Wednesday, February 10th, 2010 at
2:21 am
Mortgage lender First Direct has temporarily stopped offering mortgages to non-customers in order to process the unprecedented number of applications it has had in recent weeks.
The lender will still allow existing customers to apply for Mortgagesand will resume offering mortgages to non-customers as soon as the backlog of applications has been dealt with. In the interim, HSBC – the bank’s parent lender – will offer new customers a two-year fixed-rate mortgage on similar terms to First Direct’s best-buy mortgage.
Chris Pilling, chief executive of First Direct, said: “We’ve seen unprecedented demand for our mortgages since January thanks to our highly competitive pricing and the decision of other lenders to raise rates. As a result, we’re currently seeing applications running at five times our normal volumes.
“The flood of interest in our mortgages has meant we’re taking longer than we’d like to handle applications, especially from non-customers. Rather than increase interest rates dramatically to discourage new applications, we’ve decided to withdraw temporarily from offering mortgages to non customers until we’ve cleared the backlog.
Some mortgage lenders may have failed to comply with the Financial Services Authority’s (FSA) conduct of business rules surrounding mortgage arrears, according to the FSA.
The FSA’s mortgage conduct of business rules are designed to encourage mortgage lenders and brokers to set business standards for various aspects of their relationships with customers. The second part of the FSA’s Effectiveness Review investigated the effectiveness of the rules in the sub-prime and lifetime mortgage markets.
The FSA’s research into how mortgage arrears were handled, indicated that not all lenders and/or brokers, were in compliance with the conduct of business rules that apply to mortgage arrears.
Richard Farr, director of the Association of Mortgage Intermediaries, said he was disappointed that the FSA has found areas of non-compliance by firms with the arrears rules.
He said: “We are calling for all lenders to invest in their arrears management process, and consider involving the original intermediary. In times of financial crisis, we believe it is important for lenders and intermediaries to work together to help borrowers.””
By: Markie Shephard
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Thursday, February 4th, 2010 at
2:50 am
Contrary to popular belief, bad credit mortgage loans still exist. However, they can be more difficult to obtain. Mortgages for those without good credit scores can be more expensive and entail varied terms. If you have bad credit, then it becomes even more important to shop effectively for your mortgage. Mortgages all have stated periods of repayment. Throughout time they usually were 30 years. More recently this repayment time frame began to be drawn out. Some extended to 40, even 50, years. Others had shorter periods allowing for quicker pay back. Most experts suggest a 30 year term. This often translates to a reasonable payment while allowing for appreciable principal reduction. Interest rates can vary. They are mostly all tied to main market interest rates. How much above this benchmark rate you pay depends on several factors. Your credit score is one of them. This is unfortunately one of the costs of having less than great credit. The good news is that refinancing is always possible in the future erasing the initial higher interest rate. Not only can they vary, but interest rates can also change. Some mortgages have what are called “fixed rates”. This means that the interest rate will remain the same during the life of the loan. Fixed rate mortgage loans allow for effective planning and budgeting. There are no surprises when the rate changes and your mortgage payment all of a sudden shoots up. Other mortgages have what are called “adjustable rates”. These loans have an interest rate which changes along with the market rate interest rate. With an adjustable rate one really never knows what the payment will be into the future. The advantage of an adjustable rate is the sometimes the initial payment is lower. However, this can quickly change resulting in a very high rate. This is especially so for mortgages with initial very low “teaser rates”. This loans can be especially dangerous and are heavily marketed to those with bad credit. Therefore, you need to be very wary of these mortgages. A very low initial payment is great. However, in a year, if it greatly increases you could be in a position that you can no longer afford your mortgage. This can obviously lead to a horrible result. Be wary of claims that you will be able to refinance at any point that the initial teaser rate shoots upward. Many borrowers were told this before and believed it. However, now they find they are unable to refinance because of declining property values. The result can be foreclosure. Obviously, you want to avoid this at all costs. Staying away from initial low teaser rate loans is a good step towards that end. There are bad credit mortgage loans available today. However, many can have nasty pitfalls. Make sure you are an educated consumer. Each bit of information available online can prove valuable and end up saving you money and heartache. Do your research, read the fine print, and avoid fancy or tricky mortgages and you’ll be a happy homeowner.
By: Adam Hefner
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Friday, December 25th, 2009 at
2:05 am
Many best fixed rate mortgages are only available for a short amount of time so checking the best buy tables regularly will ensure you don’t miss out on those deals. With interest rates now down to half a per cent this is the lowest they are going to go too. There wouldn’t be any real benefit to drop them any further. Whether it is a good time to look for a fixed rate mortgage or not is a good question. The low interest rates do mean lenders can offer lower rates however the rate at which they lend and borrow money to each other, the London Inter Bank Offered Rate (LIBOR) is currently much higher than the base rate. Until lenders are comfortable lending to one another and return to lending at the same levels they did before the credit crunch good rates may be hard to come by or unattainable by many.
If you do decide to go for a fixed rate mortgage, the internet has a wealth of information to help you. Once you have a good idea of what you want and a better understanding of mortgages, getting professional advice would be my advice.
Mortgage brokers are professionals who can answer all your questions with confidence; they have expert knowledge and experience of the market. They are in the best place to help you first of all find the best fixed rate mortgage to suit your circumstances.
A whole of the market mortgage broker will, as the name suggests, search every lender, every deal. They offer additional benefits from giving advice and help with the mortgage application process. Whatever you do don’t go to your bank they will simply offer you a mortgage from their limited range, you could end up paying thousands more in repayments over the course of the mortgage.
By: Direct Traffic
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