Looking For A New Mortgage Is Far More Complicated Today Than A Year Ago.
With interest rates currently falling so quickly, you might be wondering if now is the time to swap mortgages to see if you can get yourself a better product, which over the long term will save you money. But is this as quick to do as it was last year? Keith Lunt looks at how difficult this has now become.
Frankly, no. It is now far from easy to find yourself a new mortgage offer. The building societies have reacted to the current credit crunch by making it far harder to obtain a remortgage and at the same time many of the banks themselves are finding it harder to obtain the money they need for lending to customers. If they can’t get the money, they then have to further limit what they lend.
Many of the big lenders have now taken away their easy going remortgagesand are instead making it much harder for potential borrowers to take out a mortgage. They are putting huge boundaries around their mortgage deals that potential customers have to be able to climb before they stand any chance of obtaining a remortgage.
Aside from the fact that a lot of the lenders have increased the basic mortgage charges, making mortgage far more expensive just to take out, many have taken away deals that would appeal to the borrowers the banks are now worried about not being able to keep up repayments. They are securing themselves for the future by only accepting mortgage requests from those customers that they are convinced will always be able to pay back their mortgage. They are protecting themselves from the gamble they once used to take of risky lending in return for a high rate of return.
An example of this that is clear to see is the removal by the banks of the 125% remortgage. Now you would be struggling to find a lender willing to give you 90% of the building value as a loan. And in a lot of cases, even securing more than 75% of the home value has become extremely difficult.
So what can you do if you want to change mortgage and find a new remortgage rate to save you some cash, and take a benefit from falling loan rates? Well you can compare today’s mortage rates yourself and see what is about, but many of the rates on offer are only available for certain types of home buyers. It is more efficient to approach a local mortgage broker and get them to check mortgage rates for you instead. This need not be a difficult search. Many websites offer this contact service, so you can still effectively do the search over the internet. And by using a free service, you are saving yourself time, and hopefully cash.
Finding A New Mortgages Might To Be A Good Idea, But Not To All.
Mortgage offers are falling to a low and the bank’s base rate is predicted to hit an all time low. Is this the time to be looking for a remortgage?
Well, it all relies very much upon your own personal financial circumstances. If you are locked into a deal with redemption penalties then looking for a new mortgage might cost you more that it would save you. But if your current mortgage is approaching the end of the penalty term, or has finished any lock in periods, then it might be worth trying to compare mortage interest rates to find if there is a more efficient product out there on the market.
There is also, sadly, another group of people for whom finding a new mortgage rate might not be an easy or a cheap option. If you are unlucky enough to have bought your house within the last couple of years, then with the plummeting house prices currently seen in the market, it’s possible that at best your property is worth only what it was worth when you bought it. At worst, for those that bought at the peak of the home prices, it is possible that you have lost quite a large chunk of what you paid for the home.
The problem here is that you could find that your current mortgage borrowing is too high for the banks to be happy to lend to you. For example, if they were happy to lend you 90% of the value when you bought the house and it has now dropped in value by 10%, although the amount borrowed would be the same, the amount as a percentage of the property value has shot up to 100%. Many lenders are now dubious about such high lendings, in a lot of cases charging more to those who are borrowing more than 75%. So although your borrowing might have seemed OK to the banks when you took out your current mortgage, now they might not touch you with the proverbial barge pole.
And it’s not just those that have suffered property price drops that are in this difficult position. Until recently some banks would actually lend up to 125% of the house’s market value. If you were in this position when you took out the deal, unless your house value has risen by almost 40% or more, you would still be looking to borrow more than 90%. This would leave a lot of banks unlikely to be willing to help you.
If you are stuck with an expensive deal and want to move to a cheaper one, then the mortgage market can be a mine field. Make sure that you contact a mortgage advisor and let them compare remortgage rates for you, to see if they can find some suitable mortgages for you.
Keith Lunt writes on behalf of the comparemortgagerates.co.uk website, where you can find useful information about mortgage rates and contact a local broker who may be able to assist you in finding a new remortgage product.
The First Steps To Reclaiming Excessive Bank Fees. Background To Reclaiming Your Bank Fees
The first step to reclaiming your bank fees is very easy – write to the bank and request your money back! Yes, really!!! The letter, using a standard letter template (your address etc at the top) should give a reference of your bank account and include the date it was written.
Then, tell them that you are asking for a refund of all charges applied to your account in the past 6 years. Remind them that Under the Unfair Terms in Consumer Contracts Regulations 1999 fees must reflect administration costs and cannot be punitive. Then list the fees you have incurred and the amounts involved in each, pointing out that you do not believe the amounts to reflect the true cost to the bank.
Next, state the total amount that you have been charged and request that they give that back to you.
Finally, ask them to return the money in full within 14 days, or you will commence a claim against them for the whole amount, plus interest and costs. If you are at all uncertain, plenty of websites show example letters and include calculators to determine what you can claim.
You have given the bank 2 weeks to get back to you, so if it doesn’t pass them a reminder and phone them. They might try to put you off by offering a reply at a later date. In this case, write & phone telling them that you are giving them another 14 days before starting court proceedings.
Another trick the banks may use is to tell customers that they are mistaken and cannot reclaim or that the charges are not unfair. In this case, you are probably still at the point of a second letter and then start court action.
If they reply offering the entire claim then you have won. If they offer a partial refund then you have to decide whether it’s enough or whether you want to continue. If the amount of fees involved are small or the proportion they are offering to repay is large, then the effort of continuing a claim might make acceptance worth while. But if they are giving a very low offer, there might be good rewards in reclaiming for the full amount. Only you can decide.
If you haven’t got the result you want through letters, then it’s time to resort to bluffing your bank with court action. If your claim is for under £5,000, then you can go through the small claims court, even using the online system! If your claim than £5,000, then see if you can reduce the claim, either by not claiming all fees (for example if the claim is £5,001) or if the fees relate to more than one account, make multiple smaller reclaims.
At this point you then need to check how much a reclaim is going to cost you to start (you can claim for costs if you win / the bank does not defend the case). Then you can start the proceedings. But that is beyond the scope of this small writeup!
How Much Are You Likely To Try Reclaiming In Excessive Bank Charges? Background To Reclaiming Your Bank Charges
In brief, you can reclaim your bank charges you have incurred within the previous 6 years. This includes unfair fees for going overdrawn, letters informing you about bounced cheques and failed direct debits and similar. If the action more than likely only cost the bank a small amount and they have charged you significantly more, then there’s a chance of a claim. If these fees have caused you to be debited with further charges or interest, then you will also have a case there.
Further to this, you can claim for interest on the amount you are reclaiming – the interest you would have earned on the money had it been in your account.
But how can customers uncover how much the bank has charged you?
First, if you have kept your bank statements for the past 6 years then you just need to read through them. If you haven’t kept them all, if you are registered for online banking (or can register) then you may be able to determine the unfair fees from there.
Finally, if none of these are possible then you have to ask your bank. Asking for copies of back statements can prove quite expensive (and these charges DO NOT count as excessive!!!). But if you know exact dates of charges, then this might be not too pricey. But the other way is to write to the bank, quoting the Data Protection Act 1998, requesting them to tell you for all charges on the account:
• what the offence was
• the date of the offence / fee
• the amount of the fee
The bank has, by law, only 40 working days to respond. But it is allowed to charge you a fee of up to £10, so it is worth while including in this letter the full £10 fee made payable to the bank.
If your bank tries to supply you a copy of your statements they can try to charge you for that. To stop this, ensure that you tell the bank you are using the Data Protection Act 1998 to get a list of all fees.
Expenses
You can also claim expenses incurred in making your reclaim, although this can be best left in case the claim gets as far as the court stage and then used as a bargaining tool to stop that. Simply put, if the bank see that you will accept repayment now, or repayment plus costs if they don’t accept that, then there’s a financial inducement to them to settle.
Reasonable fees include court costs and a case has also included costs of preparing the case. To reclaim this, keep a record of how much time you spend preparing your case then include a charge at £9.25 per hour (the legal entitlement).
There are many different types of mortgage products available on the market today, even if the number of products is rapidly coming down in the falling economic climate. Choosing any particular type of product does reduce the field of choices, but whatever you choose, you are taking a gamble.
Not one of us can say for certainty whether base rates will hold fast, increase or decrease over the next year, let alone the next few years or the life of your next mortgage. Whatever you go for and you may not be able to afford repayments, which could cost you your house.
It is far the best idea to check your circumstances with a mortgage broker and talk to him or her about what types of mortgages should suit you and your outlook. But many of the terms can be confusing and you want to be certain that the advice that you are about to receive is honest and in your best interests. Mortgage brokers aren’t allowed to advise based on what products or potential lenders will pay them the best commissions. But that concern should still be in the back of your mind.
Worse still, some brokers might not even be willing to advise you on what products are likely to be best for you, in case if in a few years you don’t like the products they so diligently found for you and arranged, you might turn around and sue them. That’s how the process has left me feeling when I’ve been in that situation.
So if you are searching for a mortgage and are about to set out on the long road of trying to compare mortgage interest rates from everything that you find suitable, what exactly is this contract that you are signing up for?
And it is just that – a contract. It’s a contract between you and the bank that they will lend you a huge sum of money and that for the next however many years you will pay them back in small amounts. Don’t pay them back for too many months and the contract allows them to claim your house, evict you from the house and sell the property as quickly as they can for whatever they can get for it. Only if the house sells for more than the remaining mortgage, plus costs incurred in this process, may you see anything for your, potentially, years of repayments. And the building society would much rather sell the house quickly and recover all of their money, than hold out for a realistic price which gives you a fair share, but might take months to achieve a sale.
As with many products and services in life, shop around for a mortgage broker and ask them which of the interest rates currently available are best for you. Fill in several forms to get mortgage brokers to contact you and see what advice they can give you and what products they have on offer. When you are finding a few sounding the same, you know you should be getting a good answer there.
For people currently trying to compare mortgage rates in the current financial climate, you will be aware of just how difficult that once simple task can be. Products are constantly being dropped from the market and replaced by new mortgages and many products that were available are just being dropped.
Of the 10,000 plus different type of products that were available last year, many mortgages have fallen by the wayside without being replaced. There is far less choice on the market and those that are out there are becoming more and more trying to get hold of.
At the same time, many lenders are struggling to borrow the cash they need for themselves to be able to lend mortgages. Finding a mortgage is becoming increasingly more harder. And if you are one of the many thousands in the unlucky situation whereby you have a current mortgage deal that is about to expire and you are needing to remortgage in order to save yourself from a huge rise in repayments, you may have your work cut out.
Many of the today’s mortgage interest rates out there on the market now come with many strings attached. The days have gone when there was a choice of lenders who were willing to lend you far more than the value of the home you are buying, at least for now, anyway. Indeed, some of the best mortgages are only made to those homeowners who are luckyenough to be able to put down a good sized deposit – 25% in some cases. This means that if you are after the best products, which are usually the ones shown in comparison charts, you can only be borrowing three quarters of the value of the house you are buying.
Hopefully, for many people who are looking at remortgages that isn’t too much of a problem as their home’s value has probably increased in value a lot since they first bought it. But first time buyers and those who’s property hasn’t increased in value since purchase, might find themselves struggling for a mortgage offer.
Tie into this the woes that many building societiesare now not lending to people whom they previously would have happily leant to, and the thousands of products you are viewing in a mortgage table is significantly reduced.
But cutting through all of this red tape doesn’t need to be an awkward job for you. There are still plenty of mortgage brokers out there looking to make a living and they do that by offering their services for free and finding you the best mortgages possible. Although it maybe seems a good idea to trawl through mortgage tables, these days that can give you a lot of wrong answers. So get the experts to do the leg work for you!
When you are considering a new mortgage, there are a number of charges that lenders might not spell out as much as borrowers might like them to. They are always mentioned at some point and in the end may add up to quite a lot of cash. But remortage tables in their basic form wont spell them out. So when you are trying to a href=http://www.comparemortgagerates.co.uk/compare-mortgage-rates.php target=_blankcompare mortgage rates/a through online charts, dont forget to delve more deeply to see what hidden fees you might unearth.br /
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To understand what these fees are going to end up costing you, it is worth either asking an independent financial advisor for support or at the very least get a list of what the total repayments will be, including all charges.br /
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Heres what you might want to be looking out for when trawling through the mortgage tables in search of a href=http://www.comparemortgagerates.co.uk/ target=_blankmortgage interest rates/a.br /
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Exit Fees – if you do not continue the mortgage to the end of its term and instead complete it early then the bank may try to charge you an exit charge to cover their paperwork costs that are involved in ending the mortgage. This may even be charged at the end of the mortgage whether it is paid off early or not. Previously these have been low fees that dont really add up to much in comparison with the figures involved in a mortgage, but some lenders have hiked up these charges to try to make more money. This is taking advantage of the small print saying that charges can be raised and can result in incredible rises. br /
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Standard Variable Rate – this is the standard mortgage rate that the lender will charge you once your introductory period is up. It is usually about a couple of percentage points above the standard base rate. This is where the building societies make their cash through those customers that dont try to change mortgages when the introductory offer finishes. If you are on the standard variable rate and the tie in period has ended, then it is high time to look at those remortgage charts.br /
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Higher lending charge – passed are the days of the 125% mortgage, or at least until the building societies forget how badly they had their fingers burnt this time around. Most of the remortgage charts show the best buy deals and have various hoops to jump through, such as not lending more than 75% of your new homes value. If you are borrowing more than the cutoff, then the lender may charge you a higher lending charge.br /
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Early redemption fees – if you want to end your mortgage earlier than the offer or tie in period, there is usually an early redemption charge. This might be displayed as an amount of cash or so many months interest. Quite often after the tracker or fixed rate ends there is a tie in period during which you cannot change from the standard variable rate without incurring this early redemption charge.br /
If you are one of the many who may be about to apply for a mortgage, credit card, loan or any other form of credit, then you might have sensibly decided that it is time to a href=http://www.comparemortgagerates.co.uk/how-to-check-credit-reports.php target=_blankrequest a free credit report/a. With credit so difficult to come by at present, this certainly is a good and recommended move and could potentially avert the disaster of being turned down in error.br /
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But do you know a href=http://www.comparemortgagerates.co.uk/how-to-check-credit-reports.php target=_blankhow to check credit reports for free/a and realise it is very easy and free? If you have been refused an application for credit then the first step is to write to the credit reference agency that they used asking for a copy of your report. Then check the report and have any errors corrected.br /
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It is more recommended to do the check before applying for the credit – close the stable door before the horse bolts! Credit reference agencies permit you to check your report online and there are many companies about that will give you regular updates as things change on your report. Usually there is a free trial, or so much of the information is free, followed by a paid membership or payments for extra functions.br /
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If you need to check you report in advance of taking out credit, then the free trials are usually all that are required. Quite quickly you can have access to your credit information and see the information that the lenders will be looking at as part of their vetting calculation. Some reports will even give you an approximate indication of your credit status.br /
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On top of the report, the potential lender will also request your income, which the credit report will not show. This means that it is only an approximation, but it will show you any nasty surprises, such as payments that you forgot you had missed last year.br /
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Once you have looked at and studied your credit report, you might have found slight errors in the report. In this case you should write to the lender that provided the information and tell them to amend their records. Once they have done this, they will then update your credit report.br /
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It may also be possible that there are searches recorded on your credit report you do not relate to credit requests. These are recorded every time a potential lender views your report in order to decide whether to lend you money. If there are any of these are not familiar to you, it is worth checking them out. If there are many of these, or for large quantities of money, then be very careful with your checking as it can be a sign of identity theft.
Many homeowners are deciding they are struggling financially at the moment and with the crumpling state the housing market is in at present, new problems are rearing their heads that many people will not have previously worried about.br /
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With house prices crashing over the last couple of years and more falls set to follow, it is certain that there are a large number of people on the market for whom their house price is worth far less now than when the bought it a year or two ago. If you are one of these people and are not intending on selling your home, then you might think you are not affected, but how wrong can you be?br /
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If you have to sell your home and it is under the original buying price, then you could be in real trouble as you might find the mortgage isnt covered by the sales price. In this case, you really should speak to a good local financial advisor as soon as you can to find out what options could be open to you.br /
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But back now to those borrowers that are not planning to sell their properties and are happy to sit and wait for the housing market to recover. Here we can also include those that are likely to sell, but know that the house price is still covering the mortgage and allow for the fact that that with the price of their next house also falling, the bridge between the two houses is less.br /
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What is the problem for these people? Well many borrowers who bought a house at the peak of the house prices will have bought them with fixed mortgages. If you secured a 5-year mortgage, then you could possibly have a few more years before you need to worry. But if you secured a very low rate with, as goes together with the best rates, a short fixed term, you might be in need of a new mortgage very soon.br /
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Two years ago, some lenders were happy to lend 125% of the house value. This is not the case any more and many banks are punishing those borrowing more than 75% with higher interest rates. Even if you only borrowed 75% of the house s value when you bought it at its peak price, if it has lost 10% of the value so far, then your next mortgage now has to be for almost 85% of the houses value, even though you are not borrowing a penny extra.br /
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This difference is purely because the price of your property has fallen, nothing else. But if you borrowed 90% or more, then you could now be looking at an impossible 100% mortgage at best. Many lenders will now not touch you, even though they were probably clamouring for your business when you first bought your home.br /
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How can you get help? Well seeking good professional advice from a financial advisor is a lifeline. Get him to help you a href=http://www.comparemortgagerates.co.uk/ target=_blankcompare mortgage rates/a for those products that are open to you – get him just to show you the best rate that apply to your circumstances. If you a href=http://www.comparemortgagerates.co.uk/ target=_blankcompare top remortgage rates/a and none are affordable, then ask for alternative options from him. Extending the loan can be costly in the long term, but you may be able to move other finances around.br /
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Whatever you do, it is always worth starting to look early, rather than leaving it to the last minute. You can always swap to a better deal later, but if the search takes too long, you could be out of time if you keep putting off the dreaded deed.
With the utter turmoil of the current worldwide financial climate, finding difficult to come by. But many potential borrowers dont realise the importance of a href=http://www.comparemortgagerates.co.uk/how-to-check-credit-reports.php target=_blankwhy to check free credit reports/a from one of the major credit reference agencies.br /
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Without knowing it, your credit report might be showing information that may hinder your ability to take out more credit. Some of this may not even be down to you. Worse still, it may even uncover that you have been the victim of identity theft!br /
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Those people that have applied for credit and been rejected should definitely request their credit report data from at least one of the major credit reference agencies, such as Experian. If you have been declined credit, ask the lender who refused you which of the agencies they were using when they credit vetted you and their contact details. Then write to them requesting a copy of your credit file.br /
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It is a good idea to ask for a copy of your credit file before applying for more credit so that any errors, or omissions, can be amended before you apply. This could prevent a denial, which would also be recorded on your credit file and might count against you in future application.br /
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If you dont already know a href=http://www.comparemortgagerates.co.uk/how-to-check-credit-reports.php target=_blankhow to check a credit report/a for yourself, then it is very easy to do. The major credit reference agencies will offer a free service if you write to them and ask them for the details and there are many online services doing the same. As an early identity theft detection method, you can also join schemes whereby you are notified when certain changes are notedon your credit reference file. This would alert you to sudden huge loan applications if someone was trying to steal your identity.br /
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The free credit reports dont show you exactly how the lenders are going to score you, but they give you a good basis for seeing what they are likely to be using. In addition, lenders will also score you on other questions that they ask, such as your history with that lender, your annual household available income and other details they ask you to include.br /
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Your credit report wont include information for anyone else living within your house, but it will show details of who the credit reference agency assumes are financially related to you, for example husband or wife. If this information is wrong, then it can be worth getting it corrected.br /
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As an example, if your wife doesnt share the same surname as you, but has a better credit rating than you, then you can possibly improve your credit rating by identifying yourselves as being financially related.br /
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Conversely, if parent and non-dependent child, or others sharing a surname, live in the same house and arent financially related, it is worth checking that there isnt a financial relationship being reported, in case they have a worse credit rating.
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