Bank signals curb on high loan-to-value borrowing

Posted on 06/09/2010 by Justin Moy

High loan-to-value (LTV) mortgages could be even scarcer in the future if the Bank of England introduces a cap on mortgage lending as part of a range of new measures to stop risky lending. Charles Bean, deputy governor of the Bank of England, said in a speech last weekend on “Monetary Policy After the Fall” that “direct constraints” on mortgage lending could be used by regulators to prevent a repeat of the credit crisis. He said this could include imposing maximum LTV ratios in the mortgage market. A similar rule has recently been imposed in Sweden. In July, Sweden’s financial regulator – the Financial Supervisory Authority – said it would limit new mortgages to a maximum of 85 per cent LTV from October 1 in an attempt to increase consumer protection.

Source – Financial Times

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Manchester BS revamps mortgage range

Posted on 06/09/2010 by Justin Moy

Manchester Building Society has announced a substantial overhaul of its product range, increasing the number of its residential purchase, residential remortgage and buy-to-let mortgages for use by mortgage intermediaries.

The all new suite of products offers attractive fixed and discounted variable rates with improved income multiples and modest arrangement fees.

For house purchase, the 2 year fixed rate starts at 3.74% and offers an income multiple of up to 4.5 x main income, with other rates and multiples applying to higher LTV options. At 80% LTV the lowest rate is now 3.99% and the remortgage option also features an incentive package.

Also included is a range of two and three year discounted variable rate products linked to its standard variable rate, with a discount of up to 2.25% available. The lowest rate of 3.24% compares favourably with base rate tracker schemes, according to the society, and upon maturity of the initial rate period, the majority of products provide an ongoing discount for the remainder of the mortgage term.

Its retail buy-to-let range has been extended and this now offers a choice of two discounted rates for a period of one year. The standard buy-to-let rate for 75% LTV is 5.74% and 5.49% for 65% LTV, each having an arrangement fee of only 0.5% (minimum £495). For 60% LTV the discount offered is 1.75% and for 70% LTV the discount is 1.50%, with arrangement fees of £1995. These products are targeted at small scale landlords.

Each mortgage application is manually assessed by a team of experienced underwriters, without the use of automated scoring systems, as the Manchester believes that a blinkered ‘one size fits all’ approach often frustrates advisers.

Please speak to us on 08456 800898 for more details of Manchester BS and their range, or go to our website at www.easyswitchmortgages.co.uk/manchesterbs for more details.

Posted in Buy to Let, First Time Buyers, Home Mover, Mortgage Lenders, New Mortgage Rates, Remortgage | Tagged , , | Leave a comment

New C&G Mortgage Products Launched

Posted on 06/09/2010 by Justin Moy

On Saturday 4 September 2010, C&G Intermediaries will be making the following changes to its Mainstream product range.

  • New 2 year fixed rate at 5.49% for home movers, first time buyers, existing customers and remortgages. 0-85% LTV. £995 fee.
  • New 2 year tracker rate at 3.19% for home movers, first time buyers, existing customers and remortgages. 0-60% LTV. No fee.

Call us on 08456 800898 for more details, or check our website at www.easyswitchmortgages.co.uk/candg

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New Abbey 2 Year Exclusive launched

Posted on 06/09/2010 by Justin Moy

Abbey (part of Santander) have just launched an exclusive 2 year fixed rate mortgage option for those looking to fix their payments for the next couple of years.

3.09% 2 Year Homebuyer Fixed

  • Homebuyer Solution Available – Free Valuation and £250 Cashback on Completion
  • Max 60% LTV
  • Fixed until 02/11/2012
  • £995 booking fee
  • ERC’s 3% until 02/11/2012

Also Abbey have the following option available for Santander Current Account Holders :

NOW 3.09% Homebuyer Fixed until 2/11/12

  • Completion deadline 28/02/11
  • Max 70% LTV
  • Available to existing Santander current account customers

Please call us on 08456 800898 or visit our website at www.easyswitchmortgages.co.uk/abbey for more details.

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‘Computer says no’ culture blights housing sales

Posted on 06/09/2010 by Justin Moy

The ‘computer says no’ mentality is blighting the mortgage market and holding back house sales.

New research has revealed the startling extent to which banks and building societies rely on computers rather than individual underwriters to assess mortgage applications.

Of the 200 mortgage brokers throughout the UK who were asked what percentage of mortgage inquiries had been declined over the past six months because their clients did not achieve a sufficiently high credit score, almost all (88%) said their clients were regularly declined by lenders’ automated credit scoring systems.

Colin Snowdon, chief executive of Aldermore’s specialist mortgage lending business, on whose behalf the research was carried out, said: “Many people will be shocked by the extent to which lenders, most of whom let skilled staff go during the recession, are now overly reliant on technology to make important lending decisions. They now have no other way of sorting the wheat from the chaff.

“Perfectly creditworthy borrowers are being told ‘no’ on a regular basis.”
 
Aldermore, which does not use credit scoring, preferring to let underwriting staff apply sensible rules and criteria, says the factors which can cause creditworthy borrowers to be rejected by credit scoring systems include:

* not being on the electoral role because of a recent house move
* a recent job change
* minor historic credit issues, even if they have been satisfactorily resolved
* being self-employed
* having income from several sources
* living in rented accommodation
* never having had a loan or credit card

Snowdon added: “Many banks and building societies have lost their appetite to lend and are using credit scoring as a blunt tool to identify only those borrowers who conform to their standardised credit profile.”

The research was conducted by an independent firm between July 14 and 18.

Source – Estate Agent Today

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Bring back the MIG

Posted on 06/09/2010 by Justin Moy

With the Bank of England considering LTV caps in mortgage lending, Genworth believes it is time to bring back the Mortgage Indemnity Guarantee premium.

Commenting, Angel Mas, president of mortgage Insurance Europe at Genworth Financial, said: “The notion of imposing loan-to-value caps on residential mortgages (Monetary Policy After the Fall – Bank Of England – 28 August 2010) assumes that high loan-to-value (LTV) lending equates to imprudent lending. But this should not be the case.

“We believe that LTV caps affect equally good and bad quality borrowers and there are better ways to address some of the concerns expressed by Bank of England.

“We believe that government and regulators in the UK have a historical opportunity to deliver strategic responses in the form of new, robust and sustainable frameworks for first time home buyers’ mortgages.

“Any proposal that requires borrowers to save larger deposits would widen the current barrier to homeownership; with other unintended consequences including, potentially, lower borrower protection in the form of unsecured top up loans.

“High LTV mortgages can be used responsibly by lenders to ensure that people with a good credit profile, but a small deposit of 5-10%, get on the property ladder.

Source – Mortgage Introducer

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House prices see second consecutive monthly fall in August

Posted on 02/09/2010 by Justin Moy
  • House prices fell by 0.9% in August
  • Three month rate of change shows price stagnation over the summer
  • Percentage of borrowers on variable rates has increased

Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:

“House prices fell by 0.9% month-on-month (m/m) in August, following a decline of 0.5% m/m in July.  This is the first time since February 2009 that house prices have fallen in two consecutive months.  The 3 month on 3 month rate of change – generally a smoother indicator of the recent price trend – fell from 1.2% in July to 0.0% in August, suggesting that house prices have essentially stagnated over the summer.  Unless house prices bounce back strongly in September, the three month rate of change will turn negative next month. The annual rate of inflation – which compares the current average price with the price level twelve months ago – remained in positive territory at 3.9%. However, it is down quite sharply from rates of 6.6% in July and 8.7% in June.

“Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of the last year.  As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices.  There is little evidence of distressed selling, however, with the Council of Mortgage Lenders’ second quarter figures showing another drop in mortgage arrears and possessions.  As such, the current period of price declines is likely to remain relatively modest.  Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development.”

Source – Nationwide

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Santander worst for banking complaints

Posted on 02/09/2010 by Justin Moy

Santander has emerged as the bank with the highest proportion of customer complaints in the UK, with gripes about its banking service flooding in at the rate of one every minute during the first half of this year. The Spanish-owned bank received 216,158 complaints in the six months, making it the institution with the highest ratio of complaints to the number of customer accounts. Barclays was next with 195,956. Lloyds Banking Group received the highest number of overall complaints but had a lower ratio because of its larger customer base. Co-operative Bank, which prides itself on offering customers an ethical banking service, had the lowest ratio of complaints with just 2.1 for every 1,000 accounts. HSBC also had a relatively low number of complaints at 65,236.

Source – Financial Times

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Rates must be kept low, says Hargreaves

Posted on 02/09/2010 by Justin Moy

A rise in interest rates could cause many UK homeowners to ‘throw away the keys’ to their houses, according to Peter Hargreaves, the co-founder of financial advisor Hargreaves Lansdown. Mr Hargreaves, who is stepping down as chief executive, warned that any attempt to increase interest rates would be disastrous for the UK economy and would lead to a wave of repossessions as many people simply gave up paying their mortgages. “There are an awful lot of people just about financing mortgages on homes in negative equity because of low interest rates,” he said.

Source – Daily Telegraph

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Skipton BS enhance Fixed Rates

Posted on 01/09/2010 by Justin Moy

Skipton BS has enhanced its fixed rate range with the launch of three new products. The lowest of the new deals is a 2 year fixed rate of 2.99% at 65% loan-to-value with a £995 fee. This is an attractive low rate with good incentives for those looking to remortgage. However, there are very similar products available in this short term market, some of which with lower rates and higher fees. Borrowers would be wise to compare these products in detail as this could make a difference to their monthly outgoings.

Call us on 08456 800898 or visit our website at www.easyswitchmortgages.co.uk for more details

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