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Halifax increase new build loan to values

Contact A Mortgage NowHalifax issued a press release today stating they are increasing maximum loan to value on New Build houses to 90%

What does this mean for you as a Borrower?

If you are applying for a mortgage as a first time home buyer with a low deposit you will often be asked if you are buying a New Build property. (A new build in Mortgage Lender parlance is a property that has not been lived in before, typically sold direct to the applicant by the Builder or Developer.)

Why is it important to you and your Mortgage Broker if the property is ‘New Build’?

Lenders have differing attitudes to lending on New Build properties as opposed to older homes, particularly in respect of deposit size. Lenders will ask for a higher deposit on a ‘New Build’ than on an equivalent deal with a ‘pre-occupied property’. This caution stems from the practice of Developers selling new properties at a premium price which cannot always be realised in the event of a swift resale. Lenders will look to reduce their risk by asking the client to invest a little more cash into the deal.

Why are Halifax taking this action now?

Firstly, this may be an indication that Colleys (the surveying arm of HBOS) believe that prices on New Build properties are becoming a little more realistic.

It may also be in preparation to benefit from the Government’s New Build Indemnity Scheme programme which is also advantageous to the Lender.

More about New Build Properties and Mortgage Lending

Use an Independent Mortgage Broker when purchasing a New Build property as complications with Mortgage Lending will be encountered – for example:

Flats – maximum loan to value on New Build flats can be lower than on houses, meaning you need a higher deposit

Builder’s Incentives – Incentives provided by the Builder such as deposits and stamp duty paid are not always acceptable to Lenders.

Exposure – Lenders will limit the amount of exposure they have on a particular development or apartment building, and this can sometimes exclude Lenders for the Borrower.

If you need a Mortgage on a new Build Property – contact us now.

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New Build Indemnity Scheme

Contact A Mortgage NowThe New Build Indemnity Scheme is designed to improve conditions for first time buyers in the mortgage lender market by offering additional security and guarantees to the Mortgage Lender without impacting on the client’s position.

How the New Build Indemnity Scheme works

In simple terms, the Developer/Builder will contribute cash funds in the order of 3.5% of the value of the property into a fund designed to protect the Lender’s position in the event of default by the Borrower.  The fund will be held for seven years and interest will be payable on it.  At the end of this period funds will be returned to the Developer less a portion of any credit losses incurred during the period.  Funds will be pooled so that the Lender can draw on them to meet losses on any properties sold by the Developer under the scheme.

The new Build Indemnity Scheme will be available on both flats and houses. There will be no compulsion for the Developer to join the scheme and both Lenders and Developers will decide who they wish to work with.

The scheme is designed for owner occupiers and not investors and will therefore not be available on the buy to let market.

New Build Indemnity Scheme Important points

The fund does not protect you as the Borrower in any way as your own liability will be exactly the same as in any other mortgage.

The party getting the real benefit is the Lender whose losses can be protected at up to 95% of their value by the fund. Although the FSA will expect the Lender not to compromise their standard underwriting requirements, this protection can obviously be expected to affect their decision making as to the benefits of competing in this area of the mortgage market.

You as the Borrower

The New Build Indemnity Scheme can be expected to make funds more accessible for Borrowers on New Build property, with perhaps a little more competition leading to better Mortgage rates.

If you require a mortgage for a New Build property – contact us now.

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Nationwide low deposit mortgages 1st February 2012

Contact A Mortgage NowTomorrow (1st February 2012) sees the launch of Nationwide Building Society’s TV advertising campaign to promote it’s Nationwide low deposit mortgages for first time buyers.

Nationwide is a strong lender for the first time buyer market and we often use them for our clients due to their competitive rates and sensible underwriting.

With so much press talk about the difficulties first time buyers have in generating mortgage deposits, this launch will provide a welcome patch of sunshine in generally grey skies.

Currently Nationwide products require a minimum 10% deposit (unless the applicant is an existing client), and there are Lenders offering 5% deposit mortgages.

However the Nationwide mortgage rates are competitive for first time buyers at 5.29% fixed and, since credit scoring in the ultra low deposit mortgage market is particularly tough, Nationwide Building Society should provide a good source of lending for first time buyers in the first half of 2012.

If you require a first time buyer, low deposit mortgage, from Nationwide, or any other Lender – contact us now.

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Have you concerns about bad credit and arranging a mortgage?

Contact A Mortgage NowToday we have added a new bad credit mortgage page to our amortgagenow website with comprehensive details of credit problems and how they affect your ability to secure a mortgage.

We feature a coloured banding system to enable you to assess how your credit record may fair and how you are likely to be viewed by mortgage lenders in today’s market.

Our independent mortgage brokers are waiting to assist you with your bad credit mortgage.

If you need help with your mortgage – contact us now.

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If you are considering investment in property and you have decided that you want to buy to let  a residential property, then you should keep a few things in mind.

Contact A Mortgage NowPurchasing an investment property is something that doesn’t come without risk, yet with a few key points to guide you on your way, you can improve your chances of buying profitably.

Below are nine tips to help you make key decisions on investment in property.

1. Location

If  you have rented a home at least once in your life you will appreciate the importance of location. Quite simply, properties located in the more central areas cost more  to rent.  You will need to do some research before you buy a property, in order to establish the ‘quality’ of the area.

If you find a situation where you can buy a ‘cheap property’ that is not located in prime area, you should think twice. There is no value in owning a nice property in an area few people ever want to consider for their home.

2. Rental history

Before you buy a property you should check out the rental history on it. This will tell you the amount of rent former landlords have charged and  give you an idea of the profit potential of your prospective investment property.

In addition, check the amount of time that the property was rented for – importantly, be on the lookout for high tenant turnover. In the majority of cases this will indicate there is a problem with either the location, or the property itself.

3. Amount of listings in the area

Walking through the area where you intend to buy your new investment property, or perhaps just checking the internet will give you a view of the number of rental properties that are listed locally. See how quickly properties turn from ‘available’ to ‘let’ and you will have a good idea of demand.

4. Schools

Family tenants will initially take a look at the schools that can be found close to your investment property. This is one of the main reasons why they would want to rent a home in that area.

Before you buy an investment property check the available schools in  the area and their performance standards. The higher the local schools are classified, the more likely it is people will want to rent your property.

5. Proximity to amenities

Most people who want to rent will be interested in local the proximity of amenities. Having a property that’s near to the supermarket, to a big shopping centre, a cinema, bank, post office and so on will grant you higher chances of finding tenants for it. There are also many individuals who will want to have access to leisure facilities like gyms, swimming pools, and clubs , so be sure you take these into consideration as well.

6. Crime

Look for a low crime area – statistics are available on line. If the area you are targeting is known for crime, few will want to rent there and the rent you can expect will be very low.

7. Job opportunities

People want properties convenient for their workplace. Many will want to relocate nearer to their workplace, as commuting not only takes time, but also costs money and stress.

Choose an investment property that is easily commutable to the town centre, or major employers such as hospitals and colleges, but far enough away so that people will not have to deal with problems like pollution or a crowded traffic.

8. Size of the property
Contact A Mortgage NowThis is a major consideration. When people look for a place to rent, one of the main factors that will attract them is the space of the property. If your investment property is good for young families with at least two bedrooms, you have an advantage.

A property with two bedrooms and two bathrooms is a suitable investment for those seeking young Professionals who are likely to share.

9. Age of the property

When you buy an investment property consider one that is not older than ten years. This will exempt you from many dangers and costs when it comes to building maintenance. You will be the one having to fix the problems for the tenant, so a good choice will keep your costs down.

In summary

Putting yourself in your tenant’s shoes is the best way to judge the right property for you. Personal taste is irrelevant – this is a business transaction.

Whatever you decide – we wish you well. If you require a mortgage for an investment property – contact us now.

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Contact A Mortgage NowBuy to Let mortgages will receive a boost due to extra funding announced by specialist buy to let mortgage lender Platform this month.

Platform is part of Co-Operative Bank, it’s specific role is to handle buy to let mortgage lending through mortgage brokers.

Platform advanced £450 million in 2011. As as indication of their confidence in the buy to let mortgage market they intend to increase lending by one third to £600 million in 2012. This is good news for buy to let investors as Platform are one of the leaders in this area of the mortgage market.

Rates from Platform tend to be competitive (buy to let rates start at 3.29% as of this morning), and underwriting criteria is also fairly well thought through. Features include free standard valuation on many products.

If you have a requirement for a buy to let mortgage – contact us now.

For more information on buy to let mortgage lending see our video below

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Self-Build mortgage demand to grow in the next few years

Figures from Datamonitor, a world-leading provider of premium global business information, predict a 141% growth in self build mortgage lending in the UK in the next three years.

Contact A Mortgage NowThis would take a market currently worth 790m to nearly 2 billion by 2015. This growth is expected due to Government initiatives in the housing market, particularly the easing of planning rules.

In a flat housing market, any growth is to be welcomed, and self- build is an interesting area covering new constructions, and renovations or conversions.

This market appeals to the more adventurous purchaser, offering the potential to secure a high value property for relatively modest investment.

The option to ‘design your own home’ is clearly an attractive one and is common in many other countries in Europe, Australasia, and North America.

Self-Build potential in the UK is hampered by the lack of mortgage lending available – there are very few Self-Build Lenders among the UK Banks and Building Societies. This is likely to change as market demand grows – smaller Lenders in particular are always looking for niche areas in which to operate without having to complete with the major banking institutions.

How a Self-Build mortgage works

A self-build mortgage lender will typically provide funds for acquisition of the land to be built on, or property to be refurbished or converted. Further funds are then released in stages to help fund the building work.

You should expect to purchase with planning permission in place in order to make the property suitable security for the Lender.

Lenders will need to see plans and costings, which should include the expected final value of the completed project – it is this figure that the Lender will use to assess maximum lending.

As a borrower you should expect to have your own funds to act as deposit and assist with build costs – a minimum of 25% of the acquisition price in the first instance.

Do not expect the pay rate on your Self-Build mortgage to match the more competitive mainstream mortgage market. There is considerable extra cost and risk for the Lender and that is reflected in the mortgage pricing.

Self-Build Planning

Make sure you budget correctly and allow for contingencies. If you run short of funds, additional lending is not always possible. Similarly, allow enough time for the build, and measure out your cash-flow carefully. If you do not have building experience, consider using a project manager as it could save you money and stress.

Lenders will tend to advance money in stages so make sure you have enough cash to cover each period. Some Lender will advance funds ‘in advance’ of each stage, and this can be advantageous.

Arranging a Self-Build mortgage

If you need a mortgage for a self-build project do not waste time on comparison websites or approaching Lenders direct. You need the assistance of an Independent Mortgage Broker, and one that is used to handling Self-Build cases. You can expect that the broker will charge you a fee as there is considerably more work involved for the Mortgage Broker in a Self-Build mortgage than in a standard mortgage case.

For more help or information on Self-Build Mortgages – contact us now.

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Cancer, Stroke, and Heart Attack: Critical Illnesses in the Western World

Contact A Mortgage NowIn the second half of the twentieth century, there was a change of lifestyle in the western world of the sort that had never been undergone before in human history. Some of these changes may have led to increases in the numbers of critical illness we see today, especially cases of cancer, stroke, and heart attack.

Diets had changed drastically by the 1970s; people began eating more animal products and taking in more sugar and fat. They also consumed higher levels of alcohol than they had earlier in the century.

Additionally, people changed their behaviours. As modern technology made many daily activities easier, people became more sedentary. This was exacerbated by the popularity of inactive entertainment, like television and video games. Smoking, although it would decline in the second half of the century, continued to be practiced by about 20% of the population near the end of the century (and still today).

All of these factors that are part of the western lifestyle are now contributing to the incidence of critical illness in our society. It is thought that lifestyle may play a role in each of the three leading causes of death in the western world: heart attack, cancer, and stroke.

Heart Attack

Heart attack is the leading cause of death in men and women throughout the world. A heart attack occurs when blood is blocked from reaching the heart, causing damage to the heart and an interruption of oxygen supply. There are a number of symptoms that signal the onset of a heart attack, the hallmark sign being chest pain that radiates into the left arm or neck. There are also many risk factors that are thought to contribute to the risk of heart attack, such as age, gender (male), high blood pressure, smoking, diabetes, and obesity. The western lifestyle particularly has contributed to the incidence of heart attacks by increasing the amount of fat and animal products consumed, which contributes to weight gain, hypertension, and diabetes.

In addition to the risk of death that a heart attack carries, it also can lead to a prolonged period of disability. In many cases, the disability occurs because after one heart attack, and individual is at an increased susceptibility of having another. Thus, many of the lifestyle factors that may have contributed to the heart attack: stress, hypertension, anxiety, etc., must now be managed and contained. Since work may be a situation that raises blood pressure or stress levels, it may have to be avoided. Therefore, individuals without critical illness insurance who have a heart attack may find themselves struggling to provide an income to pay their medical bills.

Cancer

Cancer is the second-leading cause of death in the UK and the leading cause in the developed world. The term cancer actually refers to a collection of diseases, which can affect a number of different organs, but all of which involve unregulated cell growth. This leads to the formation of tumors, or abnormal growths in the body, that begin to interfere with vital functions if unchecked. Some of the common cancers in the western world include: lung cancer, prostate cancer, breast cancer, and colon cancer.

There are many potential causes of cancer, and the root cause will differ depending on the type of cancer that develops. Lifestyle is thought to play a large role, however, in the development of cancer. Perhaps the best example of this can be seen with the sharp rise in lung cancer rates that occurred in the 1970s and 1980s, which is thought to be due to drastically increased levels of smoking in the decades prior. Other lifestyle factors that are thought to increase one’s risk of cancer include diet, alcohol, obesity, lack of exercise, excessive sun, and exposure to toxins and chemicals. Specifically, diets high in red meat and low in fruits and vegetables are thought to increase cancer risk.

A battle with cancer can be physically debilitating. Treatment also can last a long period of time and include methods like chemotherapy, which bring with it side effects including severe nausea, fatigue, and immune system depression. These serious side effects can make working difficult, if not impossible. Most who find themselves in a struggle against cancer will need to have the ability to rest and recover during their most intense treatment periods.

Stroke

Stroke is the third leading cause of death in the United States and causes 10% of deaths across the world. A stroke occurs when the blood supply to the brain is disrupted, which causes damage to the brain. The risk factors for stroke are similar to those of heart attacks, and include: age, hypertension, diabetes, and smoking. Thus, many of the aspects of the western lifestyle that may increase a risk of heart attack also can increase the risk of stroke.

A stroke carries with it the risk of death, but a stroke also can result in long-term neurological damage. Stroke is the primary cause of disability in the United States and Europe. Stroke survivors may have difficulty performing any number of daily functions after their stroke, including speech or simple motor tasks. Recovery often involves long-term physical therapy. In addition, after a stroke there is an increased risk of future cerebrovascular accidents. Thus, care must be taken to avoid some of the risk factors that might foster any sort of cardiovascular disease.

Critical Illness

Heart attack, cancer, and stroke are the three leading causes of death throughout most of the world. As medical technology has improved, our ability to live longer has allowed lifestyle diseases to have more of an effect on our lifespan. While it is essential to be aware of the risk factors for these diseases, planning for the future is also critical. Many people try to practice a healthy lifestyle to avoid a heart attack or cancer, but they do not invest in critical illness insurance to provide for the possibility that such an unfortunate event occurs. Yet, planning for the unexpected may be just as important as changing your lifestyle. Medical science may help you to survive a heart attack, cancer, or stroke, but it will still expect you to pay the bill for your treatment.

Fortunately it is possible to insurance yourself against these conditions as well as a number of other critical illnesses. Critical Illness Insurance will remove the financial worries of serious illness and therefore also aid your recovery.

To find out more call us on 08456 44 0950/60

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Fixed rate mortgage and piece of mind

In the past, clients were not keen on fixed rate mortgage options for their mortgage lending as it was almost always the most expensive option. With higher interest rates than flexible mortgages, many people overlooked the security that fixed mortgage rates could bring.

Contact A Mortgage NowWith the advent of the financial crisis in the eurozone, mortgage rates are being affected world wide and this includes in the UK. Although Britain opted, quite sensibly to stay away from indulging in the single currency, the funding sources for the housing market are in turmoil all the same.

Rising mortgage rates

Mortgage rates have already started to rise in the UK as a direct result of the financial uncertainty that is dominating the Euro Zone, and the changes are most significant for first time borrowers. The reality is that with the mortgage lenders so risk adverse, and mortgage rates on the increase, it is becoming extremely difficult to step onto even the first rung of the housing market in Britain today.

The rise in the rates of interest on mortgages is directly linked to the rise in the Euribor, and more precisely when talking about the selected UK high street banks and lenders, the Libor. This figure is the inter bank offered rate at which banks are willing to lend to each other, and the amount has been inching steadily higher amid fears around the Euro crisis.

Bank lending

Banks have lost the confidence to lend to each other, and it is the customer of the libor linked tracker rate mortgage who is directly affected by decisions made by the money lenders. Monthly repayments on libor tracker mortgages rise each time the Libor rises, but does not effect those who have secured a fixed rate mortgage.

How will you cope with a higher mortgage rate?

Even a small rise in underlying market rates could push your monthly mortgage repayment to a level that you can no longer afford; as a result, fixed rate mortgages are being favoured, especially by new buyers and those remortgaging. Although the fixed rate on new your mortgage may well appear to be high when you first apply, you can sleep well at night with the knowledge that any changes in the lending markets will not affect your mortgage repayments.

Fixed rate for safety

In times of such crisis and financial uncertainty that not just Britain or Europe, but the whole world is finding itself in, a fixed rate mortgage is by the safest way of investing in property. Although this type of lending facility lacks the flexibility of mortgage holidays and early pay back that you can enjoy with other schemes, in times of such turmoil, the fixed rate method is becoming more and more popular.

If you do indeed opt, or have opted already for a libor tracker rate facility, you will see just how the Libor will be affecting the amount that you pay each month. Through times of low interest rates, the customer may have found a tracker mortgage product very advantageous, but these advantageous times are now being quickly replaced by turmoil and uncertainty.

With the Libor free to rise more, the crisis in the Euro zone will have an even more disastrous affect on the average persons’ mortgage plan, and with recession not just affecting the Euro Zone, but Britain too, many home owners who find themselves in a precarious financial situation. Even those not under threat of immediate job losses, are living every day with the possibility of losing their home if underlying mortgage rates rise too much, too quickly.

for a mortgage offer in principle – contact us now.

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