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Many mortgage deals are available but only for those with a large deposit
Many mortgage deals are available but only for those with a large deposit
We are currently seeing a mortgage drought and in October there was a crackdown of lending, which is only going to hamper any improvement in the deals available.
Tarporley,
Cheshire,
United Kingdom
(prbd.net)
04/01/2013
We are currently seeing a mortgage drought and in October there was a crackdown of lending, which is only going to hamper any improvement in the deals available.
The mortgage regulator has said that they will clamp down on interest only loans, which will make it more difficult for older customers who's mortgage term is about to end and they cannot make up the shortfall. However for those with equity, there are some attractive rates available.
In addition for aspiring homeowners, there are some amazing deals available but unfortunately these are only available to those who meet the lender's criteria and this includes producing a large deposit to put down on the property.
For those with a large amount of equity or a big deposit who can put down 40% or more, there are some amazing deals available including 1.99% with Tesco for a two year fixed term enabling people to save up to £300 on a £150,000 mortgage. There are also longer term fixed rates of around 2.99% for those with a 40% deposit from Yorkshire Building Society However, if you only have a 5% deposit or equity, the rate shoots up to 5.99%.
The lowest available deal on a two-year tracker basis is from ING Direct (this will be Barclays in the near future) and the rate is set at 1.89% above the base rate. Tesco are offering the best deal on the market at present.
Because many people were encouraged to take out loans that they couldn't repay from 2005 to 2011, banks are now trying to avoid a repeat of this happening again and so are making sure that borrowers meet increasingly their strict criteria to qualify for any mortgage, whatever the deposit they have. This is to stop people from overstretching themselves and taking on debts that they won't be able to repay.
The rules that were announced in October will come into force during April 2014. This means that lenders will make tougher checks to ensure borrowers have enough income to cover their outgoings, including mortgage repayments. They will have to provide proof of income, details of their day-to-day spending so that they pass a very stringent affordability test. The lending offered will also have to pass a stress test to show that repayments are still going to be affordable under different circumstances and interest only loans will only be available to those who have a good strategy to repay the loan.
Any new lending must also pass a stress-test to show the mortgage repayments are still affordable if interest rates rise in the future. Interest-only loans will not be banned, but they will be allowed only if a borrower can prove they have a 'credible strategy' to repay the loan. These checks mean that long-term, fewer mortgages will be approved.
Susan Alexander is a property mentor, who specialises in property investment coaching and mentoring, buy to let advice and helping property investors build a successful property portfolio. She offers property investment mentoring and coaching advice She says:
"If you are lucky enough to be in a position to get a fixed term deal, then there remain some attractive rates out there to lock into, but generally such deals require a large deposit or substantial equity in a home already owned, but if you have such funds available to you and you are looking to trim costs then the opportunities are available."
Notes to Editors
So many people think they can invest in property themselves and feel that they don't need additional advice. Consider most of the worlds most successful people, they fast track to where they want to go by getting a coach or mentor To find out how property investment coaching can help you achieve your goals click here. To find out more about Susan Alexander Coaching and to get offers property investment mentoring and coaching advice click here
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So many people think they can invest in property themselves and feel that they don’t need additional advice.
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