Building Societies feeling the credit crunch

Monday, March 31, 2008

Building Societies are now feeling the credit crunch as a range of lenders have withdrawn products in recent weeks.

Lenders are now targeting low loan to value (LTV) business as there are less risks associated with this type of business.

Many smaller building societies have been inundated with business and can not cope with demand and have also been withdrawing products. Some have withdrawn all of their ranges.

In the last month the availability of residential and buy to let products has dropped significantly.

Credit scoring is tighter and maximum loan sizes are being reduced which is making it harder and harder for people to get mortgages.

Some lenders have restricted lending by reserving its best deals for those with a 25% deposit.

Other lenders have dropped the maximum LTV on self-cert business and buy to let to 75% and will not lend to first time buyers on self cert or sub prime, or to first time landlords on buy to let.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at http://www.solution-mortgages.co.uk/

Slow to react

Friday, March 28, 2008

The current economic situation is grim. Mortgage rates are rising, lenders are looking for reasons not to lend, the housing market looks unstable and the cost of fuel and energy prices is of grave concern.

What does the government seem to be doing about this? Very little.

The current liquidity crisis needs urgent attention. The government's working party to ease liquidity problems is something that should have been established already.

Instead of urgent action we will have a report in the summer and proposals in time for the next pre-Budget report.

Decisive action is required now. The whole handling of the Northern Rock affair shows how misplaced this government is. The government has effectively become a lender having nationalised Northern Rock and the Bank of England has been extremely slow in cutting interest rates.

If you look at America and the way the Bear Stearn's debacle was handled, this was far more encouraging. It was dealt with swiftly without US taxpayers bearing the risk of nationalising a bank. The Federal Reserve has also reacted by slashing interest rates to try and free up some liquidity in the system which may or may not be the answer, only time will tell. The point is they seem to acknowledge the seriousness of the current climate.

The UK government seem to be more worried about the price of bread and the self imposed 2% inflation target. In the recent budget, at a time when the economy is in dire need of a shot in the arm, all the chancellor did was fiddle with taxation on booze and cars while pining once again after long term fixed rate mortgages.

The housing market which is the bedrock of the economy could have benefited from measures to help more first time buyers onto the property ladder. An increase in the minimum Stamp Duty threshold would have helped thousands of would be buyers. As ever the government did nothing!

The handling of the current crisis is yet another nail in the coffin for this government. I certainly know who will not be getting my vote at the next elections!

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at www.solution-mortgages.co.uk

Rate cut on the cards

Thursday, March 27, 2008

An interest rate cut is on the cards to help out homeowners who are finding things more and more difficult with the rising energy bills, higher petrol prices and lack of available mortgages.

The threat of inflation is still an issue and is in danger of hitting the 3% limit imposed by the treasury but the global credit crisis is more pressing and a rate cut is still possible.

If inflation exceeds the 3% target the governor of the Bank of England is forced to write a letter to the chancellor with an explanation.

In this circumstance the Bank of England's Monetary Policy Committee (MPC) would raise interest rates to stave off inflation pressures.

Instead the MPC may take the unusual step and lower rates due to the turmoil in the global economy and also the threat of recession in the UK.

A cut in interest rates will be a welcome reprieve for most homeowners who have found recent months increasingly difficult to cope with financially as economic conditions have deteriorated.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us online at www.solution-mortgages.co.uk

Arrears on mortgage

Wednesday, March 26, 2008

Your mortgage is likely to be the largest amount of credit you ever borrow in your lifetime. As this credit is taken over such a long period of time there are many obstacles that may arise over the period that you are not expecting such as redundancy, divorce or prolonged illness. These may not be things that we think about when we initially take out a mortgage but these factors should not be overlooked.

The problem is that if you miss payments on your mortgage you will find it more difficult to get credit in the future. If you do not keep up the repayments on your mortgage it could lead to your home being repossessed.

Mortgage lenders usually view mortgage arrears as follows:-

• A missed payment will be recorded if you fail to make 75% of the amount due in that given month
• Some lenders take into account missed payments on secured loans and your main mortgage
• More recent missed payments will be held as more relevant than older ones
• Some schemes require you to pay any arrears up to date before any further financial support is forthcoming
• The more payments you have missed the ‘higher risk’ you will be classified

Once you have incurred arrears on your mortgage it is unlikely that more traditional high street lenders will be willing to help you. This is due to the risk of default in the future.

At Solution Mortgages we have access to a range of specialist lenders who will consider applications from applicants who have incurred arrears on their mortgage. They will also consider applicants who have CCJ's, IVA's or been made bankrupt.

If you have arrears on your mortgage and are looking to remortgage, please feel free to contact Solution Mortgages on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Debt consolidation services

Tuesday, March 25, 2008

If you are looking for debt consolidation services, look no further than Solution Mortgages.

We offer debt consolidation services which will allow you to clear your debts and reduce your monthly outgoings.

In modern society it is to easy to get into debt. Banks have been offering cheap credit for years in the form of unsecured loans and credit cards. Now things have changed dramatically and the era of cheap credit has all but come to an end.

For those people who have taken out large amounts of credit over the last 10 years are now finding that the interest rates on loans and credit cards are increasing and trying to consolidate debts with other unsecured borrowing is impossible.

If you are in this situation you will know that interest rates on credit cards, store cards, overdrafts and car finance is much higher than on your mortgage.

Our debt consolidation service allows you to pay off these other loans and reduce your monthly outgoings by consolidating them into your mortgage. The saving can amount to hundreds of pounds each month.

However, bear in mind that you will be securing these previously unsecured debts to your property and you will probably be repaying these debts over a longer term and therefore it is likely you will end up repaying a higher amount in the long term. You must also remember that failure to keep up with the repayments will result in your property being repossessed.

We should be able to help you regardless of your credit history. Whether you have a poor credit rating, CCJ's, IVA's or even bankruptcy you should still consider calling us for our debt consolidation services.

If you require debt consolidation services, please call Solution Mortgages on 0845 123 1260 or apply on line at www.solution-mortgages.co.uk

More mortgages disappearing from the market

Thursday, March 20, 2008

People who are looking to purchase a property or remortgage in the current climate, need to act fast.

Lenders are changing products and criteria on a daily basis as they wrestle with liquidity issues and problems with pricing.

The mortgage market is changing rapidly and you need to try and ensure that you act fast to try and complete the deal as soon as you can to avoid disappointment.

There are limited funds around at the moment and products are not being withdrawn without reason.

In the sub prime sector it is becoming ever harder to place business and if you have more than 3 arrears in the last 12 months you will really struggle to find a lender. Our lender panel has been whittled down to 5 lenders who are actively writing business at the moment.

However we are still managing to complete mortgage business for clients and although it is an uphill struggle the fact that we have in house underwriters for these main lenders we are still achieving good completion times.

If you are in need of a bad credit, poor credit, ccj, or problem remortgage or debt consolidation services, please do not hesitate to get in touch with Solution Mortgages on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Interest rates could be cut early

Wednesday, March 19, 2008

There is talk that interest rates in the UK could be cut in April, earlier than expected.

This is in response to further deterioration in the money markets in the last few days.

The Monetary Policy Committee (MPC) members voted 7-2 to leave rates on hold last month. The fact that 2 members voted to cut rates last month is a sign that rates could be reduced to 5% next month.

The ongoing deterioration in the credit markets is sufficient for the MPC to act as the prospect of recession far outweighs the prospect of rising inflation. This crisis is serious and rather than worrying about the price of bread they should act swiftly.

The pound is weak, the credit markets are still effectively shut and UK families are struggling.

While the US Federal Reserve are slashing interest rates, the Bank of England seem to be doing little, preferring to worry about the governments 2% inflation target. Now we do not necessarily agree entirely with the US tactics which unfortunately we believe is a great contributor to the current situation.

Although the crisis is being blamed on poor lending practices in the US, there is no denying that the Federal Reserve took interest rates to low back in 2003 and then had 17 consecutive rate rises. This was obviously going to hurt US families as those who had taken out mortgages when rates were low would be struggling when rates were raised rapidly. They are by no means immune from blame. In the UK the government would prefer not to have this type of boom and bust economy and prefer more stability.

An interest rate cut in the UK would be welcomed by all and with any luck we may receive one earlier than we were previously thinking.

if you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at http://www.solution-mortgages.co.uk/

Mortgage arrears problems up by 35%

Tuesday, March 18, 2008

Mortgage arrears have increased by 35% in the first 2 months of 2008 said the Citizens Advice Bureau.

This was coupled with an increase in arrears on essentials such as utilities, telephone bills and council tax bills.

The higher cost of living is making it a real struggle for many families and the number is growing rapidly.

Debts on credit cards and store cards are the largest proportion of debt as well as problems with overdrafts.

These sharp rises are extremely worrying and paint a bleak picture of the economy. While the credit crunch shows no signs of abating, the UK government shows few signs of tackling the situation. They seem to be more worried about the cost of bread (ie inflation) and sticking to their 2% targets than addressing the finance sector which in turn would be able to ease the pressure on UK families. The Federal Reserve in the US has been aggressively cutting interest rates to try and shore up the economy while the UK government is taking a wait and see approach.

The problem is the deterioration in the finance sector is seemingly being underestimated by the UK government who should take action now. The longer they leave rates unchanged the more damage they are doing to the economy and should worry about their inflation target when their are signs of stability in financial markets.

Debt is now the number one issue in the UK and a cut in interest rates will ease the pressure on UK families.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at www.solution-mortgages.co.uk

Finance for construction projects

Monday, March 17, 2008

The market for new construction is wide, ranging from those who wish to develop a small plot of land to those companies who develop major residential estates and commercial sites.

In general, the market for commercial development is less volatile than that for residential development. Residential property is vulnerable to interest rate increases and during times of economic downturn the market can become flat, with fewer people prepared to commit to buying property.

The commercial market is perceived as less volatile. In general, changes to interest rates usually pose fewer problems for businesses, as many lease their premises and their rent is fixed for a set period. At present the market for office property is buoyant, with demand in many areas outstripping supply. Demand for other types of commercial property is also strong, although their are the inevitable regional variations.

If you are considering purchasing or remortgaging a commercial premises, please feel free to contact Drew Mitchell at Commercial Lending on 0845 123 8900 or visit our website www.commlending.co.uk

Selecting a commercial property

Friday, March 14, 2008

Commercial property is usually advertised in the local and national press, estate agents, trade press and magazines. The internet is also proving a popular place to advertise commercial property.

When selecting a property, a number of factors should be considered before making a choice.

You should consider the ideal type of property for the business, while compromise may be necessary to an extent, the building should be suitable for the business.

You should make sure the business will be able to operate from the premises. Some properties are subject to restrictions on the types of business they can accommodate. In other cases, the local authority may be required to authorise a change of use.

It is worth remembering that many companies buy premises that suit their needs at the time, but expand rapidly, soon outgrowing the premises. Therefor the amount of space needs to be considered.

What facilities does the premises offer? This would include parking, the availability of utilities, the type of heating and so on.

The environment needs to be considered, meaning staff comfort and the impression given to customers.

The Local Authority expenses and running cast is also a major factor to think about. Business rates and local authority charges will vary between areas. High charges and running costs will put a strain on the company and may make a future sale problematic.

If you have any questions on this article, please feel free to contact Drew Mitchell at Commercial Lending which is the dedicated commercial mortgage arm of Solution Mortgages. He can be contacted on 0845 123 8900 or by e-mail on drew@commlending.co.uk or visit the website http://www.commlending.co.uk/ for more information.

Launch of Commercial Lending

Thursday, March 13, 2008

Due to the large number of commercial mortgages that Solution Mortgages has been undertaking we have decided to launch a dedicated commercial mortgage arm called Commercial Lending.

Commercial Lending is headed up by Drew Mitchell who has recruited an experienced team of commercial mortgage brokers. The team has over 15 years of commercial mortgage experience, so you can rest assured that you are in safe hands.

Commercial Lending 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.

If you're looking to achieve any of the following:

• Purchase a new business or a new business property
  
• Raise funds for vital refurbishment, machinery, stock or the capital to expand your business
  
• Restructure your finances and repay any business or short term debts you may have accrued in the past
  
• Or remortgage your commercial property to raise cash for any other purpose

If you are considering a commercial mortgage speak to Drew Mitchell at Commercial Lending on 0845 123 8900 or visit our website at http://www.commlending.co.uk/

ASU Insurance

Wednesday, March 12, 2008

Solution Mortgages now offer Accident Sickness & Unemploymnet Insurance (ASU insurance) through it's website www.solution-mortgages.co.uk

We do not offer advice on insurance products however it is prudent for any new loan borrower to protect themselves against the possibility of loss of earnings due to accident sickness or unemployment. This insurance is not compulsory and your loan application will not be prejudiced in any way.

Your Demands

You would like some or all of your loan repayments to be paid if you become involuntarily unemployed or ill.

Your Needs

You do not have any way to pay your loan if you have any accident, become sick or are involuntarily unemployed.

Eligibility

To be eligible for this insurance policy you must be :-
Either the first or second named borrower on your loan offer.
Over the age of 18 and under 65 (male) 60 (female) and live and work in the UK.
Working for 16 hours a week or more in permanent employment (or self employment) which is not of a seasonal nature.
Not aware of any impending unemployment or redundancy.

Exemptions Limitations and Conditions you should be aware of (This is not an exhaustive list)*

You cannot claim for unemployment that is any way voluntary or willful or if you are dismissed for gross misconduct.
You will not be able to claim for anything you already know about such as an existing medical condition and/or impending unemployment/Redundancy*
You will no be able to claim for anything which is caused by any illegal act on your part (such as suicide or imprisonment), or anything which is caused by any deliberate act on your part (such as pregnancy, self inflicted injury, alcohol abuse, drug abuse or elective plastic surgery)*

If you would like to discuss Accident Sickness & Unemploymnet Insurance, please feel free to contact Solution Mortgages on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Solution Mortgages - Pre budget hopes!

Tuesday, March 11, 2008

The mortgage market is still reeling from the emergence of the credit crunch last August. When the chancellor, Alistair Darling makes his Budget speech tomorrow, we will all be waiting with bated breath.

It will be made by the first chancellor to preside over a run on a UK bank since savers lined the streets outside Overend, Gurney & Co in 1866.

At Solution Mortgages, like the majority of mortgage brokers in the UK will be hoping for a mortgage market friendly budget.

The global credit crisis has the potential to bring the home buying process to a standstill and there is a danger that the first-time buyer and seller markets could collapse.

The crisis has forced some lenders to pull back from the 95% LTV market and those offering 90% LTV are becoming diminished.

First time buyers are the life blood of the UK property market but also related industries such as mortgage intermediaries, surveyors, estate agents, plumbers and decorators.

Stamp duty is a big factor in any house purchase as it has not kept pace with rising house prices. We would like to see a change in the threshold for stamp duty and scrapping it for first time buyers.

Also tax breaks for lenders to in turn encourage social responsibility would be welcomed especially with a rise in repossessions looming.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260, or visit us online at www.solution-mortgages.co.uk

Treating customers fairly

Monday, March 10, 2008

At Solution Mortgages Limited we are committed to offering our customers the highest possible standards of service, In doing so we are pleased to support the Financial Services Authority initiative ‘Treating Customers Fairly’.

We recognise that both we and our customers have everything to gain if we look after your best interests and treat you fairly in all aspects of our dealings with you.

Our commitment to you

We will:

provide you with clear information about the products and services we offer including fees and charges

ascertain your individual needs, preferences and circumstances before providing you with product details

provide you with a swift and courteous service

encourage you to ask if there’s something you don’t understand

give you access to a formal complaints procedure should you become unhappy with our service


How you can help us

To help us give you the most appropriate information, we will ask you to:

tell us as much as possible about your circumstances, risk attitudes and objectives, including details of income and outgoings, to enable us to properly assess how much you can afford

let us know about changes that might affect your ability to maintain a product, in particular to repay a mortgage

let us know if there is any aspect of our service, or of a product we have provided you with details on, that you don’t understand

tell us if you think there are ways we can improve our service

If you have any questions about this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at www.solution-mortgages.co.uk

Remortgaging with CCJ's

Friday, March 7, 2008

Trying to arrange a remortgage when you have a County Court Judgement (CCJ) registered against you can be problematic. However, if you speak to Solution Mortgages, a CCJ remortgage specialist which should still be able to help you.

At Solution Mortgages we have access to a panel of lenders in the UK who will consider people with current and historic CCJs.

If you have a an unsecured loan or credit card and have failed to keep up with your payments, the creditor (a person or company to whom you owe money), must issue you with a “default notice” before they take legal action. A default normally occurs when the terms of a credit agreement have not been met and the account is 3-6 months in arrears.

The creditor can start court proceedings if you do not comply with the default notice and this can lead to the registering of a CCJ.

The County Court will make an order that you must repay the debt and this will then be listed on your credit file. In Scotland a CCJ is known as a “Decree” and is issued by the local Sheriff Courts.

If you receive notification of a CCJ, you will have one month in which to pay the amount in full before the CCJ becomes registered with the Register of County Court Judgements. Once the CCJ has been registered, even if you pay it in full at a later date, it remains on your credit file for six years.

This will impact your ability to get credit in future from traditional sources such as high street banks. However Solution Mortgages use lenders who will consider applications from people with CCJ's and have criteria which defines the interest rate based on the number and size of the CCJ's.

If you would like to discuss a CCJ remortgage, please feel free to contact Solution Mortgages on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Interest rates left on hold

Thursday, March 6, 2008

The Bank of England have decided to leave interest rates unchanged at 5.25% today which will provide disappointment for many mortgage holders.

Many had hoped the Monetary Policy Committee (MPC) would cut rates but we may have to wait until next month now.

The main reason for not cutting rates is likely to be the threat of inflation from rising food, fuel and energy prices and seems that this is the MPC's primary concern.

However the poor economic backdrop cannot be ignored and rates will have to come down to stop the economy grinding to a halt.

The harsh stance also gives little comfort as to what lies ahead in next weeks budget.

The rates cuts of 0.5% that we have had since the credit crunch is in stark contrast to the 2.25%
cut that the Americans have experienced. The recent cuts in the UK have had little effect on the pressure on banks and have not benefited consumers at all.

A third cut would likely be enough for lenders to pass this onto the consumer and make mortgage payments more affordable.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us online at www.solution-mortgages.co.uk

How to avoid mortgage arrears

Wednesday, March 5, 2008

Many mortgage borrowers face the risk of going into arrears on their mortgage this year. The credit crunch with higher costs of borrowing and rising energy and fuel costs are starting to hurt homeowners.

Whatever you do, your mortgage needs to take preference but if you are struggling you should look at your current mortgage and address the situation.

With rates on unsecured loans and credit cards rising, the servicing of these debts is pushing many budgets to breaking point.

Repossessions are on the rise and this looks set to continue in 2008. They are at the highest number since 1999.

You need to act fast if you think that you are going to struggle to cope with these rising costs.

Many peoples low-rate fixes from 2002 and 2005 are due to expire soon and most will receive a payment shock due to the rise in interest rates and also the rate of their current lenders standard variable rate.

Here are some things you could consider to avoid those shocks and avoid incurring any arrears:-

LOOK FOR ANOTHER MORTGAGE DEAL

This is the simplest and the most effective way to reduce your outgoings. If you have bad credit you can speak to Solution Mortgages to look at what rates are available to you. You will have to move quickly to get the best deals as lenders are changing their criteria all the time in the wake of the credit crunch and although things may get better in time no one really knows.. If you delay as your existing deal reaches the end of its term, you risk being moved on to your lender's standard variable rate which will be extremely expensive. If you are struggling with your finances you should always make your mortgage a priority and get on to a low rate fast.

CONSIDER INTEREST-ONLY

Switching from a repayment to interest-only mortgage will bring the monthly mortgage bill down. Going interest-only should be considered as a short term option to lower your payments as you are not paying the capital of your mortgage, so will still owe the same amount as you originally borrowed.

Remember your outstanding debt will still have to be repaid at the end of the mortgage term, so you shouldn't get used to lower payments unless you are sure you can save enough to clear the debt or have a plan in place to repay the debt such as selling the property or an endowment etc

THINK ABOUT EXTENDING YOUR TERM

This can give modest relief on monthly bills while retaining the security of a traditional capital repayment mortgage. Most repayment mortgages are structured on a 25-year term. A little capital is repaid alongside the interest each month which reduces the debt.

By extending the term you reduce the amount of capital you pay each month and therefore make the rise in interest rates more manageable.

Most lenders are now flexible and will let loans last up to and even beyond the standard retirement age. However if you are extending your mortgage into retirement you must be aware that it is still your responsibility to pay your mortgage even if your income has been reduced.

If you wish to discuss any of the above options, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us online at http://www.solution-mortgages.co.uk/

Remortgage - debt consolidation

Tuesday, March 4, 2008

If you have debts owing to a range of creditors and you are paying multiple payments each month which are becoming unmanageable, you may wish to consider a debt consolidation remortgage.

Debt consolidation is when you take your outstanding debts and consolidate them into one payment which has a lower interest rate than you are currently paying. This therefore lowers your monthly repayments and makes life easier.

A debt consolidation remortgage will carry a lower interest rate than any unsecured loan or second charge loan as a first charge mortgage provides better security for the lender which means they can offer a lower interest rate.

Securing your debts against your property needs to be considered carefully as failure to keep up with your payments will lead to repossession. You may also end up paying more for your debts by spreading them out over a longer period.

At Solution Mortgages, our experienced mortgage consultants will provide you with all the information you need to choose the right debt consolidation remortgage to suit you.

Solution Mortgages specialise in debt consolidation re-mortgages and have helped many people who have a bad credit history secure a remortgage to consolidate existing debt.

Whether you have County Court Judgments (CCJs), defaults, arrears on your mortgage or a poor credit rating, we should still be able to find a solution for you.

Solution Mortgages use a panel of specialist lenders who will consider applications from people with a poor credit history and we will do our utmost to find the right solution for you

If you are considering a debt consolidation remortgage please feel free to speak to Solution Mortgages on 0845 123 1260 or apply online at www.solution-mortgages.co.uk

Sub prime remortgage

Monday, March 3, 2008

If you are a homeowner and are contemplating a remortgage of your property, you may find it more difficult if you have a poor credit history.

County Court Judgements (CCJs), mortgage arrears, defaults, bankruptcy, or having no proof of income all affect your credit rating.

Adverse credit will certainly make it unlikely that many traditional high street lenders will be able to help you, but there are other options available and these are called sub prime or adverse credit remortgages, which, depending on your circumstances, may provide the finance solution you are looking for.

At Solution Mortgages we specialise in helping people obtain an adverse credit remortgage. A remortgage is a loan, in the same way that your original mortgage is, secured against the value of your home. It replaces your old mortgage, and the benefit of having an adverse credit remortgage is that it will offer you the chance to repair your credit history.

Finances are unpredictable at the best of times and nowadays more and more people are finding themselves unable to cope with their present financial arrangements and mortgage lenders have seen this by increasing the product range of mortgages available to people with adverse credit.

Solution Mortgages will take care of the whole remortgage process for you including dealing with any third parties such as surveyors and solicitors.

If you would like to discuss an adverse credit remortgage, please feel free to contact Solution Mortgages on 0845 123 1260 or apply online at http://www.solution-mortgages.co.uk/