put in a large deposit. Please note, however, that “First Time” landlords are limited to a maximum borrowing of 70% of the property value.
The Lloyds TSB Group have announced that they have reviewed their offering of Interest Only mortgages for deals above £500,000. They have declared that clients are no longer able to use inheritance, sale of main residence or sale of a business as sufficient to cover the debt. The lender has declared that the client needs to have a suitable repayment vehicle in place. This does make these mortgages harder to place and affordability does become a bigger factor.
Cheltenham & Gloucester has launched a two-year tracker for first-time buyers, which tracks at 0.01% below the Bank of England base rate. The Low-Start tracker, currently 0.49%, is available for loans between £25,000 and £750,000 and at between 85% and 90% LTV. But the tracking rate of 0.01% below base rate only lasts until December 31 2010, at which point the rate jumps to base rate plus 5.49% until July 31 2012. So a potential help for first time buyers getting started but they must budget for the early bump up in cost.
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