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Get Instant online life insurance and protection quotes from up to 15 insurers now from Rightmortgageadvice.co.uk

Just a short post to announce that you can now get live online quotes direct from our main site for Life Insurance, income protection, Mortgage Protection and Critical Illness Insurance direct from the Rightmortgageadvice.co.uk website.

To get an instant quote today follow this link for Life Insurance Quotes.

If you have life insurance cover which was arranged prior to a marriage, or before increasing your mortgage value or mortgage term it may need to be reviewed. It’s crucial to ensure that your protection requirements are reviewed regularly to ensure that it is arranged in the most tax efficient manner and will benefit the people you intended it to.

To discuss protection requirements and products available call one of mortgage protection advisors on 03454594490 for advice.

Traditional Buy to Let mortgages not the only option for larger landlords

A recurring theme when speaking with buy to let investors across the country at the moment is the difficulty being caused by the dire lack of realistic products for remortgaging or making new purchases.

With current requirements for a minimum deposit of at least 25% and interest rates beginning around the 4% mark for variable rates with deposits of 40% and over its easy to see how many think the current markets offerings are nothing more than a cynical attempt to recoup wider losses by the big banks. And with arrangements fee’s going at anything up to 3.5% I have to agree with them.

There is however another option for Landlords who hold several properties or who have a sizeable income aside from their rental. The private banking sector is increasingly taking up a larger share of this market and with potential interest rates starting from 2.5% or so above base rate and fees typically between 1-2% of the loan balance they make a very attractive proposition to the right clientele.

These lenders not only have the experience in dealing with larger loan sizes and non standard properties, but the human underwriting to look at individual cases which would not meet the standard criteria of high street buy to let mortgage lenders.

The downside is that they typically require assets of around £250,000+ without taking your main residential property into account and or an income of over £100,000 per annum. So while they could prove invaluable for those landlords with a decent portfolio gearing with 25% or more in equity or for the first time investor with a good main income they won’t provide any refuge for the many landlords who worked at maximum leverage and left themselves with less than 25% equity in the their overall portfolio.

If you have several buy to let properties on or about to come onto their standard variable or indeed of you have a significant income instead and would like to find out whether a private banking arrangement could be suitable contact speak to one of our mortgage advisors on 0845 4594490 for independent mortgage advice.

Woolwich announce new low fee fixed rate products up to 75% loan to value

The Woolwich announced several new fixed rate products yesterday which herald the return of low fee sensible rate mortgage products to the market at what will surely prove to a pivotal moment in the UK’s turn from recession to recovery.

The rates which include a 2 Year fixed at 3.89% available up to 70% loan to value and at 4.09% up to 75% loan to value have an application fee of just £199 with free valuation and legal work on remortgages or £200 cash back towards legal costs if using your own solicitors. Early repayment charges apply of 3% of loan to be paid until 31/01/2012, and APR for the products is 2.8% On both.

They have also included a 3 year fixed product at a similarly competitive rate.

This is a big departure from the glut of products currently offering headline rates with either £995 or even 2% arrangement fee’s and will surely serve to kickstart the lending industry back into competitive pricing with more than just on paper rate cuts.

The products are also available on new purchases and equally competitive there although the lenders standard valuation and legal fee’s will apply on purchases.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice although you do have the option to pay up to 1.5% of the loan amount. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

High time APR or Annual Percentage Rate interest calculations were removed from mortgage products

One of the most bewildering and confusing items on any mortgage illustration from my point of view must be the Annual Percentage Rate or APR listed on a product. APR was developed to give a comparative measure between various loans to show the overall cost of the borrowing on an annual basis taking into account a much broader range of fees and charges than the loan interest on its own.

Now that’s a good thing where the calculation makes sense, but on mortgage products in its current guise it makes no sense at all.

A simple look at the best buy tables on our website will show you that a product far cheaper during its initial interest rate term may have a much higher APR than a product with a considerably higher rate of interest. The issue is that APR is calculated over the lifetime of the loan and so will also consider the reversion rate of the product after its initial term.

There are several reasons why this is misleading;

  1. 1. Reversion rates are generally variable and not linked directly to bank base rate. In two years time a lender with a previously un-competitive reversion rate may well be leading the market and vice versa – hence it is not a factor that should play a major part in the decision making process.
  2. 2. You would generally regularly remortgage during the early years of your mortgage repayment to ensure a competitive rate of interest so including the reversion rate after the initial mortgage term distorts the picture.
  3. 3. Clever design can skew the figure. Lifetime trackers appear very competitive because they have no reversion rate, and refunding upfront fee’s affects the calculation but could cost a pretty penny if the loan never goes ahead.

APR is a system that was never really designed for mortgage contracts but has become a legal obligation when advertising them due to the confused dual regulatory system between the FSA and the Office of Fair Trading, it makes some sense on unsecured loans and very little in the mortgage market.

It is high time this dual regulation was removed and APR calculations either scrapped on mortgage contracts or replaced with something far more specific to the complex nature a mortgage product.

Why the rate loading Mr Lender?

When a mortgage broker arranges a mortgage for a borrower the commission they receive (if they take the commission as opposed to a fee) is not standardised but there is however only a limited difference from lender to lender. Typically the percentage is about 0.3 to 0.35% for a residential mortgage with good credit, 0.40 to 0.45% for buy to let mortgages, and slightly higher for adverse credit applications.

Why then are several banks, one of which I won’t name but is almost entirely government owned (guess who?) is loading rates available via intermediaries by anything up to 1% against an equivalent product available through them direct? If these lenders are proposing that it costs them more to accept intermediary applications this is farcical.

They may argue that the intermediary market would simply direct too much business to them which they don’t have funds to supply. This is plausible but I think it is actually pricing intermediary products out of the market to attract business from consumers direct who can then be goat herded into higher rate products with down valuations and clandestine credit scoring, or even lower rate products with ridiculous fee’s which are more expensive in reality. Without a broker to argue the case and guide on fee’s most people will simply accept being cascaded to a higher rate without asking difficult questions, or being declined an application having paid for valuations and the like.

I want someone to actually put the question to these banks, how is this rate loading fair practice and why is it in place? Because to the educated it seems to be the intention to get mortgage advisors out of the market so that dodgy products can once again be sold in bulk. Just look at the return of long early repayment charges on market leading rates as a sign that lenders are looking for ways to lock customers into potentially crippling mortgage rates.

Nationwide house price index shows year on year growth level

The Nationwide has just released it’s latest house price indices figures today which show for the first time since the beginning of the credit crunch that year on year house price inflation is now static at 0.0% change from September 2008.

This indicates the average house has now recovered losses since this time last year as prices continues to rise month on month. Monthly change is down slightly at 0.9% from 1.4% in August. It leaves the average drop since the 2007 peak at 13.5% which is some way off the 40% drops expected by pundits until quite recently.

The news comes in a week where lenders have continued to announce reductions in interest rates on products up to 75% loan to value with the Nationwide themselves releasing a raft of new rates yesterday, of which there were too many for me to go into detail but more news will be this week.

Alliance & Leicester reduce 2 Year Fixed rates

A&L have announced further rate reductions yesterday on their 75% loan to value 2 year fixed rates for new purchases. The new product with a £995 fee and fixed rate of 4.53% sits alongside their 4.48% product with a 1% arrangement fee.

The new rate brings them once again into line with rates from the Abbey however the product will be of potential benefit to those who have recently gone self employed or started a business as A&L require only 1 Years accounts minimum against 2 from the Abbey. It also has a free valuation much like Abbeys three year fix at the same rate.

The move continues the trend of lenders moving their products down to a similar baseline but with no one currently undercutting the market significantly unlike what we have seen with variable rates from HSBC and the Woolwich although swap rates have not dropped in the same fashion as 3 month LIBOR which fuelled the reduction in variable rates.

The new rates have an APR of 5.1% and reversion rate currently stands at 4.99%. Early repayment charges are 3% of loan to be paid until 31/12/2011 and lenders Conveyancing fee is typically £189.

Always consult the Key Facts Illustration prior to making a decision on a mortgage product and seek independent advice. To speak to a mortgage advisor call 0845 4594490.

House Price rises driven by larger properties

Findaproperty.com’s new house price index suggests that house prices have remained stagnant at the bottom end of the market while strong rises in higher value properties are propping up the major indices.

Their figures collated from average asking prices on the website over the past month show high value properties climbing at 6.6% annually against a monthly rise of o.3% for first time buyer properties leaving them still down -4.6% year on year. This would appear to suggest that the difficult lending conditions for first time buyers are continuing to drag down property prices as second times buyers struggle to find a purchaser who can afford their property in the current market.

However there is good news in the bag too with average first time buyer affordability improving dramatically fuelled by the price reduction. Their figures for affordability gap or the average deposit required show a drop to £55,700 or 1.74 times gross household income against £71,000 or 2.8 times gross household income in January 2008.

Overall the indices showed a 0.2% rise on August figures leaving the average national asking price at £218,134.

Alliance & Leicester reduce 3 year fixed remortgage rates

Alliance & Leicester have announced a reduction to 4.88% for their 3 year fixed rates up to 70% loan to value with either a 1% or £995 arrangement fee. The rate then reverts to 4.99% currently giving an APR of 5.2%.

Valuation fee’s are refunded on completion up to a property value of £1 Million and would be £280 based on borrowing of £100k at 70% LTV. Applicable fee’s are lenders Conveyancing fee of £189, Telegraphic transfer fee of £30 and early repayment charges of 3% of loan to be paid until 30/11/2012.

Whilst this brings them into line with offerings from Abbey it is still some .4% off the current products on offer from the Woolwich.

As usual always consult a Key Facts Illustration before making a decision about a mortgage. For further information on this product or any others please contact us on 0845 4594490 to speak to a mortgage broker.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice although you do have the option to pay up to 1.5% of the loan amount. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

Woolwich announce their lowest ever flexible mortgage rate

The Woolwich have announced a new tracker at 1.48% above base rate for the first year then reverting to 2.49% above base rate for life giving their lowest ever headline mortgage rate of 1.98% currently. The product has a minimum loan of £200,000 and maximum of £500,000 so it is quite restrictive, early repayment charges are 2% until the 31/01/2013 meaning it does tie you into the rate for some time as well.

The product has a £999 arrangement fee, and based on a loan of £200,000 at 60% a valuation fee of £415, lender Conveyancing fee of £126, land registry fee of £280 and completion fee of £35 while APR is 3.0%.

The biggest caveat to this product is that the option to switch to a Woolwich fixed rate without penalty during the early repayment charge period which Woolwich call “drop lock” does NOT apply to this product, so while its headline rate may be very tempting if there are significant rises in interest rates particularly in the second and subsequent years of the mortgage it could become very costly indeed particularly as early repayment charges on a minimum loan of 200K would amount to four thousand pounds as well!

For this reason I would thoroughly recommend speaking to a mortgage advisor or seeking mortgage advice about the suitability of this product if it has your interest, and as usual read the Key Facts Illustration prior to making any decision on a mortgage product.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. There may be a fee for mortgage advice. The amount will depend upon your circumstances but it is typically £200 or up to a maximum of 1.5% of the loan value. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. WE TYPICALLY CHARGE AN ADVICE FEE OF £299 PAID UPON FULL MORTGAGE OFFER. SOME BUY TO LET AND COMMERCIAL LOANS ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY
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