Two years ago the margin on a two-year fixed deal stood at 1.28%.  The margin leaps even higher to 3.35% on an average five-year fixed rate product and 3.57% on a three-year fix.  Michelle Slade, spokesperson for Moneyfacts.co.uk, said: “Mortgage rates are falling, but only a fraction of the reduced funding cost is being passed on as lenders continue to repair their balance sheets.  Borrowers will be angered that they continue to pay the price for mistakes made by lenders, particularly those who have accepted government funding.”

Moneyfacts calculates that, going forward, were Bank Base Rate to rise as quickly as it has fallen, and were lenders to maintain their current margins, the average rates charged to borrowers on mortgages could reach around 8%.  Slade said in the current market mortgage availability and the maximum loan sizes continue to improve, but there is still a long way to go before any reasonable normality is returned.  “Swap rates are the traditional barometer of fixed rate mortgages, but with lenders still nervous of entering the money markets, many are opting for on balance sheet funding through their savings book.”

1. How much cover do you want?
2. How long you want it for?

Then you age, sex, occupation, health & smoking habits are taken into consideration.  The other issue affecting premiums is your medical history & current state of health.

 Mortgages

 How much mortgage cover do I need & for how long?

 You need to cover the amount of the outstanding debt, up until the debt is paid off.

 What type of cover do I need?

 Is your mortgage a repayment one? If so, you need a Decreasing Term Assurance policy.

Or is it an interest-Only mortgage, in this case you need a Level Term Assurance policy.

The reality is that these clients are few and far between, the key is therefore keeping up to date with what lenders will and will not consider and keeping a constant dialog with lenders to understand fully what they are looking for.  I recently help an American couple who have just over 2 years remaining on working visa in UK and who have only been in the UK for 9 months.  They had initially been turned down by one lender who unknown to the clients had altered their requirements for non-UK nationals. 

Mortgage Broking is complicated, lenders move the goal posts on a regular basis, it is important for clients to confident that their Mortgage Broker is working for them and concentrates on mortgages solely.  Be aware of the IFA who tries to do it all, i.e. Pensions, Investments, Insurances, Mortgage Broking, you would have to ask yourself how are they able to keep up to date with all of these complex areas of financial advice with only 24 hours in a day?

Who should consider remortgaging, well currently anyone who is on a Standard Variable rate of 3.50% or higher, anyone with 15% or more equity in their property, someone with no adverse credit and anyone who has the ability to evidence their income.  However, if you are with the Halifax you are also able to consider a product transfer this all depends on product wants and loan to value.  If you would like to discuss the options open to you for a remortgage please do not hesitate to contact us.

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

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!

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.

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.

HIPs were introduced to speed up the sales process and ironically the exact same reason is being given for their demise.  Shame more consultation was not made by the former government as over a billions pounds and innumerable trees have been sacrificed to this bureaucratic pipedream.

Energy Performance Certificates (EPCs) will still be required as these are part of an EU directive, however, early signs are that the EPC will not now be required prior to first day marketing.