Looking For A Remortgage Is Far More Complicated Today Than 12 Months Ago.
With the best mortgage interest rates currently falling so quickly, you may be wondering if now is the time to swap mortgages to see if you can get yourself a better mortgage, 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 tricky this has now become.
Frankly, no. It is now far from easy to find yourself a new mortgage deal. The lenders have reacted to the current credit crisis by making it far harder to obtain a remortgage and at the same time many of the building societies 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 banks have now taken away their easy going mortgagesand are instead making it much harder for potential customers to take out a remortgage. They are putting huge boundaries around their remortgage deals that potential borrowers have to be able to climb before they stand any chance of obtaining a new mortgage.
Aside from the fact that a lot of the lenders have increased the basic remortgage charges, making remortgage far more expensive just to take out, many have taken away deals that would appeal to the home buyers the building societies 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 borrowers that they are convinced will always be able to pay back their remortgage. 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 building societies of the 125% mortgage. Now you would be struggling to find a building society 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 property value has become extremely difficult.
So what can you do if you want to remortgage and find a new mortgage rate to save you some cash, and take a benefit from falling mortgage rates? Well you can compare mortage loan rates yourself and see what is about, but many of the rates on offer are only available for certain types of customers. 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 Appear A Good Idea, But Not For Everyone.
Mortgage completions 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 mortgage?
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 tie in periods, then it might be worth trying to compare mortage rates to find if there is a lower cost mortgage out there on the market.
There is also, sadly, another group of people for whom finding a remortgage 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 property 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 house prices, it is probably that you have lost quite a large chunk of what you paid for the house.
The problem here is that you could find that your current mortgage borrowing is too high for the building societies 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 house value has shot up to 100%. Many banks are now dubious about such high lendings, in a lot of cases punishing those who are borrowing more than 75%. So although your borrowing might have seemed OK to the lenders when you took out your current product, now they might not touch you with the proverbial barge pole.
And it’s not just those that have suffered house price drops that are in this difficult position. Until recently some lenders would actually lend up to 125% of the property’s market value. If you were in this position when you took out the product, unless your home value has risen by almost 40% or more, you would still be looking to borrow more than 90%. This would leave a lot of building societies 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 mortgage 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 loan rates and contact a local broker who may be able to assist you in finding a new mortgage product.
What Amount Could You Be Claiming Back In Excessive Bank Charges? Background To Reclaiming Bank Charges
Basically, you can reclaim unfair bank fees you have incurred within the previous 6 years. This includes unfair fees for being overdrawn, letters informing you about bounced cheques and failed direct debits and the likes. If the action probably only cost the bank a small amount and they have charged you a lot more, then there’s a chance of a claim. If these charges 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 claiming – the interest you would have been credited on the money had it been in your account.
But how will victims 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 flick 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 fees from there.
Finally, if all of these are not possible then you have to ask your bank. Asking for copies of back statements can prove quite costly (and these charges DO NOT count as unfair!!!). But if you know exact dates of charges, then this might be an alternative. But the normal way is to write to the bank, quoting the Data Protection Act 1998, asking 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 get back to you. 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 send you a copy of your statements they can try to charge you for that. So, take care 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 prevent that. Simply put, if the bank is warned that you will accept repayment now, or repayment plus costs if they don’t accept that, then there’s a financial incentive 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 decreasing in the falling economic climate. Choosing any particular type of mortgage does reduce the field of choices, but whatever you choose, you are taking a gamble.
Not one of us can say for certainty whether mortgage rates will hold fast, increase or decrease over the next year, let alone the next few years or the duration of your next mortgage. Whatever you choose 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 ensure 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 worry should still be in the back of your mind.
Worse still, some brokers might not even be willing to advise you on what mortgages 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 I have felt when I’ve been in that situation.
So if you are in the market for a mortgage and are about to set out on the long road of trying to compare best mortgage rates from everything that you find suitable, what exactly is this contract that you are agreeing to?
And it is just that – a contract. It’s a contract between you and the bank that they will lend you a large 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 reposess 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 receiving a few sounding the same, you know you should be getting a good answer there.
Unsecured loans can be the answer for anybody who is having issues managing their expenditure and does not have anything to offer as security for the loan.
Unsecured means that the loan does not depend on you owning property or other assets that the financial institution would foreclose on if you did not make payments. A mortgage is a form of a secured loan. A car loan would usually be unsecured.
More Risky for the bank, less risky for borrowers
Unsecured loans are more risky for the bank so the interest rates tend to be higher than for a secured loan. However, for the person taking out the loan it may be less risky because the mortgage company cannot foreclose your house if you do not repay. Besides, many people do not own property, or already have a mortgage and do not want to increase it.
Reduce the number of monthly outgoings.
A Unsecured debt consolidation loans is a loan that pays off all of your other debts so that you only have one payment to make each month. Most people find that they have many small debts on credit cards, store accounts, plus car loans, etc that they are paying each month. It can be difficulty to keep track of all the outgoings and you may miss a few, resulting in higher charges the next time.
Unsecured debt consolidation loans eliminates that so that you only have to remember to pay one bill. Another advantage may be that you could get a consolidation loan at a lower rate of interest than many of your other loans. Credit cards and store cards commonly have high interest and you can often do better if you take out financing to pay them all off.
Getting accepted.
Before you are approved for a loan, there are some forms that you will have to fill out. The mortgage company will want to know about your financial history, including your income and your monthly expenses. They will also look at your credit history.Generally if you have a regular paid job with a good salary you should be able to secure a loan. Even if your spending has been a little high, you should be able to cut back on your expenses to make the loan payments without too much difficulties. Bank are always looking for steady, regular people to lend money to. After all, that is what they are in business for.
If you are declined.
If you have a bad credit score you may be declined for an unsecured loan. You may even be declined with a good credit score, for no clear reason. Don’t give up. Just because one financial institution refuses you, does not mean that they all will. You may have to search around a little but there are plenty of mortgage companies that offer bad credit unsecured consolidation loans in certain circumstances.
Background To Reclaiming Bank Charges
Reclaiming Unfair Bank Charges has been in the news a lot recently and a lot of people are reported to be being very successful with reclaiming charges. But can you claim? Do you have to use a solicitor?
Are solicitors required to reclaim bank charges?
If your claim isn’t going to be involved then there’s probably no reason to get a solicitor involved when you are reclaiming your bank charges. At the very worst, most of the claim can be dealt with through the small claims courts and probably from your own home if the banks play ball.
But if your claim is complex or you know you just won’t bother reclaiming yourself without help, then the outlay is possibly worth it. But look for a no-win no-fee solicitor and check what their charges will be.
If you have been charged unfair charges, make sure you reclaim them from your bank.
Whether you go it alone or appoint a solicitor, or start off yourself and seek professional help if the bank uses delaying tactics on your case, remember that it is important to continue your claim. If you stop, lose interest or just forget to go to the next step, then the bank has won. If this is likely to be you, write down the steps in your diary or call a solicitor who advertises support for reclaiming bank fees.
In 2006 during a ruling that credit cards should charge no more then a £12 annual fee the Office of Fair Trading declared that certain bank charges were unlawful as well as being unfair. This produced the opportunity for people to reclaim unfair bank fees, charged within the previous 6 years.
A penalty clause is not permitted in British Law. This means that charges incurred for going overdrawn etc must be directly related to what it has cost the bank to deal with the situation. So if it costs £2.50 to send a computer generated letter, then the fees must not exceed £2.50.
Yet when customers go overdrawn in the past, banks have automatically sent customers a standard letter telling them they are overdrawn whilst imposing fees from £20 upwards. This is usually in addition to the interest charges imposed for unauthorised overdrafts or being overdrawn.
There are other unlawful bank fees and these are being successfully challenged by customers with banks refunding these unlawful charges. These unfair charges include:
• Returned Cheques
• Unpaid Cheque
• Account Misuse
• Fee For Exceeding Authorised Overdraft Limit
• Overdrafts
• Unarranged Borrowing
• Unpaid Standing Orders
• Unpaid Direct Debits
• Card Misuse
• Late Payment Of Credit Cards
• Late Payment Of Store Cards
• Late Payment Of Catalogue Purchases
If you have been trying to compare today’s mortgage rates in the current financial climate, you will be aware of just how tricky 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 mortgages that were available last year, many mortgages have fallen by the wayside without being replaced. There is far less option on the market and those that are out there are becoming increasingly trying to get hold of.
At the same time, many lenders are struggling to find the cash they need for themselves to be able to lend mortgages. Finding a mortgage is becoming increasingly more frustrating. And if you are one of the many thousands in the unlucky situation whereby you have a current mortgage deal that is about to end 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 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 property you are buying, at least for now, anyway. Instead, 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 home 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 lendersare now not lending to people whom they previously would have happily leant to, and the thousands of mortgages you are viewing in a product table is vastly 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 remortgage, 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 can eventually add up to quite a lot of cash. But mortgage tables in their basic form wont spell them out. So when you are trying to a href=http://www.comparemortgagerates.co.uk/index.php target=_blankcompare best mortgage rates/a through online charts, dont forget to delve more deeply to see what hidden charges 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 assistance or at the very least get a model of what the total repayments will be, including all charges.br /
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Heres some examples of 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/index.php target=_blankbest mortgage rates/a.br /
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Exit Fees – if you do not keep the mortgage to the end of its term and instead change it early then the lender may try to charge you an exit charge to cover their administration costs that are involved in completing 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 charges 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 fees 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 normally 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 remortgage when the introductory offer finishes. If you are on the standard variable rate and the tie in period is over, then it is high time to look at those mortgage charts.br /
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Higher lending charge – passed are the days of the 125% mortgage, or at least until the banks 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 borrowing more than 75% of your new propertys value. If you are borrowing more than the cutoff, then the building society 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 fee.br /
If you are about to apply for a loan, mortgage, credit card 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=_blankreview your 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 rejected 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 your credit reports/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 get 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 help you to check your report online and there are many companies about that will give you regular reports as things change on your credit file. Usually there is a free trial, or so much of the information is free, followed by a paid membership or payments for extra facilities.br /
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If you are just wanting to check you report in advance of taking out credit, then the free trials are usually sufficient. Quite quickly you can have access to your credit file and see the data that the lenders will be looking at as part of their vetting process. Some reports will even give you an approximate indication of your credit status.br /
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On top of the report, the future lender will also use 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 loans that you forgot you had missed last year.br /
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Once you have gained and checked your credit file 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 can also be possible that there are searches recorded on your credit report you do not recognise. These are recorded each time a potential lender requests your report in order to decide whether to lend you money. If some of these are not caused by 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 mortgage holders are finding 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 cared about.br /
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With house prices tumbling over the last couple of years and more falls in the future, 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 house, then you might think you are not affected, but how wrong can you be?br /
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If you are in need of selling your house and it is under the original buying price, then you could be in real problems as you might find the mortgage isnt covered by the sales price. In this case, you really have to speak to a good local financial advisor as soon as you can to discuss what options could be open to you.br /
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But back now to those mortgage holders 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 having to sell, but know that the house price is still covering the mortgage and realise 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 mortgage holders? Well many home owners 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 may have a few more years before you need to worry. But if you secured a very low rate with, as goes hand in hand 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 building societies were happy to lend 125% of the home 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 home 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 building societies will now not touch you, even though they were probably clamouring for your business when you first bought your house.br /
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What can you do? Well seeking good professional advice from a financial advisor is a good start. Get him to help you a href=http://www.comparemortgagerates.co.uk/ target=_blankcompare top 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 all 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.
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