Why Pinstriped Cockroaches Are Eating Bricks And Mortar

When the banks were on the verge failing the pinstriped cockroaches headed for the hills. Now they’re back and they’ve developed a taste for bricks and mortar.

cockroaches

"Show me the bricks and mortar!"

Logically, when interest rates drop home owners let out a huge cheer (or sigh of relief, depending on your financial situation). For the time being, the whooping and cries of jubilation have been muted. Why? The banks don’t actually want to lend you any money.

Desperate to protect their profit margins, the banks have been slowly but surely cranking up the heat. Mortgage costs are going up and lenders are desperate not to be seen as having the best offer on the market. I’d agree with you that, from out perspective, this is lunacy but the financial institutions have a reason.

By raising interest rates the banks and building societies ensure that they are no longer the competitive lender. This reason alone should prevent them from being overrun by desperate home buyers.

But this leads to a vicious circle of rate rises. Once a bank becomes the most competitive lender on the market it quickly moves to raise rates and deter buyers. This means the next bank down the ladder becomes the place to apply to for a loan. Guess what happens?

On top of these underhand tactics, the risk averse banks are demanding ever larger deposits from home owners. A 40% deposit is now the average required by many mortgage lenders. If you don’t have the cash you don’t move up the chain.

If the antics of the pinstriped cockroaches wasn’t enough, the UK housing market has been battered. The financial in Europe has, and will continue to, hurt house prices here.
On top of this, the dire situation on the continent is pushing UK house prices down and making risk-averse banks demand larger deposits from buyers.

So why, when the current Bank of England base rate is sitting at a record low of 0.5%, are the bank playing God with your mortgage? Simple: they made lots of mistakes, the tax payer bailed them out and now financial organisations want to protect their profit margins.

If you thought it was hard enough getting on to the property ladder then spare a thought of existing home owners.

Unless they’ve recently opted for a fixed-rate mortgage, many borrowers are in for a nasty shock come renewal time.

In the last week, Britain’s biggest mortgage lender, the Halifax hiked the cost interest on their fixed-rate mortgages by 0.3%. That adds and additional £54 a month to a £300,000 mortgage. At a time when most people are already struggling you can understand why home owners are getting very nervous.

But what about anyone trying to get onto the housing ladder? Sadly, they’re not fairing any better. Aside from the average 40% deposit that buyers now need, the creeping interest rates are going to hurt.

Tracker mortgages have been a popular option for many home owners over the years but the banks and building societies have raising the rates on these as well. Some lenders have clauses that ensure their rates remain as high as 3.99% above base rate. This means that even if the base interest rate remains at 0.5% for the next few years you’ll still be paying 3.49%. desperate to protect themselves.

Why The Charge To Punish Home Owners?

The tax payers money that the banks received was enough to protect them. Years of investments in weak European countries has finally come home to roost. Many of the banks are exposed to some potentially crippling debts.

So, what’s the easiest thing for them to do? That’s right, grab some more money from you and I. They’ve had your taxes now all they’re asking is that you take your mortgage and go somewhere else.

I’m off to stamp on some cockroaches before they eat my mortgage paperwork!


Rent To Buy Guide

buy to rent

There is a huge number of people in the United Kingdom wanting to get their foot on the first rung of the housing ladder. Sadly, high house prices and low wage inflation have trapped many potential buyers in a cycle of property rental.

If you’re one of the unfortunates stuck in this position then maybe it’s time for you to have a look at the Rent to buy scheme.

The rent to buy scheme was launched by the government in 2010. The aim of the scheme is to help turn rental properties into owned homes. Continue reading

Why Stealth Bombing Banks Are Targeting Your Mortgage

An Englishman’s home is his castle until it’s flattened by a 1,000lb financial cruise missile!

moving home has never been so hard

Not content with taking taxpayers money to fill in their self-made financial hole, the banks have decided they need even more money. Who’s going to pay? Anyone with a mortgage.

One example of this desperate bid to claw back money from their customers recently popped its head over the parapet. The Halifax building society raised the interest rates by 0.3%. In the grand scheme of things this figure might seem tiny but when applied to a £150,000 mortgage it adds about £27 per month to repayment costs. That’s money that could be better spent keeping your family warm, clothed and fed. Continue reading

Why Mortgage Lenders Love Leather And Pain

If your mortgage lender were a leather loving premier league football player intent on inflicting you pain which one would they be?

You may or may not know but lenders are looking for ways out of maintaining your low interest mortgage. An army of lawyers have been hired to run a fine tooth comb over the wording of your contract. Why? Because they don’t want you to have a cheap mortgage anymore. Continue reading

Mortgage Lending is making a Comeback

January has seen a rise in the number of UK mortgage lending taking place, compared to the same month a year earlier, according to figures from lenders.

However, the typical seasonal fall that is seen every year meant that the lending seen was actually down on December’s figure, say the Council of Mortgage Lenders (CML).

Gross mortgage lending stood at £10.5bn in January of this year, which is down 12% on December, but up 10% on January 2011’s figure. Continue reading

Ways to Pay Off Your Mortgage Early

Looking for Ways To Pay Off Your Mortgage Early?

Here’s the bottom line: a mortgage is debt. For a number of years we have relied on steady increases in our salaries as a way of paying off our ever increasing levels of debt. The big problem we currently face is low inflation. Basically, this means you can’t rely on large pay increases to help reduce debt…well, not in the short term. Secondly, the tax incentive that made many borrowers hold onto their mortgage was effectively abolished in 2001.

Morgage Overpayments

What is an overpayment? This type of mortgage loan lets you overpay a certain amount of cash each month which has an added adavantage of decreasing the life of your loan. Here’s an example: You have a £100,000 mortgage taken out over a 25-year period at 6%. By overpaying to the tune of £100 a month could actually save yourself around £27,000 of the repayments AND pay off your mortgage in 19 years.
Continue reading

Mortgage Life Assurance

What is mortgage life assurance?

First off, let’s define this: we’re talking about assurance (meaning you will die at some point) rather than insurance (which is works on the risk of death rather than the eventuality).
It’s a type of policy that will pay off any remaining debt on your mortgage should you die. This leaves your dependents safe in the knowledge that they won’t be left with crippling debts. If you already have an endowment mortgage there’s no need to take out mortgage life assurance as it is included in your existing policy.

Is Mortgage Life Assurance right for you?

Having some form of cover is a pretty good idea, especially if you have a family. On top of this, most lenders do recommend that you buy a policy when you get a mortgage but, in most cases, the lender will attempt to sell you one of their own insurance products. On one hand, keeping all your payments with one lender may make life easy but doesn’t necessarily mean you’ll get the best deal out of them.
Continue reading

HSBC 90% Mortgage

HSBC Offers new mortgage rate

Over the past 6 months we’ve seen a huge drop in interest rates but, unfortunately, mortgage rate haven’t seen anything near the same drop. This is compounded by the fact that the lowest rates are only being offered to buyers with a large deposit to play with.

But there’s good news from HSBC. They’ve launched a new range of mortgage deals, including products that allow for loans of up to 90% of a property’s value. Good news all round but in particular for first time buyers and current homeowners who have found it hard to move due to a lack of capital to finance their deposit.

HSBC Mortgage specifics

HSBC is offering a two-year fix at 4.99% that will be available on loans up to 90% of the property’s value. Prior to this, the best deal on the market was 5.99% (90% mortage) being offered by the Yorkshire Bank.

There are a couple of one catches though – firstly, this deal is for home purchases only and is only available to customers with either of the following HSBC products: Plus and Premier Plus current accounts. The second point that may put some potential buyers off this off is the booking fee: £1,499.

If you’re after a cheaper option, you’d do well to look at another HSBC mortgage – 5.49%, fixed for two years. Sure, the rate is hight but you’ll save a hefty fee – this one comes in at £199. which is why it works out to be better value on mortgages below £180,000.

Need mortgage help? Then try an independent advisor.

Offload the hard work to a mortgage advisor!

Some of you are lucky (or very hard working) and don’t have a mortgage but those of us that do – make sure you get the best deals possible. Mortgage interest are at an all time so, even if the lenders aren’t passing on the full interest rate cut, you’ll still be able to save money each month. There are many ways to find a new mortgage – one of the simplest is to go to Mortgages.co.uk. On their site you’ll find a mortgage calculator plus info first time buyers, mortgage brokers, equity release and more.

Another option to consider is a mortgage advisor. To be honest, for many people this route seems to conjure up an image of a shady, wheeler dealer type character who gives out duff advice, grabs your money and runs. Ok, like any industry there may be the odd rascal out there but, inevitably, as word of their rep spreads their business dies swiftly. I actually had a pretty dismal view of mortgage advisors until I received a recommendation for an indpendent – my view was to give it a shot but not part with any cash until satisfied. Here’s the shocker – this guy was good, and I mean REALLY GOOD! The company had done some work for a friend who was re-mortgaging and were so impressed that they passed on a series of referrals. Anyhow, back to the story…the advisors did the works – from calculating exactly how much we could borrow to completing all the paperwork whilst providing constant feedback and frequently nudging solicitors, banks and everyone else who was dragging their feet. The beauty of this service was that we paid absolutely nothing – the mortgage advisors took a commission from the building society that supplied our mortgage. Ok, I realise that they no doubt have deals which mean they have a preferred mortgage provider but the deal I recieved was the lowest on the market at the time. All in all, I was a very happy boy!

Admittedly, there are a huge number of services like this in the market place right now, so how do you choose? The simplest option is to find friends or family who have recently moved, re-mortgaged etc and, if they used and independent advisor, get a recommendation. Alternatively, try usint a site like UnBiased.co.uk – they hold a list of Independent Financial Advisors that can be matched to a postcode.

This approach may be something new to many of you and may well not be to your liking but if you’re about to start looking for a new mortgage it could well be worth looking for a dedicated advisor if only to reduce the amount of work you have to put in.

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