Poor credit remortgage

Wednesday, October 31, 2007

Credit problems whether past or present do not have to stop you getting the finance you require. If you have/had CCJ's, arrears or defaults on loans and credit cards you could still be able to obtain a mortgage from a lender who specialises in people with a poor credit rating.

Most high street banks or mainstream lenders will not accept enquiries from people who have a poor credit rating and if you have found this to be the case you may wish to consider applying to Solution Mortgages. We use a range of lenders who would consider an application from you.

Whether you have serious arrears, got divorced, have fallen ill or lost your job for a period of time and incurred missed payments on any aspect of your credit, do not hesitate to get in touch.

Bad debts, credit problems, and CCJ’s mean that one in four people find it difficult to obtain a mortgage or remortgage from a traditional high-street lender. You may have an IVA or are registered bankrupt.If you find yourself falling into one of the above categories, there is a solution.

We can help you find a mortgage lender who takes a more flexible view of people with credit problems, or those who are self-employed and require a self-certification mortgage.

Housing market expected to remain positive in 2008

Tuesday, October 30, 2007

The Council of Mortgage Lenders expect house price inflation to remain positive and transactions to remain over 1 million in 2008 despite a decrease in growth.

House prices by the end of 2007 are expected to have risen 7% on the year and expectations are for 1% growth in 2008.

The housing market and mortgage market are facing challenging times but the 'credit crunch' has come at a time when the UK economy is in reasonably good shape.

Gross lending in 2007 is expected to be £360 billion and forecasts for 2008 are £340 billion.

Property sales are expected to be 1.17 million in 2007 and 1.01 million in 2008.

On a sad note repossessions are expected to increase to 45,000 in 2008.

Bad credit

Monday, October 29, 2007

If you have bad credit and are finding it difficult to raise finance or obtain credit it will mostly likely be down to your credit score.

You may have incurred county court judgements (CCJ's) in the past or have current or historic mortgage arrears. Similarly missed payments on credit cards or loans will all affect your credit profile.

In an ideal world it would be easy to say not to miss any payments on any credit you have but problems with finances are unpredictable. You may have lost your job or an unforeseen event may cause you to miss payments.

This is where Solution Mortgages can help. We have access to specialist lenders who will consider applications from people who have bad credit. They will take a slightly different view from mainstream or high street lenders and based on their criteria will review the application and then make a lending decision. The mortgage will be subject to an affordability calculator which will take into account any other credit you have. This must be taken into consideration along with the proposed new mortgage payments. If you are raising additional finance when you are remortgaging to pay off your unsecured credit then we will be able to ignore the monthly payments on these.

In the current economic climate it is becoming increasingly difficult for people to obtain credit. If you are experiencing financial difficulties with your current mortgage, it is best review your options early. If you have missed 3 payments on your mortgage it will be easier to find a lender who will be able to help you than if you have missed 6 or more payments. Obviously you must still have equity in your property to be able to do this.

If you have any questions with regards to remortgaging and you have bad credit, call Solution Mortgages on 0845 123 1260 or apply on line at www.solution-mortgages.co.uk

Mortgage arrears

Friday, October 26, 2007

Many people experience financial difficulties at some stage during the term of the mortgage. In most cases, these difficulties can arise through no fault of their own, for example:-

illness

redundancy

unemployment

matrimonial problems

Mortgage problems are often made worse by the existence of other debts, especially if you are under pressure to pay other creditors at the expense of the mortgage.

If you are in arrears with your mortgage you should contact your Lender immediately to discuss your account.

You should always:

Pay as much as you can, even if you cannot pay the full amount.

Speak to your lender as soon as you have a problem and decide with them the best course of action.

Check which benefits you may be entitled to, not only with regard to the mortgage, but other benefits which may increase your income. You can check directly with the Benefits Agency .

Consider ways of increasing your income, for example, taking in a lodger.

Work out your personal budget to show your exact financial position

You may need to get some debt counselling advice.

A Financial statement is a useful way of checking your financial situation, these are available from Housing and Community services.

You should never:

Stop paying your mortgage. The debt will not go away.

Ignore the problem. The longer you leave it, the worse it gets. Do not delay getting help.

Give up hope. The majority of borrowers in arrears do not end up being repossessed.

Sell your home without seeking advice. Especially, if you are considering applying to the Council for help.

Abandon your home or hand in your keys to your lender. This will not end the problem. You will still be responsible for the mortgage payments, the costs of selling your home and interest on the loan. Your debt to the lender may increase after the property has been repossessed.

You could also consider remortgaging to pay off your arrears and start afresh with a new lender. This should only be considered if you can genuinely afford the new payments offered by the new lender. If you cannot afford the payments you will only be delaying the inevitable and it will cost you even more money in the process.

If you have mortgage arrears and would like to discuss your options with a representative, please feel free to call on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Which mortgage is right for me?

Thursday, October 25, 2007

At Solution Mortgages we offer a range of mortgage and remortgage products to accommodate the diverse needs of our applicants. We have provided the basic details below to help you make a more informed choice about what mortgage may be best suited for your circumstances.

Fixed Rate Mortgage

With a fixed rate mortgage your payments will remain the same for as long as the mortgage is fixed (typically 1-5 years).

At the end of the fixed period the mortgage will change to a variable rate. You will be able to remortgage at this time should you choose, however early redemption penalties may apply.

If the bank’s base interest rate rises, your payments will not, which is excellent if you’re on a strict budget.

You’ll always know exactly how much your mortgage payments will be for as long as the rate is fixed for.

If general interest rates fall below the figure you’ve fixed your mortgage at, you don’t get to take advantage of these savings and may have to continue to pay the higher mortgage rate.

Variable Rate Mortgage (Tracker)

With a variable rate mortgage, your interest rate is linked to the Bank of England’s base rate and moves up and down in line with it.

This means that if the base rate rises by .5% or lowers by .5%, the interest rate on your mortgage (and your monthly payments) will rise or lower by just as much.

If the base rate goes down, you’ll benefit from lower monthly payments.

If the base rate goes up, so do your mortgage payments.

You may not always know what your mortgage payments are going to be from one month to the next.

Discount Rate Mortgage

A discount rate mortgage is essentially a standard variable rate mortgage, so it still moves in line with the Bank of England’s base rate, but it also has a discount thrown in for a set period of time (typically 1-5 years.)

An example would be a lender offering 1.5% off of their standard variable rate for a period of 3 years.

Like a variable rate mortgage, if the base rate goes down so do your mortgage payments.

With the discount thrown in, it often means that you’ll have a couple years of lower than average payments, which is especially good if you’re just starting out and have stretched your budget to its limits.

Also like a variable rate mortgage, if the base rate goes up, so do your payments.

Depending on how the base rate moves, you may not always know what your mortgage payments are going to be from one month to the next.

Repayment Method

There are two main repayment methods that you can consider when taking a new mortgage.

Capital repayment

Your monthly payments gradually pay off the amount you owe as well as paying the interest charged on the loan. Provided you make all the agreed payments, the loan will be fully paid off by the end of the mortgage term and you will own your property outright.

Interest only

Your monthly payments cover only the interest on the loan. They do not pay off any of the original loan.

You will need to arrange to pay separately into a savings or investment scheme (eg. pension mortgage or endowment) to build up savings to pay off the mortgage at the end of the term.

It is your responsibility to make sure you have enough money to repay the mortgage at the end of the term, otherwise you could lose your home.

Bad credit remortgage

Wednesday, October 24, 2007

If you have fallen into arrears on your mortgage you need to address the situation before your property is repossessed.

You should always give your mortgage priority over any other debts.

You could apply for a bad credit remortgage and release some equity from your property to pay off your arrears. However this should only be done if you can genuinely afford the proposed new mortgage repayments. If you can not you will only be delaying the inevitable. In this situation you may want to consider selling the property.

At Solution Mortgages we have bad credit remortgage products available, regardless of your financial circumstances. If you have mortgage arrears, CCJ's or have been declared bankrupt we should still be able to help you.

It is important to point out, that the more payments you have missed the higher the risk you will be seen to a new lender. This could also mean that the rates available will be higher. The fewer payments that you have missed the better the rate will be.

If you want to speak to Solution Mortgages about how we may be able to help, then please call one of our experienced staff today on 0845 123 1260 0r apply on-line at http://www.solution-mortgages.co.uk/

Securitisation market shows first signs of life

Tuesday, October 23, 2007

The European securitization marketplace has emerged with the news that a residential mortgage-backed securitization has had all its notes publicly offered.

This is understood to be the first such deal since the credit crisis took hold of the global markets in August.

This is good news for the market which is beginning to show slow signs of recovery. It has also emerged today that Lehman Brothers is believed to be preparing a new €1bn commercial-mortgage backed securitization.

Commentators have suggested that it will take until the second half of next year before the securitization market returns to the UK market but with signs of life emerging across Europe, the UK mortgage market is likely to be buoyed by the news.

The deal is expected to be made up of prime mortgages. It is interesting that everything is happening in the European market, stating that it might be a by-product of the ECB having pumped a lot of money into the market.

Once the market sorts out a price for the prime market then it will make it easier to establish a price for the secondary market.

This is good news as there now seems to be genuine confidence starting to emerge.

Buy and rent back schemes criticised

Monday, October 22, 2007

Companies that buy homes at vastly reduced prices and then rent them back to the occupier have been criticised by the Citizens Advice Bureau.

Some companies are paying less than 60 per cent of a home's market value and there is no guarantee that they will rent it back to the original owners for more than six to 12 months, At which point the original owners could be made homeless. This is because the landlord will be able to achieve a higher rate of rental income than that was originally agreed when the agreement to buy and rent back was drawn up.

These are people who are vulnerable trying to stay in their home who are being enticed into an industry that has no controls on it at all at the moment. It is potentially a disaster waiting to happen. Something needs to be done to regulate this side of the market for it to have a framework of quality and assurances.

There has been a large increse in the number of companies offering sale and rent-back in the last 18 months.

Accident, sickness & unemployment insurance

Friday, October 19, 2007

Solution Mortgages has now launched on-line Accident, sickness & unemployment insurance (ASU) cover on its website.

If you are looking for a competitive quotation on Accident, Sickness & Unemployment Insurance on a regular monthly premium basis, you can either go to the website and click on the apply now button for an instant quote or call 0845 123 1260 to speak to one of our experienced staff.

Accident, Sickness and Unemployment insurance (ASU), can also be referred to as mortgage payment protection and will provide you with an income to meet your outgoings if you are off work sick, have an accident or are made redundant. It pays out a monthly benefit to cover your mortgage and other related costs.

You can choose whether you want to receive benefits for accident and sickness only, unemployment only or all three.

Finding it difficult to get a mortgage?

Thursday, October 18, 2007

There are numerous ways in which consumers can receive an adverse credit rating and, once they have one, they can find it very hard to get a mortgage with a mainstream lender. So how do people end up with adverse credit, why is this on the increase, and how can specialist lenders help?

The most common form of adverse credit is a County Court Judgement (CCJ). A CCJ is a claim against someone for money they owe that has been made official by the county court and remains on an individual’s credit rating for up to six years. It sounds like a big deal and in some instances CCJs can be issued because a borrower has built up a sizeable amount of unpaid debt.

However, a CCJ can also be issued for minor discrepancies such as missing a utility payment, a parking ticket or an unpaid mobile phone bill or if someone does not settle the debt once they have received a court summons.

Mortgage arrears are also increasingly common among people who are generally regarded as credit worthy, but miss mortgage repayments because of a life changing event. If there was a misconception that specialist residential mortgage borrowers are associated with lower income groups, then it has been dispelled by the latest report into the market by Datamonitor in June 2006, which says research has revealed that specialist residential borrowers are actually rather similar to mainstream mortgage borrowers.

Many lenders interviewed for the purpose of the Datamonitor report agreed with the fact that the specialist residential borrower is more likely to be someone who, at some point in their life, has experienced a life changing event such as divorce, temporary unemployment and sickness, which has resulted in a financial blip. While, although the Office of National Statistics says the number of divorces fell in 2005 by 8%, there were still 141,750 divorces in the UK in 2005, which is not an inconsiderable amount.

Divorce naturally dents the finances of people who go through the process and in many cases solicitors may instruct both parties in a divorce to cease payments until a settlement is reached, so couples experiencing divorce may naturally fall into arrears.

Redundancy is another life changing event that can happen to anyone and have a profound impact on their credit rating. Every economic market goes through cycles where there will be upward and downward trends, and this includes the labour market. So when there are downward trends they will generally be followed by an upward trend and many workers who lose their job during a downward trend could expect to benefit from a subsequent upward trend when they are looking for new employments.

This is something that lenders have experience of. They have built robust business plans in order to adapt to changing economic cycles and people who have experienced redundancy can benefit from the fact that specialist lenders will look at someone’s potential to pay in the future rather than a financial blip they have experienced in the past.

Personal insolvencies have also been increasing at an average rate of 13.5% each year since 1999. And, according to official statistics from the Department of Trade and Industry (DTI), individual insolvencies in 2005 increased 29.2% on 2004.

DTI figures also indicate that the number of people taking out Individual Voluntary Agreements (IVAs) is on the increase, with their number rising by 88.9% in 2005. This is because, as part of the 2002 Enterprise Act, the Government made changes to bankruptcy law that became effective from April last year 2005.

The changes were intended to help failed entrepreneurs get back on their feet quickly if their business collapsed but they also meant that it is far easier for individual consumers to declare bankruptcy as the new rules allow people to have their debts discharged after one year rather than three. Indeed, in the late 1990s, 60% of all bankruptcies concerned a failed business. Now, around 60% are caused by consumer debt.

Taking into account the growing number of CCJs, divorces, unemployed and bankruptcies it is clear to see that there is an increasing band of people who want to own their own property, are willing and able to do so but are denied the opportunity because circumstances beyond their control have affected their credit history.

The adverse credit market is an area where mortgage brokers can make a real difference and help a growing number of borrowers. At Solution Mortgages we are proactive in finding customers with less than perfect credit histories and helping them get the mortgage that they deserve. We can find solutions for people with CCJs, arrears and defaults.

Mortgage market equilibrium

Wednesday, October 17, 2007

The sub-prime sector is still seeing most of the action in the mortgage markets. The contrast between the rising rates and tightening lending criteria in the sub-prime market and the slowing down of the prime market through the stable base rate and falling swap rates.

The situation has brought the market into an unusual equilibrium whereby fixed and variable deals are priced similarly. With a year of base rate rises just behind us and the shock impact of the credit crisis, the mortgage market has fallen into a lull.

The volume of rate changes has fallen dramatically and very few providers are launching any products to differentiate themselves. The expected fall in interest rates has been reflected in the market and this should lead to an increase in demand and benefits from variable products.

Are we passed the turning point?

Tuesday, October 16, 2007

The fundamentals of the UK mortgage market looksound and it looks like conditions are now slowly returning to normal.The turmoil in the financial and mortgage markets was attributable not to an actual problem with the credit quality of UK mortgage books, but concerns among investors that UK lenders could encounter the same problems as have occurred in the US.

That ignored the fact that the credit quality of UK mortgages remains very good. Without denying that there have been some excesses at the fringes of the market and a small number of cases of consumer detriment, across the board arrears and possessions remain very low.

Latest CML data showed just 1.06% of mortgages more than three months in arrears, and 0.12% of properties taken into possession – tiny figures in relation to the more than 11.8 million mortgages in this country.

These figures are likely to increase, but we are definitely not seeing widespread delinquency among borrowers, as happened in the 1990s. While house price inflation is falling and that pattern will run through into 2008, the simple reality is that, in aggregate, demand continues to exceed supply. As this suggests the fundamentals remain sound.

People’s jobs are secure, LIBOR (off which many sub-prime products are priced) is stabilising and remains low compared with the 1990s, and Bank of England base rate is now more likely to fall than rise. There is no systemic problem in terms of either credit quality or for that matter mis-selling of mortgages. Lenders apply strict affordability tests to ensure that borrowers are able to pay their mortgages when they first take them out and in the future.

We may have passed the turning point. The securitisation markets are not fully back in business, but there is renewed appetite from investors who recognise the low risk nature of UK mortgage-backed assets. We have seen a number of private sales of loan portfolios, at less fine pricing than prior to the market disruption, but this is a clear sign that investors are now realising that the reaction was overdone.

While fully acknowledging the difficulties that do exist, it is clear we are seeing the start of a return to normality, with investors and consumers realising that the fundamentals of our market are solid and that there is no reason to stay out any longer. Shocks to the system do have an impact on everybody but confidence is beginning to return and overall we can now expect to see the mortgage market moving forward.

Opportunities for balance sheet lenders

Monday, October 15, 2007

As the recent credit crunch forces lenders to reprice their mortgage rates and non conforming lending drops, traditional balance sheet lenders could look to take advantage and expand their business further into the non conforming arena.

The proportion of non conforming mortgages arranged has fallen over the past month, with the surveys reporting a 41% drop in these products in September from 13.1% to just 7.7% of the market share.

In the wake of the financial market turmoil, lending criteria were tightened, rates were increased and fewer products remained available to borrowers.

Traditional balance sheet lenders that have not felt the full impact of the repriced risk of borrowing or increased cost of accessing funds could take advantage of the opportunity to expand into this market. The demand for non conforming products remains strong, despite heightened consumer awareness of the risks.

The fall in non conforming lending, withdrawal of certain sub prime mortgage products and tightening of lending criteria was to be expected in the wake of the credit crunch. However, balance sheet lenders could rise to the challenge this opportunity provides and further evolve into the non conforming sector, ensuring the industry provides for all of market, maintaining the wide choice of products necessary to suit different borrower circumstances. Of course, an overwhelming consideration will be for mortgage brokers to ensure that such products are both affordable and suitable for their clients.

Sub-prime borrowers must make payments

Friday, October 12, 2007

Borrowers on sub-prime mortgages should try to make all their payments in full and on time in the current climate.

For borrowers with a sub-prime mortgage, it is vital this year they make all of their mortgage payments in full and on time, and re-prioritise to reduce the loan-to-value (LTV) of their mortgage, if possible by paying extra.

This could be the calm before the storm in the mortgage markets following the slowing down in the removal of rates from the market and lenders announcing more "conservative ranges"."The temporary fall in swap rates had allowed a few lenders to enter the market with sub-six per cent fixed rates, but these now are unlikely to last long so existing good deals should be snapped up quickly.

The sub-prime market is growing into its "new skin" and higher prices are likely to follow. As many sub-prime lenders re-set their three month LIBOR on 1st October based on 1st September three month LIBOR of 6.4 per cent, they may need to keep their LIBOR tracker margins higher to make up for the last two months' higher cost of funding.

No reason to expect UK property crash

Thursday, October 11, 2007

IMLA, the trade association representing most lenders who fund themselves via the wholesale markets, has reacted to the RICS' survey published today (11 October).Latest figures indicating that house prices are beginning to ease should not be interpreted as an early indication of a housing market price crash.

It is inevitable that the housing market could experience a slowdown in activity and pricing levels following the disruption in the financial markets which led to a temporary reduction in the availability of mortgages, tightening of lending criteria and upward pressure on pricing alongside successive Bank of England interest rate rises.

With the well-publicised problems at Northern Rock, consumers have been quite understandably adopting a wait-and-see approach, not because they fear the worst but because they are unsure of what the immediate future holds. This doesn’t affect the fundamentals of the market, which remain solid. Employment remains high, interest rates remain historically low – despite recent volatility – and the economic backdrop remains positive. As far as lenders are concerned, a number have been affected by the tightening of availability of wholesale funding in the money markets and the virtual closure of the securitisation markets on the back of worries that there could be contagion over here from the US sub-prime problems.

However, this was a temporary issue and the markets are now slowly coming back to life. There is now a good supply of funds available to the consumer. Plenty of lenders have plenty of money to offer to creditworthy customers, and in most cases there’s no reason for a shortage of funds to be an impediment to normal home buying or remortgaging activity. The housing market is likely to continue to tick over at both lower and slower levels for a number of months, but there is no reason to expect any major falls in property prices.

Commercial Mortgages

Wednesday, October 10, 2007

Solution Mortgages specialise in arranging commercial mortgages and remortgages for companies, self employed traders, partnerships and entrepreneurs in order to help you raise the vital capital necessary to help your business expand and grow. The latest product range is as follows:-

• Accounts, genuine self-cert, adverse credit and investment products provide a broad spectrum of lending.
• Available up to £5 million and beyond
• 85% loan to value available across a wide range of commercial property including hotels, industrial, restaurants and pubs
• Products for Owner Occupier and Investment with a variety of fixed rate and interest only options

Other interesting features are:-

• No revisionary rates or payment shock, no rate increases for people missing payments, no double early repayment charges, no interest guarantees
• Genuine tracker products that track down, not just up
• Further advances available on all products
• Only a 3 year early repayment charge (ERC) 3% or 6% followed by 1% thereafter - consistent with the fixed rate and interest only period

Service is as follows:-

• Same day mortgage offers, same day solicitor instruction
• In house legal teams, title insurance, dedicated case managers, fast track remortgage and purchase options

If you are interested in applying for a commercial mortgage you can either apply online at www.solution-mortgages.co.uk or speak to one of our experienced staff on 0845 123 1260.

Buildings Insurance

Solution Mortgages has now launched on-line Buildings & Contents cover on its website.You can either apply for Buildings & contents cover based on the sum insured or on a bedroom rated basis.

If you know what the rebuilding cost of your property would be or if you want to be insured for a specific value for your Buildings or Contents, then click on Sum Insured where you can enter the sum yourself. If you do not understand any terms, click on the word and an explanation will appear on the bottom left!

If you do not know the rebuilding cost of your property you can apply for Bedroom Rated Insurance. This will insure you for an average figure related to the amount of bedrooms in your house.

Our Home Insurance policies are highly competitive on price and offer the following features and options:

1. Make monthly payments or annual credit card payments at no additional cost on residential policies!
   
2. Immediate cover with schedule sent within minutes of application.
   
3. Discounted premium if Buildings and Contents cover are combined.
   
4. Lower premiums if claim free for 3 years.
   
5. 24 Hour claims and emergency repair service.
   
6. Accidental damage option for buildings and contents.
   
7. Family Legal Protection option.
   
8. Personal Possessions Away From Home option.
   
9. No occupational limits.

Customers can click on the apply online button for an instant quote or call 0845 123 1260 to speak to one of our experienced staff.

GMAC close High Street Home Loans

Tuesday, October 9, 2007

GMAC-RFC has today confirmed it is to close its subsiduary High Street Home Loans. It says it informed staff of the changes at 3pm today and will now enter a 90-day consultation period.

It will be cutting 200 jobs from GMAC as well as 66 employees from Newcastle-based High Street Home Loans.

GMAC will honour all offers made by Home Street Home Loans.

They said they are not immune to the current market conditions. They have had to react by making these moves. It's a matter of survival. They will still continue to offer mortgages to all parts of the market but currently the share of the non-conforming sector is not there.

GMAC says it will re-focus its UK business tackling the changing lending environment head on and securing a strong position for the future.

It says the business will concentrate on creating cost efficiencies across its divisions and focus on further utilising its technology platform, POSO.

This comes after several reports in the market that High Street Home Loans was pulling loans amidst the market turbulence.

UK mortgage market

The UK market has been caught in the cross-fire of the US situation. A lack of liquidity in lending markets has surfaced caused by banks being less willing to lend to each other, as they are concerned as to who is holding the real losses.

Over the coming weeks it is estimated that $120bn of short-term finance, including up to $56bn of asset-backed debt, is due for renewal between institutions. Because issuers are desperate to win back investors we need to be careful that margins aren’t artificially increased in order to cushion subsequent sales of back books to the detriment of the end consumer.

This is not a situation with which we are unfamiliar, having experienced similar market problems during the end of the last recession. This resulted in some of the newer industry entrants, in particular American lenders, withdrawing from the UK market.

At times like this the value of mortgage brokers will be increasingly important, through knowledge of the strength and stability of lenders. Our concerns over smaller lenders are that they are potentially less established in the UK and could be the first to withdraw from the market in the event that they suffer in home markets.

We need to ride out the storm. Keeping calm and doing the right thing for our customers is the best way forward. It is at points in time like this that responsible lending and robust affordability criteria properly applied, come into their own.

What is certain is that in the short-term, borrowing is likely to cost more, particularly in the sub-prime markets. The pressure will increase as lenders have on-going difficulty in raising tranches of finance to fund their product ranges. In order to maintain interest in the funding of packages of securitised debt, lenders have had to increase interest rates and this has filtered down to products, which have seen marked increases in cost. It has also led to a tightening of criteria, particularly with lenders at the heavy end of the adverse market, who need to ensure that their back-books are still desirable commodities.

Website changes

Monday, October 8, 2007

Solution Mortgages will be making some exciting changes to its website over the next few days. We will be adding an on-line quotation system for buildings & contents insurance and accident, sickness and unemployment insurance.

Customers will be able to get an instant quotation on completion of the enquiry form. Should the customer wish to proceed, they can buy the cover straight away by completing the direct debit details.

More detailed information will be provided in the next few days when the changes are live on the site.

2 million rejected for loans as banks curb lending

Friday, October 5, 2007

Nearly 2 million people have been turned down for a personal loan in the last 6 months as lenders have tightened their lending in the wake of the credit crunch. The move is the latest in a series of measures by lenders hurt by the continuing crisis.

Many banks and building societies have already increased their rates on tracker mortgages in a move to pass on the increased borrowing costs to customers.

This week 9 lenders have increased the cost of a personal loan by as much as 4 basis points.

1.91 million adults were turned down for an unsecured loan between April and September 2007 up from 1.39 million who were rejected in the previous 6 months. Lenders have been hit with bad debts with borrowers unable to repay their loans and are tightening their criteria. A combination of the credit crunch and the Bank of England raising interest rates has hit borrowers' ability to repay and lenders are reacting.

Banks fund many personal loans in the wholesale money markets, where the cost of borrowing has soared as a result of the credit crisis.

There is an estimated 12 million adults with £66 billion worth of personal loans outstanding in the UK. This is twice the amount of debt taken out on credit cards and 6 times the amount people have on overdrafts.

Credit squeeze will hit the UK economy

The credit crunch will no doubt have an effect on the UK economy and the Chancellor looks set to down-grade his growth forecasts for 2008.

The Chancellor is expected to down-grade his 2.5% to 3% growth forecast for 2008 in the pre budget report next Tuesday.

It is less than 2 months since the current situation occurred and therefore looking forward it would be prudent to be cautious.

It would be fair to say that the US sub-prime lending turmoil and resultant credit tightening would affect all Western economies. The importance of the US economy and the effect on the availability of credit in the UK would confirm this.

Lenders are expected to be more cautious because of the credit squeeze which could impact the housing market. Analysts are now expecting 2008 GDP growth at 2.2%.

UK interest rates left unchanged

Thursday, October 4, 2007

The Bank of England left interest rates unchanged today at 5.75% today amid growing speculation that a weaker housing market and continuing turmoil in credit markets will soon force it to ease policy.

The decision marked the third meeting in a row that the monetary policy committee has left rates on hold, having raised them five times since August last year in a bid to cool an overheating economy.

But with Halifax reporting earlier today that house prices suffered their first fall this year in September, there is a growing feeling in the City that a slowdown in the economy is already underway, one that can only be exacerbated by the credit market crisis which sparked the run on Northern Rock.

Solution Mortgages September completion times

In September 2007 Solution Mortgages Limited's average remortgage completion time from initial enquiry until completion was 23 working days.

This is in light of the recent credit crisis and lenders being more choosy of who they lend to.

Jamie Smith, Completions Manager said, "the last two months have been difficult as lenders seem to be reviewing cases even more than they usually would. This coupled with postal strikes has realy tested us, but we are still achieving reasonable completion times".

Debt consolidation

Wednesday, October 3, 2007

If you have a number of debts or loans that you are trying to make repayments on each month then you may find it beneficial to look at a debt consolidation remortgage.

A consolidation remortgage is ideal for those who want to make just one monthly repayment instead of several, and wish to try and reduce the amount that they are paying out each month. With debt consolidation you can often reduce your outgoings significantly, as the repayment on your consolidation remortgage is far lower than the collective repayments on your existing high interest debts such as unsecured loans or credit cards.

If you wish to consolidate debt you can enjoy a range of lenders and a number of different remortgage deals to suit different needs regardless of your credit history. Remortgages for debt consolidation are available to homeowners with a certain level of equity in their homes and those we meet the various lenders’ eligibility criteria in order to qualify for a consolidation remortgage.

You may have found that you have been unable to get a consolidation remortgage in the past due to mortgage arrears, CCJ's or have been made bankrupt. Your debt levels may have been too high to get a consolidation remortgage, or your credit rating may be too poor. Solution Mortgages can help in this situation as the lenders we deal with will consider applications from people with poor credit.

If you do qualify for a debt consolidation remortgage you need to make sure that once you have consolidated your smaller debts you do not run up further debts, as this will put you in a difficult financial position. If you do run up further debts you will end up having to repay your debt consolidation remortgage and the additional debts that you have accrued, so this is a temptation that you should definitely resist in order to benefit from consolidation.

If you are interested in discussing a debt consolidation remortgage speak to Solution Mortgages on 0845 123 1260 or apply online at http://www.solution-mortgages.co.uk/ to find out if we can help.

Packagers need to take action

Tuesday, October 2, 2007

Packagers are going to have to make some tough decisions in the near term in order to make sure their businesses will be able to withstand the outcome of falling business levels.With applications to packagers down by 35% in September, packagers need to make tough decisions on staffing levels sooner rather than later because by taking prudent action now, packagers will be in better shape to benefit from the upturn when it comes.

The market has taken a significant hit and at the moment there seems to be no easing of the pressure on funding. Packager business has seen significant falls since the credit squeeze started and we are now looking at a situation where we are unlikely to see any upturn before the start of next year at the earliest.

We would expect to see redundancies in the region of 20% to 30% in the weeks to come from firms planning far enough ahead to be in a position to both weather this crisis and take advantage of the upturn when it comes. On current projections, packager income could fall by up to 60% by Christmas and those companies that will come through are those who see that prudent action needs to be taken now to ensure survival.

Even allowing for the unique nature of the problem, lenders have not helped the situation. Conversion rates have been badly affected by the panicked way in which products have been pulled, totally impractical deadlines have been arbitrarily set which in turn have not been helped by the deliberate use of inflexible and unreasonable underwriting to ensure intermediaries and packagers had no chance of getting business in to meet those deadlines. And don’t get me started on lenders who simply exited the market and left clients and intermediaries high and dry.

Lenders who until recently have been so desperate to court intermediaries and packagers when they wanted to sell their products, have shown in many cases that their relationship with packagers and intermediaries are really only skin deep. When the market recovers, it will be interesting to see how intermediaries will respond to these lenders when they decide they want to do business again.

Uk house prices

Monday, October 1, 2007

UK property prices remain strong despite the problems in the mortgage market.

Land Registry figures released today show house prices were broadly steady in August, and calculations indicate the trend is set to continue. Despite many lenders increasing their mortgage rates following the tightening of credit markets, the housing market showed resilience.

It has been a dramatic month for the UK financial markets, and consumer confidence has undoubtedly taken a hit. But it’s important to look at the bigger picture. As the liquidity squeeze eases, short term money market rates are coming down again. This makes it easier for lenders to offer rates which are attractive for buyers.

Although borrowers have been under pressure from rising rates, as the LIBOR rate falls the banks are beginning to offer lower variable rates again. There are also many attractive fixed rates still available for homebuyers.

Confidence in the property market is stable. Predictions that house prices will remain on a level, even increasing slightly month on month, reflects continued demand for property.

While the rate of growth has dropped dramatically in response to earlier base rate rises this year, the sustained resilience of the residential property market should be encouraging for everyone.