Future Mortgages slashes loan-to-value ratio by 20%

Specialist lender Future Mortgages plans to slash the maximum loan-to-value ratio by up to 20 per cent today for its prime and near-prime products.

Future Mortgages has reviewed its lending due to soaring demand for mortgages as well as daily price increases from competitors, resulting in the decision to tighten lending criteria.

The latest research from the Abbey Mortgage Index confirms that mortgage lenders can expect a high demand for five-year fixed rate mortgages, despite recent reports that the mortgage market is declining.

Additionally, the number of people who would choose any type of fixed mortgage product has risen from 35 per cent last month to 53 per cent this month. However tracker mortgages are less popular with only five per cent of respondents opting for them compared to 12 per cent last quarter.

Commenting on Future Mortgages’ decision, a spokesman said: “We see these actions as prudent and a strong indication of our desire to retain a market position in chosen sectors while simultaneously maintaining our servicing proposition in these challenging times.”

Tags: Abbey Mortgage, tracker, maximum, tracker mortgages, month, mortgage

Tracker mortgages ‘best bet’

Tracker mortgages are the “best bet” for those consumers who want to benefit from falling interest rates this year, according to finance experts.

Moneysupermarket.com said that while rates have been going down, increasing numbers of consumers have been reverting to tracker mortgages.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “At the moment, the percentage of customers that are on trackers… although it’s only 24 per cent, that’s the highest it’s been since back in 2005.”

She added that trend for rates is going to be down, so these products are useful for those spenders where affordability is no issue.

However, moneysupermarket.com warned that tracker mortgages should only be used by those consumers who can afford to risk higher repayments in the future.

The most recent figures from the Council of Mortgage Lenders, for December 2007, show that 29,600 tracker loans were taken out by homebuyers – making up 24 per cent of all home loans.

A survey by Fairinvestment.co.uk last week revealed that 23 per cent of Britons polled would favour a tracker mortgage.

Tags: tracker, Business Finance, favour, interest, Mortgages, home loans

Tracker mortgages ‘coming into their own’

Tracker mortgages are now “really coming into their own,” according to a leading mortgage adviser.

Ray Boulger, senior technical director and spokesperson for John Charcol, has said that, “providing the starting point is good”, a tracker nearly always gets you better value than a fixed rate mortgage.

He said: “We’ve been recommending tracker mortgages for those people who want a variable mortgage for a long time.”

A tracker ensures a consumer’s interest rate on a mortgage moves in line with the Bank of England’s rate. This does not leave home owners “at the mercy of your lender”.

There are a “proportion of lenders” that do not move their standard variable rates and associated discount rates in line with the Bank’s rate.

Mr Boulger added that “availability is not a problem” for tracker deals.

While Nationwide, Abbey and Halifax have all lowered their rates, following the Bank of England’s reduction in its base rate by a quarter of a per cent, the Press Association reports that they are three of only eight of the 120 or so mortgage lenders in the UK to have done so.

Tags: john charcol, variable rates, value, tracker, mortgage lenders, senior technical director and spokesperson

HSBC launches zero-fee mortgage policy

Those people averse to paying a fee on their mortgage may be enthused by HSBC’s new offering.

Available for a limited period until April 30th, every new HSBC mortgage taken up with the group will be fee-free.

During the peak spring homebuying season, people looking to invest in bricks and mortar can take up fixed-rate, tracker and discount HSBC mortgages with the usual booking fee of £499 waived.

Standard valuation, completion fees and exit fees will also not be applicable to HSBC mortgages.

Rob Chesters, head of mortgages at HSBC, said there had been a “proliferation” of high arrangement fees across the market “which can wipe out the savings made by re-mortgaging, particularly if the fee is wrapped up into the mortgage loan”.

He added: “However, it’s not just about upfront costs – further borrowing fees, admin fees and duplicate statement fees can all add up.

“Exit fees, in particular, are difficult for borrowers to compare – but while other lenders have been putting their exit fees up, HSBC’s has remained exactly the same – zero.”

HSBC mortgages also possess no higher lending charges, with flexible payments facilities also featuring.

Tags: spring homebuying season, borrowing fees, market, head of mortgages, United States, tracker, head