Making it easier to get finance

One of the most important factors for lenders who are considering extending any form of finance to you is your credit file and rating, which will often determine whether or not lenders will be prepared to extend finance to you or not. Whether you are applying for a loan, credit card, store card, catalogue, or mortgage you will find that your credit file and rating can have a huge impact on your level of success.

For anyone that needs to take out finance and is relying on being able to get that finance it is important to do everything possible to boost your chances of success. Of course, no matter what measures you take there is still no guarantee that you will be able to get the finance that you need. However, you can increase your chances of getting it through measures such as keeping your credit file and score in check.

Maintaining responsible and timely payments on bills and debts will help to ensure that your credit file and score is not damaged. Also, showing that you can manage money responsibly will help, which means not having a range of credit cards that are maxed to the hilt or applying for finance on a regular basis – all of this will show up on your credit report.

You will be able to check your credit report on a regular basis either by ordering copies or even by checking them online, which is the easiest and most convenient way. Checking your credit file on a regular basis will ensure that you are not penalized for incorrect, inaccurate or out of date information, as you can look out for any information that is not correct and get it sorted out right away.

Tags: store card, timely payments, Credit rating agency, convenient way, hilt

Competition pushes loan rates down further

A number of lenders across the UK have reduced their personal loan interest rates over the past few months, which has increased affordability when it comes to borrowing in the UK. Most lenders have applied their best rate reductions to loans in the mid-range section, which are generally unsecured loans of between £7500 and £15000.

It has been reported recently that competition in the personal loan sector is resulting in increasingly affordable deals coming onto the market for potential borrowers. The base interest rate in the UK has been standing at just 0.5 percent for twenty two months now, which is the lowest level it has ever been in the history of the Bank of England, which spans well over three centuries.

The increasing competition means that lenders are continually trying to get one over on one another by reducing personal loan rates to make themselves more popular amongst consumers. This is helping to further drive down the interest rates charged on loans, as when one lender reduces the rates the others tend to follow. One lender, M&S, has now reduced the interest rate on its mid-range personal loan to just 6.9 percent, and this is the first time in around two and a half years that it has dropped below the 7 percent barrier.

According to one industry official restrictions are being eased up to some degree, giving consumers access the more affordable deals on the market. He said: ‘At long last, after a period of inactivity, we are starting to see the whole personal loan market starting to open up. Many lenders are beginning to open their books to more consumers and we are seeing more competitive deals, even for loans below £7,500.’

Tags: lenders, Affordability, drive, section, rate, rate reductions, best rate reductions, competition

Another drop in house prices for October

October has seen another fall in house prices in the UK according to recently released figures. The figures have been released by Nationwide, and the High Street lender has said that the dearth of buyers in the UK has resulted in continued falls with house prices.

The average property price in the UK is said to have fallen by £2400 in October, with the Nationwide’s house price index falling by 0.7 percent over the course of the month due to buyers steering clear of the market. Over the course of the month the average property price has now fallen to £164,381.

Over recent months the pressure on house prices in the UK has been mounting, as buyers have shied away from the market for a variety of reasons. There are many would be buyers that simply cannot get a mortgage due to current restrictions in the market, and many others that could get a mortgage but cannot afford the high deposit levels that lenders are asking for.

Another factor that is likely to have a serious impact on buyer interest and property prices is the spending Review recently outlined by the coalition government. The sweeping spending cuts that have been proposed will have raised concerns amongst households and individuals who are now in fear of losing their jobs due to the cuts in the public sector, which could also have a knock on effect on the private sector.

An economist from Nationwide said: ‘If the recent trend in house prices were to continue through November and December, the annual rate of house price inflation would drop to between 0% and minus 1% by the end of 2010. This would compare to a rate of 5.9% at the end of 2009.’

Tags: Nationwide Building Society, economist, finance, buyer, Business Finance

Increase seen in debt consolidation loan enquiries

According to a recent report the number of enquiries relating to debt consolidation in the UK has been rising, as consumers struggle to cope with their debt and look for solutions to try and ease the financial strain. Over the last couple of years debt problems have become a major issue for many people, with the global financial crisis and the recession taking their toll.

There are a number of options that are available to those that have unmanageable levels of debt these days, and one of these is to consolidate their debts. A debt consolidation loan is designed to allow borrowers to wrap all of their different unsecured loans, credit cards, store cards, etc into one more convenient, lower interest loan.

By consolidating their debts borrowers can enjoy reducing the overall amount of interest that they pay, will only have to deal with one creditor and one repayment each month, and can greatly reduce the amount that they are paying out each month by taking out the consolidation loan over a longer period so that repayments are smaller.

The report claims that over the past couple of years many people have accrued high levels of debt through having to borrow money to manage their day to day costs and even through having to use their credit cards for essentials, bill payments, and in some cases mortgage repayments.

Many of the enquiries that are being received by lenders who offer consolidation loans are from homeowners who want to use some of the equity in their homes to borrow money and repay their smaller debts. Consumers that are looking to consolidate their debts are being advised to compare a range of loans from different lenders to boost their chances of getting the best deal.

Tags: crisis, loan, debt consolidation, finance, debt, longer period, store cards, lenders

Rules tightened on renting homes by banking industry

According to recent reports the banking industry has decided to clamp down and tighten the rules when it comes to renting out homes. Read more

Tags: financial crisis, last ten years, short term basis, industry, lenders

Increase in mortgage availability could spell good news for consumers

A recent report has indicated that the number of mortgages on offer to consumers could be on the increase, and access to these mortgage deals may be getting easier, even for first time buyers in some cases. Read more

Tags: Mortgage loan, Mortgage broker, lenders, uk lenders, deal, access, Subprime lending, mortgage

Sort your budget out for 2010

Like many other people you may have experienced a great many difficulties in terms of your finances this year, and this is partly because many of us were not prepared for the onslaught of financial problems that were set to hit us, ranging from the recession and job losses through to increasingly difficult credit conditions. However, the last year should have taught most of us some valuable lessons in terms of finances, and one thing that many people will be planning to do for 2010 is try and sort out their finances. Read more

Tags: operation, store, magazines, consolidation, time, difference unsecured debts, package, lenders

Quarter 2 sees repossession levels fall

The second quarter of this year has seen repossession levels fall in the UK according to a recent report. Repossessions have been rocketing in the UK as a result of the global credit crunch and high interest rates. Read more

Tags: repossession levels, repossession, high interest rates, Mortgages, repossessions, lenders, industry, mortgage defaults

Economic recovery depends partly on continued lending

The deputy governor of the Bank of England, Paul Tucker, has recently spoken out about the future of the UK’s economy, and has stated that in his opinion the future of the economy partly depends on continued credit being extended by lenders. Read more

Tags: News, personal finance, course, credit, economic recovery, availability

Savers disappointed by low returns

Since October of last year the base interest rate in the UK has plunged from 5 percent to just 1 percent, which has come as a blessing for many borrowers who were struggling to keep up with rising borrowing costs, such as mortgage repayments. Read more

Tags: bonds, savings returns, instant access, base interest rate, interest rates, level, lenders

Progress with PPI not fast enough

Senior officials from the UK’s financial regulator, the Financial Services Authority, have said that progress is not being made quickly enough in the crackdown on the mis-selling of PPI. Payment Protection Insurance has been at the centre of investigations and controversy for some time after investigations revealed that it was commonly mis-sold by lenders and providers. Read more

Tags: relation, mystery, Insurance, lenders, fsa

Consumers still having to pay high deposits for affordable mortgages

Over recent months getting a mortgage has become increasingly difficult and expensive, with many lenders reserving their best deals and lowest interest rates for those that are able to put down a sizeable deposit as opposed to the traditional 5% deposit. The changes in mortgage lending and costs have come about as a result of the global credit crunch, which swept across the nation last summer. Read more

Tags: Mortgages, Mortgage loan, arrangement fees, equity, lending, interest rates, lenders, england and wales

First-time buyers “struggling” to get mortgages

People looking to secure funding to get onto the property ladder are more likely to have difficulties than those in more established jobs and who have bigger deposits to put down, according to Cobalt Capital partner Andrew Montlake. Read more

Tags: working lunch, Association of Mortgage Intermediaries, first time buyer, credit problems, Mortgages, first time buyers, lenders, property ladder

Lenders to start withdrawing 100% mortgage deals

Following the withdrawal of 125 per cent mortgage deals, many lenders are beginning to remove 100 per cent deals too, one finance expert has claimed.

Moneyfacts.co.uk has said that 100 per cent mortgage deals are becoming expensive and harder to find, and this is a market trend which will affect first-time buyers the most.

Since November almost one third of lenders offering the rate have withdrawn their products from the market, leaving only 28 providers.

Julia Harris analyst at moneyfacts.co.uk, said: “This is yet another example of lenders continuing to tighten their belts even further in what has become a vastly different mortgage market from this time last year.”

Those who are looking to get on the first rung of the property ladder will find there are fewer options without a deposit.

First-time buyers could have to pay a larger premium for the added risk that the lender is taking on, he added.

Meanwhile, the Council of Mortgage Lenders has reported that while gross lending held up well in January, there is still “considerable uncertainty in the housing market” at present.

Tags: different mortgage market, moneyfacts, larger premium, lenders, market trend, first time buyer, rate, example

First-timer buyers ’should listen to Bank’s warning’

First-time buyers who have taken out interest-only mortgages should reduce their loans following the Bank of England’s (BoE’s) prediction of economic depression, one financial expert has claimed.

According to Fool.co.uk, those who have taken out interest-free mortgages to get a first foot on the property ladder could face bleak financial times ahead, as lenders tighten their financial belts.

David Kuo, head of personal finance with Fool.co.uk, said that the BoE’s Inflation report should set “alarms ringing” in the ears of first-time buyers.

“In future, lenders may tighten the credit-scoring criteria and choose to reduce the maximum loan to value (LTV),” he warned

Mr Kuo added that: “This will put borrowers who have taken out 90 per cent mortgages at risk, especially if the value of their homes decline sharply when they remortgage.”

Fool recommended that making overpayments as, according to its calculations, every £1,000 of those will reduce the loan by the same amount and reduced the interest bill by £1,500 over 25 years.

Meanwhile, according to the Royal Institute of Chartered Surveyors, house prices have reached their lowest point since the crash during the 1990s.

Tags: inflation, Chartered, financial belts, Business Finance, GBP, lenders, foot

House prices tumble at fastest pace since 1995

According to recent figures released by the Nationwide Building Society house prices across the UK took the biggest tumble since June 1995 in November.

The figures from the mortgage lender showed that house prices had fallen by 0.8%, which was the first fall since February last year and the biggest fall in twelve years. The annual rate of inflation on homes has also tumbled, falling from 9.7% in October to 6.9%.

The fall of 0.8% equates to an average £1500 drop in house prices, and this means that the average house price now stands at £184,099. However, this still means that the average house price is around £12000 more than just one year ago. In addition to the house price fall, the Bank of England has confirmed that mortgage approval levels have also slumped, with 88,000 new mortgage approvals in October, which was 12% lower than the previous month and 31% lower than October last year.

Nationwide officials confirmed that the housing market was facing a cooling off period, stating: “Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market.”

The Council of Mortgage Lenders added that the effects of the credit crunch and turmoil in the financial markets were affecting the housing market, and that the government needed to invest more money in the financial markets.

Michael Coogan from the Council of Mortgage Lenders stated: “We would like the government and the Bank of England to consider how best to unblock the funding log-jam that some UK lenders are experiencing, so that they can continue to fully meet consumer demand.”

Tom Smith
5th December 2007

Tags: fall, prices, government, approvals, Mortgages, lenders

Rate falls ‘will not affect mortgage market’

Any drops in the interest rate over the coming year will have little affect on the mortgage market, an industry expert has said.

According to Firstrung, following the credit squeeze this year the market is “completely detached” from the Bank of England base rate, with the average rate at two per cent higher than that of the base rate.

Paul Holmes, chief executive of the mortgage brokers, commented: “We always used to look at Bank of England decisions to see what our mortgage rate was going to do.

“But all of a sudden the dislocation, the gap, is huge between what the lenders do and what the Bank of England does.”

He added that in excess of 40 per cent of mortgage products have been “stripped” from the market, although there is no shortage of products.

Furthermore, he said, there is a need for a “contraction and consolidation” of the market, rather than increased product innovation.

Tags: base rate.paul holmes, lenders, average rate, base, mortgage, England base rate, bank of england

Younger couples could be better off renting than buying property

Industry experts have stated that younger couples on average incomes could be far better off financially renting a property in England and Wales rather than purchasing.

Although there is no investment element in renting a property it is estimated that the cost of renting an average two or three bed house in England and Wales is around two thirds the cost of a 100% mortgage, making it the more affordable option for those on average incomes.

In the past the cost of renting a home was more or less the same as taking out a mortgage to buy one, and therefore purchasing was the more sensible option. However, due to the rising value of property in England and Wales, which has rocketed over recent years, coupled with rising interest rates, which have been hiked up five times since August 2006, mortgage costs are sky high at present, and many couples and families are now turning to rental properties.

One industry professional involved in the research stated: “Not too long ago, there was little difference between the costs of buying and renting. But while house prices tripled in the years since 1994, private sector rents only increased in line with earnings, and the costs of renting have as a result fallen relative to the costs of buying.”

Research shows that the amount of money that first time buyers now need o be earning in order to get a mortgage is higher than ever, making it increasingly difficult for younger couples and families to get onto the property ladder even with the availability of increased income multiples now offered by many mortgage lenders.

Tom Smith
5th November 2007

Tags: market, lenders, home, rent, buy, own, mortgage, cost

100 per cent-plus mortgages safe

A predicted slow down in house prices should not dampen the optimism for 100 per cent plus mortgages, experts have claimed.

Bestinvest, a financial advice firm, claim that even if house prices stabilise, 100 per cent borrowers will not be at risk of negative equity.

However, the company maintains that this type of borrowing is not for everyone and advice should be sought before taking up such a loan.

Peter O’Donovan of Bestinvest said: “Eventually house prices will continue to increase. And hopefully as they pay off their mortgage, of course, they reduce that burden on the loan-to-value.”

He added: “It’s down to affordability – speaking to a client, getting to know them properly and being able to recommend these sorts of products knowing that you aren’t putting them in any sort of danger.

“Lenders themselves do say ‘no’ if they don’t think its right. They don’t want to have to repossess in a year’s time, it’s not good business.”

However, the Royal Institution of Chartered Surveyors warned that there may be a one in ten chance of a housing market crash in the UK.

Tags: Mortgages, lenders, danger, donovan, housing market crash, percentage, equity, risk

Risk of default increased by lack of checks

According to a recent report released by the UK’s financial regulatory body the risk of homeowners defaulting on their mortgage repayments has been increased as a result of various lenders allowing them to borrow money to purchase a home without carrying out adequate checks into their income.

The Financial Services Authority claims that some lenders have been allowing consumers to borrow money to buy property but have failed to determine whether they can actually afford the repayments based on their income.

With a series of five interest rate rises already having taken place in the past year, along with the threat of further rises, many homeowners with variable rate mortgages are struggling to keep up with repayments, even though they may have been able to comfortably afford the repayments when they took out the loan. However, for those that were struggling initially, as a result of being able to borrow more money than they could actually afford, the interest rate rises could tip them over the edge.

The FSA has been investigating the sub-prime market, where brokers and lenders seem to be unable to show whether the borrower can actually afford to make repayments on the amount that they borrow. According to reports around one third of brokers have been unable to confirm whether a borrower could actually afford the mortgage, and over half of them allowed borrowers to self certify their income.

One MP stated: “Talking about a few rogue brokers is just skimming the surface of the problem. While rogue brokers are a problem, the more pressing issue is high street lenders aggressively trying to build market share. Lending income multiples for mortgages are now at an all-time high and, with interest rates set to rise further, the outlook for many homeowners looks grim.

Tom Smith
13th September 2007

Tags: payments, home, default, lenders, Mortgages

Anti loan shark scheme welcomed

A new scheme to tackle loans sharks has been welcomed by the National Consumer Council (NCC).

The organisation is hopeful that by introducing the project, around 200,000 of the UK’s poorest people will receive help.

Hopes have been raised that some of the most vulnerable people will now be able to escape the vice-like grip of illegal lenders.

“Removing illegal lenders from these communities not only frees their victims from threats and intimidation, but can help people find ways to borrow more cheaply,” said Claire Whyley, deputy director of policy at NCC.

“It’s vital, though, that these new projects are supported by efforts to make more affordable credit widely accessible in poor communities.”

Large numbers of people turn to loan sharks because they have such a bad credit rating that they feel they will not be given a loan by a reputable lender.

However, loan sharks are not restricted by regulation and often charge extortionately high interest rates.

As a result, many borrowers find themselves in an even worse financial situation than before they borrowed the money.

Tags: regulation, finance, rating, vice-like grip, lenders, scheme, loan, director

December saw loans increase

December saw a “substantial increase” in the number of people applying for a loan.

That is according to Elephant Loans & Mortgages, which says one major factor is the increased indebtedness of consumers, reports AFX News.

The Christmas and New Year period is traditionally a busy time for borrowing, as many people seek to cover the increased costs associated with the holiday season.

January and February are two months which usually see increased lending and the sales distribution channel for lenders is anticipating “significantly more enquiries” over that period.

“December’s level of activity reflects the growing debt problems in the UK,” said chief executive Gary Miller-Cheevers.

“Following the busy Christmas period, we expect to see significantly increased enquiries in 2007, as consumers seek to manage their debt more effectively.”

Consumers in the UK have recently been warned that they should borrow sensibly in the aftermath of the festive period.

Debt advice firm Thomas Charles called for people to ensure that they only borrow as much as they can reasonably afford to pay back.

Tags: debt problems, period."December's level, New Year's Day, Christmas period, increased lending, Gary Miller-Cheevers, distribution channel

Credit card charges likely to rise

Credit card customers are likely to feel the squeeze as companies try to recover the £1 billion per year which will be lost as a result of a cap being introduced for penalty charges.

The Office of Fair Trading introduced the £12 cap, leaving a £1 billion shortfall for card companies which PricewaterhouseCoopers (PWC) says will be made up through increased charges and fewer zero per cent deals.

A report, released by PWC, says card companies are likely to make up the shortfall in this way, although there is disagreement over what effect an annual charge will have on consumers.

Some firms are not concerned that they may lose the custom of non-profitable card holders, while others do not want to anger these customers as they see an opportunity to sell other financial products to them.

Richard Thompson, one of the report’s authors, said he finds it difficult to see how the firms will be able to recoup the lost revenue.

“We are likely to see a waterbed effect, whereby charges pushed down in one area pop up somewhere else,” he said.

“Card issuers would have to levy annual fees costing the average credit card user £35 a year to recoup the potential £1bn loss.

“If lenders tried to recoup this through interest rates alone, we would see APRs increase by two percentage points on average,” added Mr Thompson.

Tags: lenders, area, credit card user, loss, richard thompson, card, cent deals.A report, cent

Home credit lenders must make it easier to compare deals

Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes to comparing deals and repayments on finance offered by home credit companies. The commission also added that the industry needed to ensure that consumers that repaid the loan earlier than arranged received some form of rebate. However, the commission has decided not to enforce a price cap, as officials state that this could hit some consumers hard.

Research showed that the average sum borrowed by UK consumers in the form of home credit was £300, with loans starting from around £100. The home credit industry has nearly two and a half million customers in the UK, and the majority of these borrow under five hundred pounds in the form of home credit. The Competition Commission, however, has decided not to place any price cap as more vulnerable consumers that may need more could otherwise find themselves in difficulties.

After it came to light that a small number of home credit companies were controlling the market when it came to this type of finance, the commission was said to be ‘opening the market’ when it came to home credit. The commission is in the stages of doing this, and has stated that lenders in this industry will need to publish their data on a website, so that consumers can then easily compare terms and costs in order to get the best deals.

With regards to its decision not to enforce price caps, the chairman of the commission said that he thought that capping might have “…reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit. We also felt that price caps could prove to be extremely difficult to apply and enforce in this industry.”

Tags: lenders, cards, deals, comparison, credit, offers

What is a Guaranteed Bad Credit Loan?

Today, there are many different loans to choose from. The types of loan and the terms and conditions that come attached to them are as wide and varied as the purposes people borrow them. However, there is one type of loan that seems to be increasing constantly in popularity, and this is the bad credit loan. Read more

Tags: personal guarantee, lenders, Loans, bad credit loan, high street store, undue financial difficulty, guaranteed bad credit loan, extra financial commitments