Tag: UK

Low Risk Borrowers Favored in the Mortgage Market

Posted by admin on September 9, 2015

Low risk home loan borrowers who have a mortgage at a low loan to
value, so that they have significantly more equity in their homes than
the amount they have borrowed, are the main beneficiaries of the record
low interest rates currently available in the UK. This low rate
environment in the current mortgage market means that home loan lending
is rising.

In addition to the low rates available (due to the
Bank of England’s base rate holding at a mere 0.5 per cent for nearly 5
years), there has also been increased competition between lending
institutions and two government schemes to encourage lending. These
facts have led to some of the lowest mortgage rates the UK has ever
experienced. But the benefits of this low rate environment are really
only available to the low risk borrowers.

High net worth mortgage clients benefiting from some of the lowest mortgage rates ever


With the UK governments Funding for Lending and Help To Buy schemes
offering banks and building societies access to inexpensive funds they
are able to offer some genuinely low rates, especially for high value
mortgage borrowers who are perceived as low risk.

It is these
high value, large mortgage borrowers with low ‘loan to values’ that have
benefited most because the most competitive mortgage deals are reserved
for those with a deposit of 30 percent or 40 per cent; a level that is
plainly unlikely to be available for young first-time buyers. The real
winners in this situationare the relatively small numbers of potential
home buyers who fall into the low risk category of lending.


Given that first time buyers are the life blood of the property market,
this situation cannot continue forever without further damage to the
already stagnant market. There will come a time when the lending
criteria imposed by banks and building societies will have to be
adjusted if they are to have any volume of business in the home loans
sector. There is an enormous potential market for first-time
buyersmortgages that is not being serviced while the few who are
fortunate enough to be able to borrow will see increasing competition
between lenders for their business. Loans at higher LTVs may soon start
to appear in greater numbers.

It is obvious that certain types
of borrower with plenty of equity and a high, secure income have seen
the cost of their mortgages fall significantly in recent years. Islay
Robinson, director of million pound mortgage specialist Enness Private
Clients believes that deals for borrowers with a 30 per cent to 40 per
cent deposit available have rarely, if ever, been lower. And, the
private banks and other non-traditional lenders thatLondonmortgage
brokers speak to on a daily basis have a keen appetite to lend to high
net worth finance clients.

For the mortgage market in the UK to
return to pre-credit crunch levels, these sorts of deals are going to
have to become available for first time buyers and those borrowers with
only 10 to 20 per cent of the purchase price available as a deposit.
Nevertheless, low risk, large mortgageborrowerswill continue to benefit
from superb deals.

Large Mortgage Choice Greater Than Ever

Posted by admin on August 26, 2015

If you have been seeking to secure a large mortgage (one in excess
of a million pounds) then 2013 has been a year when you were likely to
find a bigger choice of deals than at any time since the start of the
economic slump. More and more mainstream banks and other lenders have
been targeting the high value mortgage market and the choice of million
pound mortgages in the UK is increasing.

Some well-known lending institutions are now
considering lending over 1 million when previously their limit was
perhaps half of this amount. However, many mortgage brokers have urged
high net worth mortgage clients to take professional advice before
approaching a high street lender directly because many of them do not
have the underwriting experience to handle very large mortgages and
complex financial arrangements.

Santander, Investec and Scottish
Widows have launched large home load products aimed particularly at
professionals, who are likely to have well-mapped out career paths.Other
well-known lenders said to be considering million pound mortgages
include the Woolwich, HSBC, NatWest, Nationwide and Halifax.


During recent years many mainstream lenders withdrew their large home
loan offerings and the smaller private banks stepped in to fill the gap
and offer high value mortgages. However, as house-buying activity in the
prime UK property market continues to increase, more banks and building
societies have begun to offer larger loans again. Some are offering
two-year fixed rate deals at under 2 per cent for loans up to 5 million
but these are likely to be available only for those with straightforward
financial affairs and not for those with complicated income
arrangements.


Lenders tend to charge higher arrangement fees for loans in excess of 1
million but if that comes associated with a very competitive interest
rate then it is often worth paying when factored in to the lifetime cost
of the mortgage. Private banks, with their willingness to consider less
than straightforward arrangements with regard to income and ownership,
are still likely to be the best option for wealthy borrowers with
complex affairs. There rates are not significantly higher than the
mainstream lenders and private banks bring added expertise and
flexibility to the arrangement as well as specialist underwriters used
to dealing with high net worth finance clients. High street lenders
without this experience to properly assess a complex financial situation
usually just do not approve the loan.

Some private banks may
require a borrower to transfer some assets under management to secure a
low rate, but this is often a small price to pay for the savings that
can be made on the monthly repayments of a million pound plus mortgage.


While many more lenders will now consider a high net worth mortgage
client than in the past 5 years, many simply do not have the
underwriting expertise to agree a deal for borrowers with complex income
streams according tothe London mortgage adviser Enness Private Clients.
Most high street banks will only consider million pound mortgage deals
for clients with very straightforward income and assets. Consequently,
most high value mortgage borrowers will still be better served by
speaking to a broker who can approach a lender who they know understands
their particular situation.

Advantages of Debt Counselling Advice

Posted by admin on July 16, 2015

The deluge of heavy debts is a disturbing issue and needs some
foolproof solution to get out of it. Looking for a debt counselling
advice at such hard times is the only option left to the bill or and the
step towards it should be immediate. The debt counseling professionals
offer their services to help out at the times of severe bill conditions.

There are several benefits of arrear counselling offered by the professionals. Some of them are:


The debt counseling professionals try to merge all the bills into a
single loan plan. This is a great advantage that reduces a stress of a
arrearsor and create a bunch of loans into one to repay it for a longer
time.

Just a single payment in a month’s time has been the
requirement of the arrears counseling companies and they look after the
needs of your creditors, every month and pay to them on the behalf of
the debtors.

They are professionals in the field of arrears
counseling and are well-versed with the credit market scenario. They
know the guidelines through which they can convince the creditors to
reduce the rate of interest of the loans.

The professionals who hold higher experience in the field may also help you in reducing the amount of your loan.


One of the very important aspects of counseling advice is that a billor
gets free from the inconveniences caused by answering the creditors
often. Counselors look into the situation and offer a sigh of a relief
to the billor from answering the creditors.


Debt counseling companies offer the repayment facility of the arrears
for a longer time and it helps to split the debts into longer periods
and hence, the amount of the repayment that has to be done every month
gets reduced.

They are the best guides to help you to get clear out of the debts and offer better solutions than filing for bankruptcy.


There are several companies offering their services in counseling and
charge a certain amount for their services. It is the duty of a debtor
to learn about their charges before hiring them. Ultimately, they are
the people who will offer suggestions to help the debtor to get free
from the unnecessary burden of account. The debtor must have enough
money to pay to these companies for acquiring efficient debt settlement
measures.

The reliability and experience of any debt settlement
company count and hiring any account advisor without complete research
may land a debtor into a wrong place. A account counseling company that
saves you from the situation of getting bankrupt is the company any
debtor actually needs.

There are many debt counseling companies
offering their advice on UK debt solutions. The lack of debt management
can be the reason in certain cases for a person to become a victim of
heavy accounts. Any good UK debt solution provider will offer the best
debt management advice along with the credit card account management UK
to protect you from the state of getting bankrupt.

There are
many debt relief options and a debtor must not delay to consider the
help of debt relief companies for the quickest solution.

The Dangers of a Foreign Currency Mortgage

Posted by admin on June 13, 2015


In the 2000s some British mortgage borrowers who were sold complicated
foreign currency mortgages are suffering a disadvantage with high
repayments and increasing debt because of large fluctuations in exchange
rates. The hardest hit borrowers have been those with home loans linked
to the Japanese yen which has recentlyrisen to levels not seen in over
20 years.


Many experts believe that these foreign currency mortgages should never
have been sold to clients who did not fully appreciate the risks
attached to such deals and urge clients to always take professional
advice regarding foreign currency loans.

Japanese yen foreign
currency mortgages were sold in the early to mid 2000sin order for
borrowers to take advantage of the low interest rates in Japan at a time
when interest rates were not low in the UK. This meant that monthly
mortgage repayments were less expensive than for a normal UK mortgage.
In 2004the difference in yen mortgage interest rates and sterling
interest rates wasabout 5 per cent so the savings were substantial.


However, the risk associated with a mortgagesin a foreign currency is
that if the foreign currency increases in value against sterling, the
monthly repayments go up in equivalent sterling terms. In addition, the
total amount of the debt in sterling also rises.

Shocking
figures that illustrate just how great this risk is show that a Japanese
yen based mortgage equivalent to 500,000 in 2004 would have increased
to a debt of 770,000 by 2009 and a staggering 855,000 by 2012 because
the yen-sterling exchange rate had risen from 200 to 117 to the pound
over that period.


Japanese yen, Swiss franc and US dollarmortgages were all sold by
well-known British banks in particular to UK expats living overseas, but
experts have argued that foreign currency mortgages are only suitable
for sophisticated investors who understand the risks. Foreign currency
mortgages can be a good solution for some high net worth clients who,
for instance,do not receive their income in sterling or who have major
assets in foreign countries. Such investors can benefit from this type
of deal but banks were selling these loans in the 2000s to less
knowledgeable investors as a means of just reducing the interest rate
payable. There was no managed multi-currency loan arrangement to hedge
the associated risks so it proved to be a highly risky strategy.


Some of the borrowers whose mortgages have been adversely affected by
the yen exchange rate rises have reported that they were not fully
warned of the dangers of such loans. Furthermore, many of them are not
covered by the UK financial services jurisdiction so cannot have their
complaints investigated by the UK’s financial ombudsman.

High
net worth mortgage experts believe that foreign currency mortgages are
harder to obtain now than they were 10 years ago but many banks still
offer this facility in the UK. Anyone considering such a home loan
should take professional advice from a high value mortgage broker with
experience in this type of lending and ensure they fully understand the
risks before agreeing to such a loan.

All You Need To Know About Debt Relief Orders

Posted by admin on May 26, 2015

All You Need To Know About Debt Relief Orders (DRO)

The financial climate within the UK continues to be a
perilous place and it is extremely common for people to find themselves
accruing higher levels of debt than they want and/or can manage.

However,
a Debt Relief Order is one of the ways in which those with significant
levels of debt can find a solution to keep the creditors at bay. Here we
take a look at the features of Debt Relief Orders, as well as the
benefits and risks associated with this type of debt reduction plan.

What is a Debt Relief Order?

Debt
Relief Orders were created in order to offer a binding and legally
recognised means for a small but specific group of debtors who cannot
obtain debt relief through other means.

A DRO is an order granted by an official receiver to help insolvent individuals address their debt after just one year.

Once
granted, the debtor is not required to make any other repayments toward
their debts during the time the order is in place and, if their
financial circumstances do not change during this period, their debts
will be written-off when the Debt Relief Order comes to an end after 12
months.

. Debt Management Plans are specific plans made depending
on an individual’s income and expenditure and are aimed to help them
repay and clear debts at a rate they can afford. The Debt Management
Plan will enable reduced monthly payments and could help against the
repossession of personal belongings. A Debt Relief Order is an order
people can apply for when they are unable to pay off their debts. DRO’s
are granted by the Insolvency Service and are a cheaper debt solution
than bankruptcy. Debt Relief Orders are aimed at people with debts less
than 15.000

Qualification for a Debt Relief Order

.Individuals can apply online through an approved intermediary if they meet the following criteria: