Tag: UK

More Choice of Mortgage Deals for High Deposit Borrowers

Posted by admin on July 4, 2016

Over the last six years the number of deals available to high value
mortgage clients has been decreasing. As lenders have fallen by the
wayside and those that remain have become more reluctant to lend, the
choice of large mortgage deals has fallen sharply.

However, new research has found one area of the
residential property sector which has benefited over the last six years:
those buyers who are seeking a large mortgage and have a large deposit.
Typically these buyers will be high net worth clients looking to borrow
less than 60 per cent of their home’s value. The number of deals
available to these clients has increased significantly during this time
as lenders compete for such low-risk business. Here, we look at the one
area of the mortgage market that is seeing strong competition, in
contrast to the major part of the market in the UK.

Research
from financial analysts Moneyfacts has discovered that the number of
mortgage products in the 60 per cent ‘loan to value’ bracket has
rocketed since 2007. There are now approaching 500 deals available for
people with a 40 per cent deposit, compared to just 21 in October 2007.

Sylvia Waycot, of Moneyfacts.co.uk, said that in 2007 lenders offered
high loan to values as a norm. High income multiples and sub-prime were
not automatically rejected. This all changed in 2008 with the onset of
the banking crisis. High loan to values quickly disappeared and even
today are few and far between. They were predominately replaced with the
60 per cent loan to value which is virtually risk-less to any lender
and as a result, the first-time buyer market has stagnated.

At
times price wars have broken out between lenders keen to secure high
deposit mortgage business. Banks in the UK such as HSBC have even
offered five year fixed rate mortgages at under 3 per cent.

Hugh Wade-Jones, director of London mortgage adviser Enness Private
Clients, said that while mortgage deals for first time buyers and for
those seeking higher loan to values are hard to come by, there are
plenty of deals if you are a large mortgage borrower looking for under
60 per cent ‘loan to value’. The low risk nature of this type of
borrowing has led many lenders to offer superb rates in order to attract
good quality large mortgage business.

As well as the mortgage
deals reported by MoneyFacts there are countless more products available
through private banks in the UK and overseas. High value mortgage
clients who need over 500,000 at a low “loan to value” have a superb
choice of deals right now.

The Government’s Funding for Lending
scheme has been a contributing factor to the increased choice of deals.
There were 87 new products at 60 per cent loan to value in the first few
months of the schemes introduction. However, some experts believe the
government initiative is not targeting the right type of borrower as it
was designed to help first time buyers without a large deposit. Yet the
number of new deals available for those with only a 10 per cent deposit
remains limited. It has simply improved the choice of deals for those
seeking a large mortgage, who already had a good range of choices
anyway. Only time will tell if the government’s new Help To Buy scheme
will redress this imbalance.

Mortgage Lending at its Highest Level Since 2007

Posted by admin on June 4, 2016

The latest official figures show that the recovery in the UK’s large
mortgage market is alive and well and continued into the third quarter
of 2013. The most recent data from the Council of Mortgage Lenders (CML)
showed that 27.1 billion of house purchase loans were advanced between
July and September, the highest quarterly figure since the end of 2007.

Lending to first time buyers is up by a third year-on-year while buy to
let lending is up 36 per cent. We look at the latest figures that show
the high value mortgage market in the UK is recovering strongly.

First time buyers driving the large mortgage market

Despite a small drop in lending in September, the UK’s large mortgage
sector has grown strongly in the past year according to CML
figures.Lending to first-time buyers was up 34 per cent in September
2013 compared to September 2012 while buy to let lending was 36 per cent
higher in the third quarter of 2013 than in the same period last year.

Paul Smee, director general of the CML, said that the typical seasonal
fall in lending in September was expected but the market is seeing
appreciable year-on-year and quarterly lending rises that suggest the
market is continuing its recovery.

He said that first-time
buyers were a key driver in the first half of 2013 but now home movers
and remortgages are showing renewed strength which puts the market in a
good position to continue momentum into the final few months of 2013 and
the new year.

In the third quarter of 2013, 74,800 loans were
advanced to first-time buyers witha value of 10.4billion.The typical
first-time buyer income multiple continued an upward trend with
first-time buyers typically borrowing 3.39 times their gross income.

And, high value mortgage customers are increasingly choosing fixed rate
deals. Jeremy Duncombe, director, Legal & General Mortgage Club,
said that 2013 had seen a revival in fixed rate products. 86 per cent of
all house purchases and re-mortgages in August were taken out with a
fixed rate mortgage deal. This is compared to 67 per cent for August
2012 and 77 per cent at the peak of the housing boom in August 2007.

He pointed out that the popularity of fixed products is in part due to
the historically low rates currently available.The average rate in
August 2013 was 3.31per cent, compared to 4.25 per cent and 5.86 per
cent for the same periods in 2012 and 2007 respectively.

Buy to let lending also booming

The CML figures showed that 1.9 billion of buy to let loans were
advanced in September, unchanged from August. Overall, buy-to-let
lending in the third quarter of 2013 grew with 43,900 loans advanced in
this quarter which was up 16 per cent on the second quarter and up 36
per centon the same period last year.

Both buy to let purchase
and remortgage lending has increased in recent months, suggesting that
landlords are keen to withdraw equity from their properties in order to
reinvest.

Islay Robinson, CEO of London mortgage adviser Enness
Private Clients, said “There are some excellent buy to let deals
available in the market and so many clients are taking advantage of
these low rates. Whether it’s simply to reduce their borrowing costs or
to withdraw capital to expand their portfolios, there are plenty of
great large mortgagedeals available”.

Why Borrowers are Increasingly Seeking Specialist Mortgage Advice

Posted by admin on May 25, 2016

More and more borrowers in the UK are using the services of
specialist mortgage advisers to help them secure the best home loan
deal.The Council of Mortgage Lenders revealed that brokers increased
their market share across all business types in the first quarter of
2013; a clear indication that customers want to draw on the financial
and mortgage experience of these advisers.

As interest rates continue to be driven down due to
various government schemes to boost the property market, the range of
mortgage deals available has also reached its highest level for more
than 5 years.

Data from the Council of Mortgage Lenders shows
that more than half of first-time buyers and those people securing a
remortgage deal arranged the loan through a mortgage broker while 48 per
cent of other home movers also used an intermediary to assist with the
funding for their purchase.

These data reveal that more and more
people are appreciating that selecting the right mortgage for their
specific set of circumstances is not always a straightforward process
and that consulting a professional adviser can not only streamline the
process and make it less stressful but also ensure the right choice is
made.

Affordability criteria by which mainstream lenders assess
potential borrowers remain tight, and high value mortgage clients are
often much more likely to find the right deal by using the services of
an intermediary. Brokers take the time to understand the needs of a
client and assess their financial circumstances in detail, unlike
mainstream banks, which still tend to use a tick box list to determine
affordability.

The Association of Mortgage Intermediaries (AMI) have been predicting
for some months that recent initiatives would encourage consumers back
into the market and intermediaries continue to be able to help those
consumers. AMI anticipate that this tendency will continue during 2014.

So the number of borrowers asking a broker for guidance and help has
been continuing to increase but so too has the number of home loan
products available to those potential borrowers so much so that the
choice of mortgage deals in the UK is now higher than at any time in the
past 5 years.

A report from the analysts Money facts indicated
that there are approaching two thousand home loan products available
from UK lending institutions. This is the greatest range of options
since early 2008 and more than double the number of deals available in
March 2009.

Large mortgage specialists are suggesting that as
the choice of mortgage products increases, so does the complexity of the
mortgage market. This makes it increasingly hard for a typical home
owner to find the best mortgage from the options available to them. This
is one of the reasons that brokers have seen a rise in interest from
clients in recent months. Mortgage advisers have access to a variety of
products not available from mainstream lenders and can establish exactly
what a borrower is looking for and match the client with the right deal
from the right lender.

How to Choose a Mortgage Broker

Posted by admin on May 12, 2016

A mortgage broker is a specialist who is trained to help you choose the
best deal in the market. Their services do not come for free, but the
fee is worth the money because your mortgage is more than likely to
outlast much of your furniture! So how does one choose a good broker?
Here are a few tips to help you;

a) Do you need a broker: Unlike the good old days of yore, mortgage
calculation isn’t simply about choosing between variable and fixed
interest. Almost every borrower has laid claim to a special type of
loan- you can now choose from a self-certification mortgage, an offset
mortgage or some other type. A broker can make sense of the different
types and help you choose one that suits your circumstances. If you are
one of the those who can’t be really bothered about shopping for the
best financial package, and would rather prefer someone else do it for
you, a mortgage broker is just right for you.

b) Choosing
between a tied or independent brokers: Tied brokers work for a
particular service provider and offer you loan options related to his
employers. They usually work for free, but are not always reliable.
Independent mortgage brokers however, do not work for anybody. They
charge you a onetime commission, but in return give you different
options offered by other borrowers. He or she can suggest you a loan
scheme that best matches your condition.

c) Credentials: In the
UK, mortgage brokers should be authorized by the Financial Service
Authority or FSA to give you advice on financial matters. You can always
check if your broker is registered with the FSA through the agency
website. The Mortgage Code Compliance Board or MCCB is also an authority
on this issue.

d) Get everything in writing: Mortgage brokers
in most cases promise you a lot, but when it comes to enforcing them,
almost all of them disappear into thin air! Make sure that these
promises, including details about their fees in writing.

e) Open Communication: The mortgage broker should openly communicate about the process.

f) When things go wrong: If things turn sour between you and the
broker, you can always lodge a complaint or ask the MCCB to address your
grievances. If the broker is tied to the Mortgage Code and does not
offer a satisfactory reply, the MCCB can initiate disciplinary action
against the broker.

These are just some of the points to be considered to help you find a mortgage broker.

High Net Worth Mortgage Market is Prospering in the UK

Posted by admin on February 18, 2016

The mainstream mortgage market in the UK has, in recent years, been
beset by a number of crises brought on by the economic slump. This has
made it difficult for ordinary borrowers to reliably access mortgages
that would have been easy to secure a few years ago in better times.
But, conversely, the high net worth mortgage market servicing those
looking to borrow 1 million or more has not suffered in the same way and
continues to prosper.

With continuing economic uncertainty within the Eurozone and the wider
global economy many overseas investors are buying property in London’s
most prestigious areas resulting in a London property market that is not
suffering the same stagnation or downturn as in many other parts of the
UK. High end estate agents and mortgage brokers are benefiting from
these prosperous times whilst their counterparts in other regions are
still feeling the pinch of the recession. However, there are only so
many prime properties that are desirable to wealthy overseas investors
looking for a prestigious address in the capital and estate agents are
struggling to keep up with the continuing demand, especially when many
of the very top-end homes usually remain in the same family for several
generations.

The pressure has been eased somewhat by some of the
high quality new developments of recent years such as the Shard or the
homes at One Hyde Park but, nevertheless, there are still waiting lists
of high net worth buying wishing to invest in the London property
market. This is making anyone involved in selling property think about
the less obvious alternatives for buyers wanting a family home. For
instance, many period apartment buildings in the capital were originally
a single house and can be returned to that state without too much
difficulty, provided planning permission can be obtained. This is
clearly not an easy solution as every apartment in the building would
have to be purchased but it can be one worth considering, especially if a
potential buyer has been waiting a long time for the right property to
come to the market. Even more so if they have lost out to higher bidders
when their ideal property eventually comes up for sale.

Another alternative to waiting for the ideal family home is to consider
buyer a commercial building that could be developed for residential
use. Again, not an easy option but commercial building often have high
ceilings and large spaces that can make excellent and unique family
homes. With property developers buying such buildings and waiting for
their short leases to expire there is clearly a market for converting
commercial buildings into residential property. An added bonus is that
planners tend to look favourably on converting commercial buildings into
new homes.

So London’s prime property market continues to be
buoyant, unlike the mainstream market, and still has many opportunities
in the most sought after postcodes for investors willing to think
outside the box. Savvy developers are helping meet record demand for top
end properties for high net worth buyers and specialist London mortgage
brokers are also helping by arranging large mortgages for these, often
overseas, buyers.

Can Mortgage Borrowers Take Advantage of Headline Deals

Posted by admin on December 15, 2015

Despite the Bank of England Base Rate continuing at a record low and
mortgage rates falling to record lows, millions of UK homeowners are
still finding it difficult to meet the criteria required to benefit from
some of the market leading mortgage deals.

Lending institutions continue to be criticised for
their stringent affordability criteria and also for increasing the high
fees that must be paid to secure some of the best rate deals. However,
some experts think that paying higher fees for lower interest rate deals
may actually be a good long-term solution, especially for some high net
worth mortgage clients. Keep reading to learn more.

High value mortgage clients can benefit from paying a higher fee for a better deal

The UK government’s Funding for Lending and Help To Buy schemes have
enabled high street banks, building societies and other lending
institutions to access cheap funding in return for their lending more
readily to private individuals and small businesses. However, opponents
of these schemes are of the opinion that they only work for those with a
substantial amount of equity in their homes already and they do not
help those whom they were designed to help i.e. first-time buyers
seeking a mortgage.

Figures reveal that average two-year
fixed-rate mortgages have fallen significantly for those borrowing 75
per cent or less of their new home’s cost. But borrowers who require 90
per cent of a home’s value are still paying more; in some cases up to 1
per cent more for their borrowing, ironically the people who can
arguably least afford it and who the government schemes were supposed to
help. All of this while some lenders are now offering some of their
cheapest-ever mortgage deals, with the proviso that the borrower can
meet the stringent affordability criteria.

However, the best deals are available to those mortgage clients who
have at least a 40 per cent deposit, or equivalent equity in their
current home. But although there are extremely attractive rates for
those with substantial deposits the associated arrangement fees have
been steadily increasing with some fees pushing 2,000.

Experts
are also warning those borrowers considering a fixed-rate deal,
especially one as short as 2 years, to check what the rate will be once
the fixed rate period expires. For example, some two year deals around
the 3 per cent mark will almost double after the end of the fix period
so dramatically increase the monthly repayment amount on the mortgage.

Mortgage deals with high arrangement fees but a lower rate may make
these products seem less attractive for borrowers with a small mortgage
but high value mortgage clients may actually benefit from lower rates
and higher fees over the life of the mortgage. So it is always essential
to look at the overall cost of the mortgage not just the initial
headline rate; take into account arrangement fees and the reversion rate
one any fixed rate period is over. These high value mortgage deals
show, more than ever, that high net worth finance clients should take
all the fees and charges into account when choosing a large mortgage.

The Majority of People Fail to Grasp the True Cost of Their Mortgage

Posted by admin on December 15, 2015

The mortgage fees and charges applied by banks and building societies
are not always as clear as they could be and many people do not
understand exactly how much a mortgage will cost them over the lifetime
of the loan. Many simply ficus on the monthly repayments and the
interest rate they are paying. Yet research has revealed that only five
in a thousand people in the UK understand the true cost of their
mortgage deals. The survey by which found that a staggering 99.5 per
cent of borrowers failed to grasp all the costs involved with the
average mortgage deal.

Lenders are being urged to change the way they communicate their
mortgage fees as a result of this research from the consumer group.
However, the data is not wide ranging as it only looked at 2-year fixed
rate deals based on a 100,000 home loan but it did indicate that the
average consumer found it difficult to assess which was the cheapest of a
range of deals because of the lack of transparency in the fees and
charges and this is what is of most concern.

Whilst the results
varied depending on the type of borrower questioned, the survey
nevertheless showed that only a minority could correctly order 5
mortgage deals from most expensive to least expensive so this is
worrying research as it clearly shows that most borrowers find it hard
to work out the total cost of a large mortgage deal taking all costs
into account.

Sometimes the deal with a higher arrangement fee
can work out costing less and sometimes the deal with the lowest
interest rate is not the cheapest. It, obviously depends on the level of
mortgage you want to take out, the interest rate basis (fixed, tracker
or standard variable) and the mortgage term. It is often worth taking
specialist advice to establish which is the best deal for your own
personal and financial circumstances

On the whole mortgage borrowers find it difficult to accept that a low
interest rate deal is not necessarily the cheapest; a typical borrower
is still attracted by the headline rate rather than by the overall cost.

Nevertheless, lenders should be more transparent when showing
their charging structures so that borrowers have the opportunity to more
easily compare total costs rather than simply headline rates. This is
so important because more than 80 per cent of the thousands of mortgages
available in the UK include arrangement fees or other types of fee. And
mortgage arrangement fees have been rising rapidly over the past 2 or 3
years.

Many of the very low mortgage interest rates now on
offer can seem very attractive, as indeed some are, but the flip side of
those low rates is that big mortgage arrangement fees are being
imposed. These fees have risen dramatically,making it even more
important for borrowers to understand the cost of their mortgage over
the lifetime of the deal, especially those with large mortgages that are
likely to incur higher charges. If people are struggling to understand
such an important financial commitment them lenders should be doing more
to help clarify the costs.

Are Private Banks an Alternative for Mortgage Lending

Posted by admin on November 30, 2015

How satisfied are you with the state of UK banks? Have you found that
you have been unable to borrow the level of mortgage that you need
because mainstream lenders simply have a tick box mentality with regard
to affordability criteria? Are you struggling to find a good home loan
deal at a favorable rate of interest? Are the stringent lending criteria
of the high street banks and building societies preventing you from
moving house?

If you have experienced any of these problems then you are not alone.
Research has revealed that the majority of high net worth customers
believe that the UK banking industry could provide a better service to
borrowers. High Net Worth individuals (HNWs) are those who earn over
300,000 per year or hold over 3 million pounds of assets.

So, if
you’re looking for better banking or lending, a private bank mortgage
or bank account may be the answer. Private bank mortgages offer a great
alternative to ‘tick-box’ focused lenders.

The research from
Duncan Lawrie Private Bank questioned 1,000 clients, all of whom hold
assets of over 250,000. The survey found that seven out of ten of these
high net worth finance clients believe the UK banking industry could do
better.

Around three quarters of respondents (76 per cent) to
this particular survey would prefer a more personalized service from
their banks. And, nearly one in ten said they have had their bank
accounts hacked. Of those people who were hacked, 18 per cent stated
that their bank did not recognize the change in spending habits that
should have flagged up a problem.

And it is not just the very
wealthy who have formed this opinion of banks. Mortgage Solutions has
reported that the banking sector has come under criticism in recent
years for its bonus culture, putting short-term profitability ahead of
customers and, more recently, the Libor-fixing scandal, which continues
to appear in the news long after it was first exposed.

As far as consumers are concerned the retail banking industry has
changed significantly in the last 30 to 40 years. Whilst bank customers
value the advantages of internet banking and mobile banking to help them
manage their accounts and finances more easily, they also wish for a
return to the traditional values that the banks once had as trusted
advisers who put the customers’ interests first. And this is why private
banks have increased in popularity.

As well as offering a
better banking service, private bank mortgages have also become more
popular, particularly among high value mortgage clients, in recent
years.Over the last few years, private banks have plugged a gap that has
been created by the reluctance of mainstream banks and building
societies to lend high value mortgages to high net worth clients.

Many London mortgage brokers have, during this period, built up strong
relationships with dozens of private banks in the UK and overseas. These
banks have an appetite to lend and are eager to offer their bespoke
services to high net worth mortgage clients.

High value mortgage
borrowers often have complicated income and property ownership
structures which fail to meet the ‘tick-box’ lending and affordability
criteria of mainstream banks.Private banks are much more likely to take
these factors into account and make a lending decision based on common
sense. They can offer flexible, tailored large mortgages and a level of
service which is demanded by high net worth clients.”

Mortgage Market Review and Its Impact For Borrowers

Posted by admin on October 15, 2015

Robin Hood was famous for robbing the rich to give to the poor and
you could be forgiven for thinking that today the very wealthy were
attempting the reverse that situation when it comes to securing the best
mortgage deals. It appears that there is one set of rules for some and a
different set of rules for others, with wealthier borrowers now being
exempt from certain legislation and criteria imposed on mainstream
borrowers. However taking a ‘one size fits all’ approach to lending
really benefits no-one and the main point of regulation is to protect
the best interests of each individual client.

The Mortgage Market Review focuses on “Treating
Customers Fairly” and trying to hard wire a more conservative, but
common sense, approach to all areas of lending. However, some of the
changes are indeed a bonus for high net worth borrowers.

Firstly, entrepreneurs (business people borrowing against their homes)
will enjoy far more flexible criteria and even be able to ‘opt out’ of
standard affordability checks providing they can offer a credible
business plan. However, if banks remain unwilling to lend then more
traditional alternative funding routes typically used by entrepreneurs
may still be the quickest and simplest option.

Secondly, High
Net Worth (HNW) individuals, which are typically classed as those
earning upwards of 300,000 per year in the UK or those that have a net
asset base of 3,000,000 or more, can also enjoy a greater degree of
flexibility and be able to opt out of standard criteria tests when
borrowing a mortgage. The exemption for High Net Worth (HNW) borrowers
from stringent affordability criteria provides lenders with the
opportunity to be flexible when regular checks are not relevant for
certain categories of clients. Many HNW clients have a high level of
complexity with regards their income and assets. Many have irregular
income but their personal or family wealth is so vast that a standard
affordability check are effectively pointless as the risk to the bank or
other lending institutions is minuscule.

All things considered, the Mortgage Market Review willingness to show a
reasonable degree of flexibility for high net worth individuals must
surely be welcomed by all; both by the borrowers themselves but also by
the lenders, which have been freed from irrelevant legislation in
certain circumstances.

Obviously no one wants to see a return to
the days of the overly-easy credit available with minimal checks,
before the global financial crisis. This was one of the main reasons for
the economic predicament in which we now find ourselves embroiled in
the UK, Europe and the USA. But sensible lending does not have to mean
that checking the credit worthiness of a large mortgage borrower can be
done effectively by purely a box ticking exercise and disregarding
anyone who does not fit a particular profile; some common sense must
always be brought into the equation. This is good news for high net
worth mortgage borrowers as a whole and finally a common sense approach
has developed in the mortgage market that has been lacking for too long.

Debt Management Leads – Need of The Hour Seek The Help of a Pro!

Posted by admin on September 17, 2015

One inevitable factor is the changing market scenario. This means,
one should be prepared to ride the financial rollercoaster, not to miss
the rising inflation. The increasing inflation coupled with higher debts
leads to a financial crisis, one that many people in the UK face. Based
on statistical report from 2010, nearly 58% of the people in UK who are
in dire need to minimise or close their debts, turn to their friends or
relatives for help. However, today more and more people are seeking
professional help thereby leading to a rise in debt management companies
across the country. Two years ago, Mintel estimated the total number of
debt management plans to be somewhere around 600,000 with around 9
billion funds under management. This clearly states that market is
growing rapidly bringing us face to face with yet another challenge;
albeit a different one.

As mentioned above, many people still resort to
informal sources for help. Convincing the lot to turn to a Debt
Management Company for alleviating the crisis is the challenge. Mass or
bulk mailers will not help. So what will? ‘Qualified ‘debt management
leads’ is the answer! PPI reclaim leads or debt management leads that
have been verified and screened will help debt control companies reach
their prospects with more ease and efficiency. On the other hand, people
who are willing to seek professional advice will have help knocking at
their door instead of the other way round. This connection is best
established by a professional PPI reclaim leads provider.

Typically, debt management leads are generated involving tried and
tested multi-tier process that ensures a high conversion rate. Let us
take for example PPI reclaim leads. Data are collected with the help of
surveys conducted by a team of trained executives who pose some basic
question that qualify the lead.

“Do you have a minimum loan amount of 5000 taken in the last 6 years on
which you have payment protection insurance? If answer is Yes;”Do you
wish to be contacted by a debt control company?

If the answer to
both the questions is YES, they further collect the lead’s personal
information like name, address & telephone Number. The leads are
further audited for quality in terms of accuracy and completeness of
data. Some providers also include bespoke questions like “Do you possess
unsecured debts in the range of 5,000 and 15,000 liable to 2 or more
companies and are seeking professional help?” This helps to focus on a
specific target group. For more information on home insurance renewal
data or PPI reclaim leads please visit http://www.silverbirdmarketing.com.