Mortgage payment holidays could increase debt

Mortgage holders who take payment holidays could end up further in debt, finance website Fool.co.uk has warned. Head of personal finance at the website, David Kuo, warned that interest would continue to accrue even if a payment break is taken. Mr Kuo was responding to recent research by switching and comparison service uSwitch which showed that more than two million people are considering taking a payment holiday from their mortgages. According to uSwitch, this could make monthly repayments go £54 million higher and add £7.2 billion to total interest. "If you are taking this holiday for a month or a year, what you'll end up with is a bigger interest bill at the end of the period which will be added on to your loan so you'll end up paying for it eventually," he explained. He also warned that under the government's Homeowner Mortgage Support Scheme, aimed at people facing repossession, interest will still be accrued even though payment of it can be deferred. (source: http://www.mortgage.org.uk/fool-co-uk-mortgage-payment-holidays-could-increase-debt-18941678.html)

£591 billion wiped off UK property market

UK homes have lost more than £591 billion in value during 2008, the equivalent of every single British home dropping £22,083 since January, property website Zoopla found. The research suggested the value of homes decreased by nearly 10 per cent, leaving 2.1 million homeowners owing more on their mortgages than their homes are currently worth. It means the average homeowner has spent 85 per cent of their annual salary in 2008 simply offsetting the loss of their property's value. Alex Chesterman, CEO of Zoopla said: "This year will be remembered as the year that marked the acceleration of the housing market correction. "Values have been declining every month for the past 18 months and, with further job losses predicted, increased repossessions and the continued decline in the number of people buying and selling properties, the bottom is not yet in sight. "The reality is that some homeowners will face a very tough decision next year ­ whether to try and ride out further value declines and risk falling into further negative equity or cut their losses and sell before the price drops too far." Hertfordshire was identified as the hardest hit county in 2008 with the average house price dropping by £31,280 since January, followed by Essex at £29,377 and Middlesex £28,978. A recent survey by Knight Frank suggested the market for prime London property is in freefall, with prices now 14.1 per cent lower than last year. In June 1990, at the height of the last slump, the annual fall amounted to just 10.6 per cent. Over the past three months prices in London have fallen by 9.3 per cent, with houses depreciating at a faster rate than flats. (source: http://www.telegraph.co.uk/finance/economics/houseprices/3899791/591-billion-wiped-off-UK-property-market-in-12-months.html )

moneysupermarket.com

Review 8.2/10 20th June 2007 With over 8500 mortgages on the market it’s a tricky business finding the right one, so moneysupermaket.com is a comprehensive mortgage portal where you can get instant search results and compare the best mortgage deals. Their financial team will take all the troubles out of finding you the right mortgage. In the mortgages area you get 4 main options, the first 2 give you the chance to search through over 8500 different mortgages some of which you can apply for directly from this site. This includes specialist mortgages such as buy to let or first time buyer options so they pretty much have a mortgage option for anyone. The reason that this is covered by two options is one is a quick search and one is a far more detailed search. The 3rd option from here gives you the chance to fill out an online form submitting your details and an impartial financial advisor will call you back. The fourth and final option gives you the chance to call them, although this can only be done during office hours Monday to Friday. www.moneysupermarket.com/mortgages

Borrowers 'research mortgages online'

18th May 2007 A growing number of consumers are using the internet to research new mortgage deals, but reports suggest that these borrowers are not then making the final purchase online.Trends highlighted by Bradford and Bingley show that the internet is proving popular among people looking for information pertaining to mortgages but are not so enthusiastic about entering mortgage deals online.Andy Wiggans of Bradford and Bingley states that mortgages are perceived as too large a commitment to enter online, with most consumers preferring to speak with an advisor before purchase."There's endless amounts of data that suggests that people go and gather information," he stated."They still want to go and see the whites of somebody's eyes," he added, when asked of people are becoming more comfortable with the prospect of applying for mortgages online."It's big, it's confusing, you've got dozens and dozens and dozens of different product options and I think people just want to know that they're doing the right thing."Alliance and Leicester reports that many borrowers tend to get three quarters of the way through the online application process before calling instead, according to UK Personal Loan Store. Courtesy of © Adfero Ltd...

Abbey Five-times-salary Mortgage

12 March 2007 Review: 9/10 Abbey, Britain's second largest home loan provider, is offering borrowers five times their salary in order to help them get onto the property ladder. The bank is making the offer available to individuals or couples with a deposit of about 25% and an annual income of £60,000 or more. Abbey said it was reacting to surging house prices. But a leading credit counsellor warned that borrowing on this scale meant buyers could be "very stretched". An interest rate rise is also expected in the near future. A couple borrowing £250,000 would face repayments of about £1,400 a month - £17,000 a year. However, only borrowers with good credit ratings and low debt levels would qualify, Abbey said. "Our customers are continually asking for more money to purchase the house they want and subsequently we looked into the affordability ratings of certain people," said Abbey spokesman Dave Stewart. "We found that people could afford to pay out for bigger mortgages but there just wasn't anything on the market at the moment offering them what they needed." The current industry standard is for homebuyers to be offered mortgages of up to three-and-a-half times their salary. Analysts say Abbey's move is likely to encourage other lenders to follow suit, as they fight for the business of would-be homeowners. Last week, Bank of Ireland Mortgages and Bristol & West increased their standard salary multiple allowances from 4 to 4.5. The Bank of England is strongly tipped to raise interest rates by 0.25 percentage points to 5% next week. The chief executive of the Consumer Credit Counselling Service, Malcolm Hurlston, told the BBC that Abbey's announcement was risky news for borrowers. "For some people this is going to look like an answer to their prayers but it risks taking them into dangerous territory," he said. "If their salaries do not go up in the way they think, then they are going to be very stretched." However, Ray Boulger, senior technical manager at independent mortgage brokers John Charcol, said it was possible to get similar incremental loans from other lenders. "There is a responsibility on the borrower," he told BBC Radio Five Live. "There will be some who feel perfectly comfortable borrowing that amount of money because they have a lifestyle which means they can afford it. "However, there are others who prefer to spend more on luxuries and for who it is not suitable." www.abbey.com

Ocean Finance Mortgages

Review: 8.5/10 20th December 2006 Your mortgage is probably one of the largest financial commitments you will take on during your life time. At Ocean Mortgages we are dedicated to providing you with a mortgage that matches your needs whilst giving you an honest, fair and efficient service. Our mortgages are made available through major lenders and subsidiaries of high street banks. We are authorised and regulated by the Financial Services Authority for the provision of mortgage advice and arranging insurance. We will carry out all of the processing and legal work on your behalf in order to ensure that you start your new mortgage with the absolute minimum of disruption. Furthermore you will not be expected to pay any upfront fees for our services and we will not charge you any legal or valuation fees. You will be provided with a dedicated mortgage advisor who will be available for help and advice. All of our Mortgage Advisors hold the 'Certificate in Mortgage Advice and Practice' (CeMAP) qualification, so you can be sure you are dealing with a company who will endeavour to provide a first class service to you. http://www.oceanfinance.co.uk/mortgages/om01.asp

Regency ReMortgages

Review: 8.9/10 13 November 2006 A remortgage is the same as a mortgage except you are not buying a new house you are simply taking out a new mortgage to pay off your existing mortgage. Remortgaging can be used for a number of reasons; if you have mortgage arrears or bad debt a remortgage can release some of the equity in your property to pay off debts and in some cases you can actually borrow extra money to get your finances in order.Different lenders will have different procedures and rules when deciding what you can borrow for mortgage refinancing i.e. a remortgage. Regency’s friendly staff will be able to guide you through the process, By remortgaging your house, you could reduce monthly repayments; release a cash lump sum to help pay off existing debt or to treat yourself and your family to something you’ve been promising yourself for a long time.Remortgaging has become more and more popular as people realise they can switch to different types of mortgages to suit individual circumstances and also receive more competitive deals, possibly saving thousands of pounds in the process.Regency is a specialist broker with access to most mortgage products from a panel of lenders. Our expert mortgage advisors can take you through the different products available highlighting the benefits and pitfalls when you borrow for mortgage refinance. http://www.regency-remortgages.co.uk