AToM Mortgage Blog

AToM win mortgage industry 'Oscar'

noreply@blogger.com (Dale Jannels) — Fri, 05 Mar 2010 16:04:00 +0000

AToM attended the Mortgage Strategy annual awards ceremony at the Grosvenor House Hotel in Park Lane last week. These awards are the ‘Oscars’ of the mortgage world and an opportunity for those who have managed to survive the incredibly tough climate in the mortgage market, to meet and be recognised. I was aware that AToM had been short-listed but was pleasantly shocked to hear the host, Alun Cochrane (8 out of 10 Cats) announce to the 650 attendees, that the award for “Best Specialist Distributor 2010” goes to…….. AToM! Wow! Two major industry awards in the same week with the latter being the big one! Superb news and really well deserved by all the team at AToM.

Coming back down to earth with a bump, other news this week reveals lenders look like they are starting to enter into price wars. BMSolutions (part of Lloyds Banking Group) recently reduced their Buy to Let rates and, only a few days later, The Mortgage Works (Nationwide) also reduced theirs. These two lenders probably write the majority of Buy to Let mortgages currently and, with both owned by larger organisations, this shows that their appetite in the investment property arena is warming up. Without doubt, there is a huge rental market out there and this is enhanced as more first time buyers struggle to raise deposits to purchase their first properties. With no other options, renting becomes their priority whilst trying to save deposits.

With this in mind, the Council of Mortgage Lenders this week released a report indicating that 80% of all under 30 year olds now need financial help from parents or relatives to make that first step on to the property ladder. With today’s first time buyer needing around £34k deposit, which also tends to be the average annual household income, there seems to be no end in sight for the first time buyer and their ambition to get onto the property market. Whilst there remains no remedy or demonstrable assistance from lenders, the Buy to Let market will continue to flourish.

So much more behind the scenes!

noreply@blogger.com (Dale Jannels) — Fri, 26 Feb 2010 10:27:00 +0000

I am delighted to commence this week’s column with the fantastic news that AToM has received another national mortgage industry award! We have been voted the ‘Best Mortgage Packager’ by MYIntroducer.com 2010. These awards are amongst the only ones in the industry truly determined by customer votes. Most awards have a panel of judges who vet and nominate. This is our second award for 2010 already having received the ‘Treating Customers Fairly’ accolade from the Mortgage Finance Gazette. We have a super team at AToM and this award is real credit to the hard work the staff have put in during the recent tough market conditions.

As a Mortgage Packager, AToM sticks out from the crowd somewhat. A Mortgage Packager not only works with the general public, but nationally too with many Accountants, Mortgage Brokers, Independent Financial Advisers and Estate Agents. As a Mortgage Packager, with over 10,000 registered introducers on our databases, lenders use AToM to offer their mortgage products seeking quick distribution and marketing to all of the above. This often means that we see exclusive deals, new lenders and product innovations, ahead of the general marketplace. As a Mortgage Packager, we also collate information for the lenders, obtain employer or accountant references, instruct valuations, obtain mortgage offers and in some cases go right through to requesting funds and instructing completions.

Some of these lenders will work through limited distributions, enabling them to control their business volumes. In other words, it’s up to AToM to identify the cases that may, or may not, fit the lenders criteria quickly and direct them accordingly. As a result, lenders may not need to employ as many staff to man the phones or underwrite cases. Thus containing their costs. Some lenders choose to distribute through just nine sources, of which, thankfully, AToM are one. Others will use preferred Mortgage Packagers to distribute specific tranches of their products, and so on.

So in short, we are a little bit like Doctor Who’s Tardis. The AToM shop front opens onto a business which has much, much more going on behind the scenes!

New products and lower rates - Confidence returning?

noreply@blogger.com (Dale Jannels) — Fri, 19 Feb 2010 12:01:00 +0000

Numerous mortgage rate changes have occurred during the last week or so. Some up, no surprise there then, and some down. Many innovations remain in the mortgage market with lenders offering switch and fix type products enabling you to initially take a low cost Bank Base Rate tracker and, at any time during the term of the mortgage, switch to a fixed rate at no extra cost. Great products, although beware that the switch to a fixed rate will be based on the rate at the time. If tracker rates are on the increase, you can almost certainly guarantee that the fixed rates will also have risen.

One lender has recently re-launched their Buy to Let offerings for properties owned in Limited Company Names and also Houses of Multiple Occupancy (HMOs), including student lets, etc. With Buy to Let rates starting from 4.34% (tracker) and up to 70% loan to value, this is really positive news and signs that confidence in the market is on the up and lenders appetites for volume business is returning.

Further good news as the Co-operative Bank has launched a securitisation deal worth £2.5bn. The residential mortgage-backed securities (RMBS) deal is due to close at the end of February. What does this mean? In short, it's a volume of mortgages, bundled together and sold off to investors as a package. On this basis, it dilutes the downside of any one borrower defaulting. For the industry, it means that the Co-op, once this book is sold, should be able to lend a further £2.5bn in new lending. Others, including Lloyds and Nationwide, have recently completed similar transactions. If these type of deals can once again become more standard, it will be great news for the market and economy.

Microbiz, the HDC initiative for small businesses, takes place on 13th March at the Drill Hall in Denne Road. Please support this – AToM will be there!

Finally, the WSCT Business Awards are just around the corner and if you have not yet voted for your chosen company of the year, then please do (hint hint!).

Why am I being declined a mortgage?

noreply@blogger.com (Dale Jannels) — Fri, 12 Feb 2010 12:56:00 +0000

So! You have no credit problems: you have a good income: no debts and you are looking to buy a property or maybe remortgage. But then, your bank, with whom you’ve been a loyal customer to for many years, reports back that you have a low credit score and the computer says “no”. They will not offer you a mortgage. This is a dramatically increasing scenario. The world of credit scoring (tick box mentality) has taken over and there’s no arguing with the lender once their technology has made the decisions.

Fear not! There is light at the end of the tunnel. AToM recognised that good clients were being rejected by lenders for no apparent reason and has built up exclusive relationships with five lenders who will assess an application manually and seek to offer assistance to such customers. This is our alternative to ‘the computer says no’ and have found an avenue for the right deals working with lenders that not only manually underwrite cases, but who have an appetite to lend. We call this Complex Prime and it does not just include those turned away by their bank for low credit scores. It could be a case scenario that needs a bit of lateral ‘out of the box’ thinking by an underwriter keen to say ‘yes’. This could include cross collateral security for clients who are asset rich: a sympathetic view for those who have trouble in proving ‘real’ income: customers who need guarantors or maybe just need someone to sit down, review the whole picture and advise on the best route to take.

I have always suggested that you speak to an independent mortgage broker with access to whole of market mortgages. Banks may only advise on their product range. Estate Agents ‘in-house’ mortgage advisers may only be able to offer mortgages from a select panel of lenders. Therefore, in order to get best advice, make sure you do your homework, speak to a whole of market mortgage broker who can advise on the most appropriate mortgage in the market to meet your requirements.

Properties appear to be selling quickly..

noreply@blogger.com (Dale Jannels) — Fri, 05 Feb 2010 18:18:00 +0000

A customer visited AToM last week to arrange a mortgage for their new property purchase. We obtained an agreement in principle, subject to the lenders normal underwriting, and the clients left ‘very happy’ with the speed at which this agreement was obtained. However, they still had to sell their own property. Most lenders “agreements in principle” are valid for anything between 30 and 90 days. The client left the office content in the knowledge that they had a new mortgage in principle and could confirm this to the vendor’s agents. Their own property was placed on the market the same day. This is usual practice and we then awaited the clients further instruction with regards to proceeding, once sold. The following afternoon, we had a call from the customer confirming that they had received four viewings that day and had accepted an offer nearly ten thousand pounds more than the asking price! One day on sale, two offers and one accepted! Proof, locally, that the market is returning especially if the property and, more importantly, the price is right. Consumer confidence is rapidly on the increase, a lot more properties are on the market and as mentioned above, they appear to be selling!

I attended a product launch in London last week and one of the points of particular interest was the predictions on where the Bank of England Base rate will be in the next 12 to 18 months. Some large banks and building societies contributed to the predictions, including luminaries such as Goldman Sachs, HSBC and Nationwide. The general consensus was that, as we expect, BBR will rise in this time period. The lenders in-house specialists, economists and analysts have predicted that by the end of this year, the BBR will be 1-1.5% rising to around 3.5% by the middle of 2011. Interestingly, despite the same people being unable to predict (in advance) the recession or duration of the ensuing market turmoil, these predictions may just be worth taking note of and maybe a short term tracker rate is worth a look after all….

Out of recession and SVRs on the increase!

noreply@blogger.com (Dale Jannels) — Fri, 29 Jan 2010 09:12:00 +0000

Mortgages - an interesting world! Gross mortgage lending is quoted to be up 12.5% year on year. Product offerings are increasing. Moneysupermarket.com indicates 384 products are available to those looking for an 85% loan and 165 for those looking for 90%. The UK is officially ‘out’ of recession! Superb news, so perhaps confidence will start to return in the mortgage sector now?
One point of concern surrounds the activities of some mortgage lenders and their reversion interest rates (rates which apply at the end of an incentive rate period). It appears that, despite mortgages being sold with a quoted interest rate ‘ceiling’ at the end of the incentive term, there may be options in the lenders small print allowing increases above this, and at no notice!
One lender which appears to have made such an increase is Skipton Building Society. Their offers ‘allegedly’ quoted a ceiling of 3% above the Bank of England Base Rate. Their new SVR (from March) will be 4.95%, an increase of 1.45%. This is blamed on “exceptional market conditions”! Ouch! Skipton’s actions have suffered the wrath of the national press and now the floodgates are open for others to follow if they have similar ‘get out’ clauses in their mortgage offers. Nationwide have increased some SVRS through their specialist arms UCB Homeloans (0.30%) and The Mortgage Works (0.50%) respectively. Two smaller lenders have announced a 0.35% increase from February.
What does this mean for you? Check carefully the details of your original mortgage offer. If the reversion rate is the lenders SVR, then it’s likely this will be increasing shortly. If it is a Bank Base Rate Tracker then you are likely to move onto an attractive reduced rate, at least for a while! Whichever, it is a good time to review your contract paying specific attention to the sections relating to reversion rates.
The re-mortgage market is reviving and it is a good time to review the market to see what’s available to you. Lenders seem to display little or no loyalty to you, so you have no moral obligation to them. There are plenty of lenders willing to compete for your business. Call AToM for a no obligation review.

Credit Card + Mortgage = not good.

noreply@blogger.com (Dale Jannels) — Fri, 22 Jan 2010 18:33:00 +0000

A recent report from housing charity Shelter has suggested that as many as one million households are using their credit cards to meet their monthly mortgage or rental payments. This figure represents 6% of homes in the UK, with the charity adding that the problem is growing amongst the middle classes. Without doubt, this is a worrying trend as not only will you be increasing your current debt, you’ll probably be paying interest payments on both your mortgage and your credit card! Shelter have called these figures a “shocking discovery” and warned that in some cases if people were to default on their credit card payments, their homes could be repossessed.
In addition to these striking revelations, Creditaction has reported that 9,300 new debt problems are reported to the Citizens Advice Bureaux and 1,000 people are seeking some formal debt rescheduling plan every day. Therefore, it is unsurprising that in the same report, it is highlighted that a property is being repossessed every 11.2 minutes throughout the UK.
My advice would be not to let the situation get so bad that there is no way back. In the current climate, mortgage arrears are frowned upon as the worst possible misdemeanour. Worse than CCJs, Defaults and other missed payments on credit. Make sure you review your circumstances and take action before it happens. Once mortgage arrears, CCJs or Defaults are registered, every financial institution (including insurance & mobile phone companies) will see these when making decisions on whether or not to lend to you. At the same time, it is likely that any online internet application will fail should you have one of these issues registered against you within the last 12 to 24 months, as nearly all lenders use credit scoring and these inevitably will have a detrimental affect to you score.
To continue the scare mongering, there are only three or so lenders left in the market who will assist clients with adverse credit. The best case scenario is rates around the mid 5%s for historic adverse. The worst case is rates starting from 9.90% with eight, yes eight years redemption penalties to pay if you want to leave them. Therefore, the moral of the story is a simple one. If the going is beginning to look tough, speak to AToM for assistance. Sooner, rather than later!

Rates down and Lenders are attractive!

noreply@blogger.com (Dale Jannels) — Fri, 15 Jan 2010 15:46:00 +0000

Two weeks into the working year and the mortgage market is looking incredibly positive! Many lenders, including Abbey, Chelsea, Coventry, Halifax and Nationwide have reduced their fixed rates recently. Others have increased the amount you can borrow against the value of the property and another lender has launched an 80% tracker rate with no redemption penalties, meaning you can leave when you like at no extra cost. It appears the active lenders are becoming somewhat nervous at the ‘alleged’ number of applications received by the FSA from prospective new lenders as well as the competitiveness appearing between those already there! As a result, increasing market share has become priority and lower rates and competitive products can only be good for all!

We have also noticed a number of lenders becoming somewhat more relaxed in arranging mortgages that don’t fit the normal credit score mould. Some while ago, I mentioned that AToM had re-launched its ‘Complex Prime’ proposition. Complex Prime looks at applications which, ‘for whatever reason’ do not fit the normal high street mentality or need something of a more complex underwriting nature. A short list of examples include applicants with no credit, too much credit, a desire to pay up front or add additional security in the form of another property increasing their ability to borrow more. We have five lenders on our panel already looking exclusively at this scenario for AToM. One has awarded AToM a £10m tranche of funds, so there is no better time to visit our offices in the Carfax, Horsham, to see how we can assist you.

Finally, why not visit our website at www.atomltd.co.uk and review all of our financial offerings. These range from the ability to apply online for mortgages from the whole of market, secured loans, credit cards, right up to switching your mobile phone, gas and electricity bills or simply to review your current insurances. Give it a try, you’ve got nothing to lose, but a possibly a lot to save!

2010 - time to be positive!

noreply@blogger.com (Dale Jannels) — Fri, 08 Jan 2010 13:08:00 +0000

Firstly, a very Happy New Year to one and all! What a way to start……..VAT is back to 17.5%, the Stamp Duty threshold has returned to £175,000, and the fluffy white stuff is causing havoc (and great fun!). As 2010 emerges from the grey of 2009, what portends for the mortgage market as we head towards the Spring? A General Election, more regulation and greater confusion for those looking to step onto the property ladder, or change their mortgage?

The challenge we face in 2010, as a mortgage intermediary, is being able to compete on a level playing field against those organisations that conduct non-advised sales (especially the banks) or who are not independent and do not remotely offer even a representative ‘whole of market’ offering. Whatever your scenario, you need and deserve to be given advice for all products available in the market, not just a chosen few!

The other challenge facing us all is the national debt! The myriad of press and TV coverage will have ensured that we are all fully aware that, whoever wins power in the forthcoming elections, there will be financial pain meted out to the community to engender recovery of this issue which has spiralled massively out of control.

Good news this week in that one of the larger property websites has allegedly reported that, on Monday alone, they received more hits than in the whole of January 2009. Positive news and greatly received so early in the year!

We too, had a positive end to 2009 with more new applicants than for many months. If this is a sign of returning confidence then that is good news all round in the home mortgage sector. Confidence is contagious and is a good thing. Let's start the year that way and, who knows where it might lead us?

Something to ponder..

noreply@blogger.com (Dale Jannels) — Fri, 18 Dec 2009 17:07:00 +0000

I start this week’s column with a brief look back at 2009!
January saw UK plc officially reach recession with house prices in steep decline. BBR dropped in February and has remained at 0.5% ever since. In March, many banks announced dramatic losses. Stamp Duty relief was extended in April for properties under £175k until the end of 09. May confirmed hundreds of mortgage brokers had left the market! In June AToM opened new premises in the Carfax (Hooray)! July’s mortgage business hinted small signs of recovery. August saw a renewed call for Estate Agent regulation and in September Lloyds completed the first mortgage asset backed securitisation in Europe for over a year! In October the FSA circulated their Mortgage Market Review proposals including the removal of self certification mortgages. November saw news of a number of lenders ready to join or re-enter the UK mortgage market and December bought the pre budget report - Oh joy! Overall, not a great business year for mortgages! It can’t get any worse, can it?

So, something to ponder - BBR will increase at some point soon. Some pundits suggest late 2010. We think it will be sooner. Tracker rates remain attractive but if you are waiting on a tracker and planning to move to a fixed rate when BBR moves, then beware….we can almost guarantee that the cost of fixed rates will quickly rise too. So, if you are sitting on a good tracker, is it worth taking a gamble on where fixed rates will be when the uplift in BBR comes? If you are keen on stability, have you thought about the possible advantage of taking a small hit at the front end knowing you are well placed with rate protection when BBR rises? A conundrum to consider during the festivities?

Thank you for reading my column throughout 2009. Please let me know any burning issues you would like me to cover in 2010. You can email me at dale.jannels@atomltd.co.uk or give me a call on the above number.

The directors and staff at AToM wish you, family and friends a very Happy Christmas and relaxing New Year. We look forward to being of assistance to you during 2010. Let’s hope it will be a good year for everyone…

AToM launch 'Complex Prime'

noreply@blogger.com (Dale Jannels) — Mon, 14 Dec 2009 09:29:00 +0000

Despite the decade drawing to a close, there is still time to look at a new mortgage! Many lenders offer ‘product transfers’ or ‘retention products’ to existing customers. These are not generally advertised to the general public or offered unless you ask for them. If your current incentive rate has come to an end and you have been transferred to the lenders standard variable rate, you will often have the option to choose a new product from an internal range available to existing clients. Some lenders have a good range of retention products. Others, particularly in the current climate, may not and expect that you will simply pay the new rate or move lenders. When moving lender, you release the original funds back to the current lender to advance to someone else, probably on a higher rate of interest and with an attractive new arrangement fee. Basically, some will make more money if you switch lenders, than if you remain on their books! Most retention products can be arranged within a matter of days. Speak to an independent mortgage brokerage to see what’s available and see whether this is the right option for you.

I rarely promote AToM product offerings in my column. However, this week is an exception! With most lenders, a mortgage is initially agreed using a tick box computer system. If you tick all the boxes, you normally get offered a mortgage. However, if you are not on the voters roll: have too much credit: have too little credit: require something a little more complex…. you may find it difficult to get past the first hurdle. Don’t give up! AToM have launched ‘complex prime’ to cater for such examples. We have an arrangement with three lenders who will ‘manually’ underwrite your application and, if the deal fits, they will look ‘outside the box’ and lend. This is a superb alternative to the current “computer says no” mentality and is a positive step forward by the lenders we are working with. It is refreshing and harks back to the days of real underwriting! Call AToM now to find out more.

Trackers remain the product of choice.

noreply@blogger.com (Dale Jannels) — Tue, 08 Dec 2009 17:50:00 +0000

4/12/09 - We are suddenly well into the Christmas season and as such, I should really look to be upbeat and not announce anything other than glad tidings. So, I won’t be able to let you know that the Citizens Advice Bureaux have reported an increase in debt problem queries and are now handling an estimated 9,300 new enquiries every day. I certainly won’t mention that 1,000 people are seeking some sort of formal debt rescheduling every working day. And, lastly, I will definitely refuse to write about the 386 people who will be declared insolvent or bankrupt today or that it is equivalent to one person every 3.72 minutes. Stark facts indeed as released by ‘creditaction’. What these disturbing numbers signify is that, even though it is the season to be jolly, reality determines that this Christmas may prove to be a financial burden too far for many and the price people will be prepared to spend on it may well receive much more thought than in previous times. It could go two ways - firstly, people will put their cares to one side, forget the 2009 trials and tribulations and the credit cards will be flexed with any spends being forgotten until later. Or secondly, the purse strings will be drawn and funds will be tightly managed. Whichever applies to you, just make sure you’re happy and don’t regret it later!
Other news - House prices have increased for the seventh month in a row according to the Nationwide. Rising by 0.5%, the average house price is now at a similar level to that of 2006 and 2.7% higher than in November 2008. Mortgage product availability is also increasing. As lenders fight for market share, great new products and innovations are being sought. One lender has launched a very attractive 10% deposit product that tracks the Bank of England base rate plus 4.29% (so 4.79% - APR 4.4%). Trackers still remain the product of choice as experts predict that base rate will remain static for some time. So, if you are in the market for a 90% mortgage, and your income can stand scrutiny, this is a product well worth further investigation.

"bedside manner" counts, even from Brokers!

noreply@blogger.com (Dale Jannels) — Fri, 27 Nov 2009 16:05:00 +0000

Mixed messages from lenders this week! One major high street lender is apparently 10% below its projected business target. This is great news as, shortly, we should see some highly competitive rates launched to attract new business, as we move towards the year end. Another lender who suspended lending last year is back, albeit with a limited product offering. But again, this is great news.
Conversely, some lenders are experiencing severe service issues and, despite being low on intake, have tightened criteria which curtails new business whilst offering a better service to customers. What you can get today, may not be available tomorrow.

As I reported recently, the last remaining self cert (no proof of income) lender withdrew from the mortgage market. They also took with them some great adverse product offerings. This has resulted in just a handful of lenders offering products to those who have incurred CCJ’s, defaults, bankruptcies/IVAs or who have poor payment profiles. The volume of business submitted to the remaining lenders has increased their exposure in this sector and one lender has already suspended certain products in order to stem the intake of new applications.

It really is becoming tougher to get a mortgage in the current climate and now, more than ever, you should do your homework and speak to a ‘whole of market’ mortgage adviser and compare all mortgages available. Even Martin Lewis, of moneysavingexpert.com, writes on his website “Ask ‘em – Are you Whole of Market”. If the person you are speaking to is not offering “whole of market” advice, i.e. they just review a panel of selected lenders, you may not be getting the best product for your needs and/or requirements. And remember, you can place your mortgage with whoever you like. You are under no obligation to anyone, despite what some may say! Everyone covets your business and there appears to be some underhand (and not necessarily compliant) tactics going on. Again, to quote Martin Lewis – their “bedside manner” counts! If you don’t like their stance, or they’re ‘forcing’ you to use them, walk away….!

Another year yet..

noreply@blogger.com (Dale Jannels) — Fri, 20 Nov 2009 12:27:00 +0000

Every year, the mortgage industry holds an exhibition for all providers in London. The event lasts two days and it’s a good chance to meet lenders, discuss business with competitors, and review new product providers, etc. However, this year, it was somewhat of a small affair held at Olympia and only five or six out of the 60 exhibitors (normally 200+) were lenders happy to invest in promoting themselves and their product offerings! I still decided to visit and met with those who were participating and the general consensus was buoyant and one of optimism. This was until day two, when the last remaining Self Certification (no proof of income) lender withdrew from the market. If there’s one thing the market needs right now, it’s more lenders, not less! Although only lending a small amount compared to the high street names, a couple of billion is still a lot of lending in the specialist markets! Less than a week later, we’re already seeing a gap in the market which Self Cert used to fill.
The other message, repeated by various sources, was that the expectancy for new lenders to arrive and for lending to increase dramatically is still another year away. What does this mean? In short, the lenders currently lending can control the market between them. They have limited competition and, as long as they hit their own internal targets and profitability, need not reduce rates and/or fees to attract more customers. They can also keep criteria controlled and have a limited appetite to review applications that don’t quite fit their standard mould.
I’ve said it before, but it needs re-iterating again and again - if you have plans to apply for a mortgage in the not too distant future, keep your head above water. Don’t miss or make late payments to any provider. All financial institutions will base their decision initially on your credit history. If you have missed or late payments, or even a lot of recent searches (from multiple finance/mobile/car/home insurance applications), this could be detrimental to your ability to obtain finance, at a competitive rate. If you have not reviewed your credit search before, get it for free (for 30days) from the AToM website. It’s well worth a review and a good insight on how attractive you look to a lender!

You could be stuck in your current property...

noreply@blogger.com (Dale Jannels) — Fri, 13 Nov 2009 10:57:00 +0000

It has been a very mixed week in the mortgage market! Recent reports suggest that the FSA have admitted to putting increasing obstacles in front of potential new mortgage lenders. Superb! So we’re left with the small number of current lenders, and their inability to share Quantitative Easing monies received from the Government. So much for competition in the mortgage markets and the much trumpeted instructions from the Government and Bank of England for lenders to lend!

As predicted a few weeks ago, the Self Certification (no proof of income) mortgage market has been dealt a major blow. Of the two lenders left, one withdrew last week and it is likely that the ‘last man standing’ will not remain so for long. I’ve no doubt that they will withdraw possibly before the FSA’s mortgage market review request to ban Self-Cert comes in to effect earlier next year. Whilst it is probably true that there has been some abuse of this product, and lenders are not immune from responsibility, it is still suitable for the right people in the right circumstances, especially the self employed. I am concerned that the forced demise of this sector has not been carefully thought through.

UPDATE - since submitting this article on 11/11 for publishing on 13/11, the last lender offering self cert mortgages has now also withdrawn from the market.

2.5 million homeowners are living in their current properties for longer than they had originally planned, reports Unbiased.co.uk. Of those surveyed, one in four homeowners are stuck in their current property due to the fact that they have been unable to sell at the price they envisaged. Another quarter are staying longer than planned because they cannot afford the increased mortgage repayments on their next home!

And finally, with Bank Base Rate remaining at 0.5% for the umpteenth month in a row and with some attractive products available in the mortgage market, this really is a good time to look at a new mortgage. Remember, you can deal with whoever you want to! Speak to your local and independent mortgage brokerage as soon as possible to ensure you don’t miss the right product for your specific requirements. You know who to call!

The run up to Christmas bargains!

noreply@blogger.com (Dale Jannels) — Fri, 06 Nov 2009 10:14:00 +0000

Competition is rearing its head in the mortgage market as lenders start to flex their muscles, lowering interest rates in order to attract volume business before the year ends. Both fixed and tracker product rates have been reduced of late. Base Rate Trackers seem to be back in favour with many as pundits predict that the Bank of England base rate will remain low throughout 2010 (at least) with rises predicted at some point in 2011. Many re-mortgage deals are now being offered with free valuations and free legal costs. Although purchases continue to outstrip re-mortgages by some margin, this might be a good time to consider a re-mortgage bargain in the run up to Christmas with little or no cost involved to change lenders. With product availability on the increase, it’s certainly a time to review all the options and speak to an independent mortgage brokerage to ensure you don’t miss out on the right product. They may not be around for too long in this still fragile market!
October saw a 0.4% rise in average property prices - according to Nationwide – the sixth consecutive monthly increase, taking the value of an average home to £162,038. However the society warned that the pace of monthly increase is slowing and this aligns to other predictions that the first quarter 2010 may prove to be static or possibly even deliver a decreasing house price market.
So, having encouraged banks to get together, and funded them with billions of our hard earned cash, HMG is now looking to break them up! Not only that, but they are going to give them another huge chunk of cash too! How does that work? Well, apparently this edict is from our European masters who have decided that perhaps our banks are too large! I may have a simple outlook, but is this not what many of us said at the time worrying that there was a great danger that too few banks would have too great a control? Its beggars belief that we would willfully waste such large sums of money in such a short period of time and all at the expense of the UK taxpayer! Or is it just me?

Are you invisible to Financial Institutions?

noreply@blogger.com (Dale Jannels) — Tue, 03 Nov 2009 09:40:00 +0000

30/10/09 - When applying for finance, if you don’t appear on the electoral roll or don’t have any credit, some lenders may consider that you don’t exist financially! This has been the bain of our lives over the past few months! In current climates, it seems that lenders only need to find the smallest of excuses to not agree a mortgage request. Historically, lenders were often more amenable if an applicant could not be located on a credit search. Today, if you have no regular credit commitments or do not appear on the electoral roll at your current address, be prepared for a knock-back.

The market has been pretty quiet this week, with only a few lenders making headlines and reducing rates. I suspect the market is still coming to terms with the impact of the FSA’s proposals for the mortgage market, as reported in last weeks column.

AToM is experiencing large numbers of ‘complex prime’ enquiries lately. One example is for an expatriate living abroad and who are working for a non international company seeking to re-mortgage a property which is currently rented out in the UK. Another example - for tax purposes - customers seeking to purchase a number of investment properties in a Limited Company name with their company structure designed purely to hold properties.
These are live examples which certainly can be placed. They just need a bit of extra thought and the location of lenders who don’t fit the normal credit scoring mentality.

Santander’s UK Banking arm, who own Abbey, Alliance & Leicester and Bradford & Bingley has confirmed a profit for the first 9 months of 2009 of £1.16bn, an increase of 58% compared to the same period last year! This is positive news and indicates that the market is turning. I am sure that we will see others reporting huge profits before the year end!

The PM once told us we'd never had it so good....

noreply@blogger.com (Dale Jannels) — Sat, 24 Oct 2009 11:19:00 +0000

Predictably, the major talking point in financial services is the FSA’s Mortgage Market Review. Some of the proposals include:

1) Removal of Self Certification mortgages:
Self Cert mortgages account for approximately 10% of the residential market. True, this offering has been abused by a few yet, in the main, Self Cert is a valuable product offering. Once abolished, existing customers may become trapped in their current mortgage. Possibly with a lender no longer operating meaning that they may be unable to refinance or move. At current low interest rates this may not be an issue. However, when rates increase quickly, a new mortgage may be difficult to realise and may result in customer arrears or, worse still, repossession due to lack of options. Those who are self employed and have difficulty proving income (which may come from a variety of sources) or recently established businesses will undoubtedly find it more difficult to obtain a mortgage, if at all, should these new proposals be approved.

2) Lenders to assume responsibility for a consumer’s ability to pay:
Why give credit to someone who can’t afford it? This should be happening now! I agree with this in principle but it needs to be widened to the Credit Card companies still sending out “pre-approved - sign here” forms on a daily basis. If I said yes to them all, I could be ‘quid’s in’ but could I afford the repayments…?

3) Requiring all mortgage advisers to be personally accountable to the FSA:
This one is interesting. We are already authorised and regulated by the FSA and this proposal wants us to be accountable for the mortgage you take. In effect this proposal removes the consumer’s responsibility for any transaction undertaken. Whatever happened to Caveat Emptor? Can I buy a lottery ticket and then sue the provider if I don’t win?

4) The regulation of Buy-to-Let and all Secured Lending:
Great idea and I 100 per cent agree, once authorisation and regulation of the current residential markets have been tried, tested and proven! If they were, would we be in this mess?

Obviously there are many more proposals, but I’ve so few column inches! The certainty with this review, if implemented, is that consumers will have less choice and pay more. Do you remember a PM telling us that we’d never had it so good?

Buy and be quick! | Bye bye Self Cert?

noreply@blogger.com (Dale Jannels) — Fri, 16 Oct 2009 13:02:00 +0000

It may have slipped your mind, but we’re only a couple of months away from…the stamp duty threshold increase! Oh and Christmas! This means that if you are looking to purchase a property priced between £125k & £175k, unless you complete the purchase before the end of the year, you could be paying out a further £1,250 to £1,750 in stamp duty costs. This is of course unless the property is in a ‘disadvantaged area’ in which case the Stamp Duty threshold decreases to £150k, rather than £125k. The clarification on a ‘disadvantaged area’ on the HM Revenue and Customs website is ‘residential, mixed use residential element’. Good, glad that clears that up then!
The Self Certification (no proof of income) market seems to have its days numbered as The Mortgage Works (specialist arm of the Nationwide) withdrew all its Self Cert products last week. This only leaves a few Lenders remaining in this arena and they will not want an increase in business from this sector. With speculation rising in the market that the FSA are looking to remove Self Cert altogether, Lenders will be currently reviewing the risks and their exposure in this category and I suspect more will withdraw in due course. It’s a shame as Self Cert is ideal for many customers with self employed income and, especially in the current climates, where people have two or more jobs with income not readily provable. On top of this, the removal of such a category could also trap existing borrowers into their current mortgage.
Finally, the Bank of England base rate is set to remain below 2% until 2014, according to the Centre for Economics and Business Research. The CEBR is predicting that interest rates will stay at 0.5% until at least 2011. If correct, this is great news for those on tracker rates. In fact, a few lenders have launched products for customers to start on a tracker rate and, if the Bank base rate was to increase, allows a switch to a fixed rate (for a minimal fee!) at any time during the tracker period (conditions apply!). Good to see some Lenders assisting with innovative products!

Properties selling over the asking price!?

noreply@blogger.com (Dale Jannels) — Thu, 15 Oct 2009 18:03:00 +0000

09/10/09 - Confidence in the market continues with the Abbey, Alliance & Leicester and Northern Rock reducing the interest rates on some fixed rate and tracker mortgages. Some of the tracker rates are sub 3% and well worth a look if you believe rates will not increased rapidly over the next couple of years. Other fixed rates, sub 4%, will suit those who require the comfort of knowing that their monthly mortgage costs are fixed for the period of the product. Whatever your requirement, it’s worth reviewing your circumstances and seeing what’s available in the market.

Lenders seem to be the focus of my articles more recently and in more of a positive stance! As we move in to the final quarter of 2009, and having had lengthy talks with many lenders over the last few weeks, I believe we will see more aggressive products during this period as lenders aim to finish the year on a high and with volume business. Watch this space!

As people remain content to stay on Lenders low standard variable rates, having finished fixed, discounted or tracker rates, it comes as no surprise that recent reports are suggesting mortgages for purchases are outstripping remortgage applications by 9-1! This shows that despite the current market climates, people are still moving properties and first time buyers, as I’ve mentioned before, are getting on to the property ladder.

In fact, more recently I’ve been informed of properties in the local surroundings not only having many more viewings than expected, but selling for way over the asking price! Superb news for sellers. However, although demand for properties is high, supply is still somewhat less and as a result, more people are bidding for the same property.

This is also confirmed by the recent Halifax house price index for September. The report suggests that the increased demand and lack of supply of properties had pushed up house prices by 1.6% for the month. The third consecutive monthly increase and fifth this year.

Future's still not bright....

noreply@blogger.com (Dale Jannels) — Thu, 15 Oct 2009 18:00:00 +0000

02/10/09 - The Land Registry has confirmed this week that house prices decreased in August by 0.1%. Slightly unsurprising news as their data is from property sales some months previous. However it is also stark reality that despite signs we are on the way out of recession, the market recovery is going to be slow and enduring!

In fact, Creditaction figures for October report that the average Brit is just £155 away from a money meltdown. 12m Brits (25%) are currently struggling to cope with their monthly bills and 39% of people would be in trouble if they had to find just £50 extra each month. Essential bills now equate to £1,378 on average each month per person and £2,001 for families.

House purchase mortgage approval numbers for August were 81.4% higher than a year ago, despite data from the Bank of England confirming that 20% of all applications for mortgages for house purchase by major UK lenders were rejected!

The average current Mortgage Interest rate is reported to be 3.58%. The average house price in the UK in July 2009 for first time buyers was £143,454 which is an annual decrease of – 9.1%.

There were 11,400 cases of house possession (equivalent to one mortgage in 1,000) in the second quarter of 2009. According to the Council of Mortgage Lenders, this equates to 125 properties being repossessed every day or 1 property being repossessed every 11.5 minutes.

UK house prices will not reach their autumn 2007 peaks for at least another five years, according to the Ernst & Young ITEM Club. They also expect that house prices will fall again in the first half of 2010.

So, where is the good news? Well, AToM have experienced a 22% upturn in new enquiries over the last month. We have been able to secure products for more than 80% of applicants and this is a dramatic increase. We are experiencing more flexible underwriting from a number of mortgage lenders and the signs are that interest rates for fixed term products are reducing again. All the more reason to visit us to discuss your personal mortgage requirements.

Win £10k tomorrow! Golden goodbyes....

noreply@blogger.com (Dale Jannels) — Thu, 15 Oct 2009 17:57:00 +0000

25/9/09 - For some months, a few of the smaller specialist lenders have been offering existing borrowers ‘golden goodbyes’ to assist them in remortgaging away to another Lender. This tends to be a cost effective way for the lender to lower their exposure and re-capitalise over exposed mortgage books, or so we are led to believe! In some instances, the incentive to the borrower to move away has been thousands of pounds. We are aware of some discounting by tens of thousands. The most recent, Rooftop mortgages are rumoured to be reducing mortgage debts by up to 15%! Quite simply, some lenders are happy to pay substantial amounts to say goodbye! Other lenders have waived early redemption charges on some loans to encourage borrowers to move their mortgage elsewhere. This fad seems to be on the increase and it is likely that more lucky borrowers will be receiving offers of a windfall in the near future, to move lenders. If your mortgage is a with a small specialist lender, who you know are no longer actively trading, a call to them could be very worthwhile and could decrease your mortgage amount, term and payments!

Whilst commenting on windfalls, don’t forget that tomorrow is AToM’s mortgage open day, in association with Mercury FM and Address Estate Agents! Do come along, bring the kids and have a free go at cracking the safe code. If you guess the correct code, £10,000 is yours! You can get free independent advice on mortgages available, especially to First Time Buyers, receive details of properties on sale in the local area and meet Chris Oxlade and the team from Mercury FM who will be playing tunes and creating ‘chaos’ outside the AToM office, in the Carfax, all day! Plus we have a colouring competition for the kids with the best of the day winning a £20 toy voucher!

Enquiries on the up!

noreply@blogger.com (Dale Jannels) — Thu, 15 Oct 2009 17:54:00 +0000

18/9/09 - Over the last week or so, enquiries for new mortgages and remortgages have increased substantially. Funnily enough, we’re receiving a lot of enquiries from customers who have been drawn to some recent bank’s ‘headline grabbing’ rates. Yet when they’ve applied for these amazing products, the lender has been very picky and for no clear reason, declined to lend! Sign of the times! However, we’re more than happy to be of assistance! When choosing who to speak to about your mortgage, ensure that the company you are talking to, whether it be a mortgage broker, or an Estate Agents in house mortgage adviser, has access to the ‘whole of market’ (such as AToM) and not just a fixed panel of lenders. If they do not have access to the whole of market, they may not be offering you the best deal available to meet your requirements (whatever the incentive given to put your mortgage business via their company).
Getting a mortgage through the lenders in the current climates is still challenging. One day it’s easy to get a case through, the next, it’s a nightmare! So whatever you do, try to not give lenders any excuses to decline your application or refuse to lend to you. Try to pay bills on time, don’t miss payments where possible and especially not mortgage payments! Any missed (or sometimes late) payments will be registered on your credit file and this is normally used as the basis of a decision to lend to you. Even Insurance companies are now carrying out credit searches on people before issuing home or car insurances.
Finally, we’ve got together with Mercury FM and address Estate Agents to provide a free First Time Buyers Open day on Saturday 26th September at our premises in the Carfax, Horsham. We will be available to discuss all the mortgages available to First Time Buyers, including Shared Ownership and Guarantor Mortgages. Address will be providing a range of properties for sale, and you have the chance to win £10,000 by cracking the Mercury FM safe code! It’s well worth a visit, even if you’re not a first time buyer and looking for mortgage or property advice. You never know, a visit to AToM could put £10k in your pocket! We look forward to seeing you.

Lender delays....although properties are selling!

noreply@blogger.com (Dale Jannels) — Mon, 14 Sep 2009 18:50:00 +0000

SWAP rates (mechanism through which lenders can acquire a fixed price for funding over a specific period of time) have reduced over the last few weeks. The cost of 5 year fixed monies currently resides around the 3.30% mark. The Lender then provides the product to you, the customer, at rates currently in excess of 5%. Add in an arrangement fee of circa £999 and you will understand my sceptical view that huge profit figures will be released by the Lenders later in the year when they report on their 2nd half of 2009 figures!
The surprising bit is that despite such comfortable circumstances some lenders find themselves in, they’ve not replaced staff that were sadly laid off over the last 18 months and, as such, are incurring service issues! Some are in excess of ten days behind! With property prices competitively priced and deals in need of a quick completion, before the chain collapses or someone gets gazumped, such delays could not be incurred at a worse time.
Despite these issues, some lenders are following swap rates and have reduced rates this week. Good news for those looking to purchase or remortgage (bad news for those in a hurry!). Others have tried to curtail their volume of business by tightening up on criteria, or by increasing the deposits required on their mortgage product portfolio.
First Time Buyer enquiries continue to engulf ‘AToM towers’, exploring all avenues in order to get on to the first rung of the property ladder. With rates reducing, we are also predicting that remortgage applications will increase over the next few weeks as people look to secure decent rates and ensure monthly expenditure is fixed for the foreseeable period. We’re also informed that properties are selling like hot cakes, although supply is still somewhat sparse.
Many experts are predicting the worst is over and a slow recovery has started. How slow, no one knows, but it’s not just positive talk in the market any longer, small signs are beginning to show.

First Time Buyers will get the ball rolling again...

noreply@blogger.com (Dale Jannels) — Mon, 07 Sep 2009 13:53:00 +0000

First time buyer confidence is increasing. We are seeing healthy enquiry levels from first timers either on their own or using a shared ownership scheme. Lenders historically agreed mortgages based on income multiples. Some would lend up to 3.75 x income, some up to 5.1. On joint applications similar style calculations applied. Most lenders now base their decision on affordability along with a review of your credit history which details financial liabilities, previous addresses, financial associations you have with other people and much more. Credit searches provide a full financial picture to lenders, enabling them to decide if you have a good risk profile. You can access your own Experian report via the AToM website and we recommend this to any applicant looking at the mortgage market. It is well worth understanding what details a lender will be using to assess your potential borrowing capacity.
Despite the school break coming to an end with many of us breathing a sigh of relief to have survived it safely without losing too much hair, Christmas is just around the corner and will creep up quickly! Have the last few weeks been costly? Have you been ignoring your finances hoping they will go away? Are there financial decisions looming? If so, now is a good time to start reviewing them.
Recent figures from Credit Action suggest that 33,600 applications for credit have been turned down daily during the past six months. 3,036 people became redundant daily in the 3 months to the end of June. In the same period 125 properties were repossessed daily and, today, 362 people will be declared insolvent or bankrupt. Stark figures indeed!

An Equifax survey recently reported that almost 30% of consumers are turning to parents or close family members for help with debt repayments or finances. More than 50% will openly discuss their financial situation with friends and family. This being the case, it really is time to seek independent professional advice.