Lenders consider lower deposits from borrowers

A number of recent reports have suggested that some lenders in the UK are now considering lower deposits from first time buyers. This comes after a particularly difficult couple of years where many first time buyers and low income families have been unable to get a mortgage because of the extortionate deposits that lenders have been demanding from customers. Read more

Tags: Mortgages, extortionate deposits, Super jumbo mortgage, traditional mortgage, Mortgage loan, United Kingdom

Consumers ‘no longer king’ in mortgage market

The mortgage market has completely changed over the last year and it is now likely that consumers wishing to take out mortgages will be hit with arrangement fees, an expert has commented. Read more

Tags: Super jumbo mortgage, king, Mortgages, mortgage market, loan, editor, move

It’s ‘always worth’ comparing mortgages, says expert

Independent website Your Mortgage has told consumers not to be content with their current mortgages deals because it is “always worth” comparing mortgages from different lenders to try to get a better one. Read more

Tags: different lenders, Mortgages, compare mortgages, finance, Mortgage loan, Association, council of mortgage lenders, Super jumbo mortgage

Interest rate cuts may not affect credit availability, says expert

The Bank of England’s interest rate cuts are unlikely to have an effect on the declining availability of credit, says economic research consultancy Capital Economics.

Lenders reported that during the first quarter of 2008 they had reduced the availability of secured credit to households, and expect to reduce it further over the next three months.

This means that borrowers will be faced with putting down bigger deposits for mortgages than before, as well as paying higher mortgage rates.

Similarly, household unsecured credit availability has also dropped over the last three months with predictions that it will also continue to decline in the future.

Vicky Redwood, UK economist at Capital Economics, said that yesterday’s interest cuts would not make “a huge amount of difference” since lenders had failed to pass on previous cuts in interest rates to borrowers.

Borrowers will nevertheless benefit in the short-term from the cuts and lending rates should eventually drop, however Ms Redwood noted that “things are likely to get a little worse before they get a little better”.

Tags: Mortgages, rate, credit availability, Household, availability, bank

Green mortgages ‘not affected by the credit crunch’

Green mortgages have not been affected by the credit crunch, due to the “type of person” who takes one out claims one lender.

Norwich and Peterborough Building Society said that, despite concern over interest rates, there has been no change in the numbers of people taking out green mortgages.

“The reason they’re interested in a green mortgage is because of their personal ethics, so we’ve seen no difference at all,” said Alison Rolls, a spokesperson for the business.

She adds that green mortgages are still very much a “niche product” with growth being much slower than would be good for the environment.

Overall more consumers still need to “put the environment more on their shopping list” and think less about interest rates.

According to Mortgages.co.uk, green mortgages aim to reduce negative impact on our environment.

Lenders that offer this package will often make contributions to charities that support the environment or the welfare of the less fortunate.

Tags: Peterborough Building Society, Alison Rolls, economics, support, Financial crisis of 2007–2009, credit crunch, Super jumbo mortgage

Effects of credit squeeze ‘hard to predict’

How long the impact of the global credit squeeze on the mortgage markets will last is not easy to forecast.

According to the Council of Mortgage Lenders (CML), it is not yet clear how long the credit problems will continue to affect the number of mortgage products on the market.

Bernard Clarke, a spokesperson for the CML that there is uncertainty over when the credit market will return to “normality” and if that “normality” will be the same as before credit crunch.

“There are implications within that for lenders operating in wholesale funding markets. The problems persist for now, and in the longer term we expect the wholesale funding market to improve and become more liquid, but perhaps it will not be as liquid as it was before,” he said.

Commenting on whether the credit squeeze will affect the types of products on the market, Mr Clarke added that time will tell how the government will set out to promote people taking on fixed-rate, long-term mortgages.

Tags: Subprime mortgage crisis, credit crunch, term, Super jumbo mortgage, Mortgage loan

Mortgage payments up 15%

Mortgage payments across England and Wales are increasing, leaving many homeowners in a precarious situation.

New figures, published by Woolwich Mortgages, shows that mortgage payments in April of this year reached £590.

That is an increase of £78 on the figure for the same month in 2006 and signals a rise in costs of 15 per cent.

Clearly this is going to have an effect on the financial situation of many homeowners and this is compounded by the fact that household net earnings have only increased by five per cent in the same time period.

Andy Gray, head of Woolwich Mortgages, is concerned that many people will be beginning to feel the pinch, especially if further interest rate rises are introduced.

“Mortgage borrowers are really getting squeezed. With the costs of council tax, petrol, food and drink, as well as mortgages, all increasing, consumers are seeing a large amount of their earnings being diverted to essentials, putting real pressure on disposable income,” he said.

“Most commentators are suggesting that interest rates will increase further this week. However, our research shows that that the three interest rate increases over the last 12 months are already starting to have a major impact on borrowers.”

The figures released for April put mortgage payments at the highest level they have been since Woolwich began collating the data in 2002.

Tags: Impact, Super jumbo mortgage, commentators, interest rate, disposable income, head, research, precarious situation