Getting a mortgage

Gone are the days when a building society would happily buy the novice homeowner a three-bedroom house to do up and sell on. As of this week, the 100 per cent mortgage is extinct.

If you want to get a foot on the property ladder, you must do so with a great big deposit, amid soaring interest rates (despite the Bank of England cutting them) and a sense that the country is on the verge of financial collapse.

Can’t Get A Mortgage – What to do is a post from: My First Home Blog

We don’t all get the chance to road test a property before we buy, as on To Buy or Not to Buy. But if you’ve decided that it’s time to buy, be it at home or abroad, understand the game, know the dangers, and calculate the costs before you put in that offer

Here’s the breakdown of the various costs involved when buying a home:
Home Buying Costs: The Deposit | Conveyancing Costs | Stamp Duty

The Valuation and Survey Costs: Mortgage Lender’s Application Fee | Land Registry / Local Authority Search Fees | Insurance Costs | Mortgage Indemnity Insurance

Buildings and Contents Insurance: Mortgage Payment Protection Insurance | Moving In Costs | Furnishing, Re decorating etc

Moving in / Removal: Running costs to bear in mind

The Average Deposit Monthly Payment on a £200000 House? is a post from: My First Home Blog

According to mortgage sourcing specialist, Mortgage Brain, over 2,600 new home loans have been introduced since April 2010, taking the total number of live products on its system to 7,320.

However, September saw a 4% decline in availability, as 298 products were withdrawn.

The number of fixed-rate deals fell by 7%, to 4,667; trackers put in a slightly stronger showing at 1,668 products, while variable rate availability continued to grow, increasing for the tenth consecutive month, to 985 products.

Mortgage Brain chief executive, Mark Lofthouse, comments: “Despite seeing a slight dip in product availability during September, the longer term analysis clearly shows that the UK mortgage market has shown real and significant improvements in terms of product choice and availability.”

Mortgage Brokers See ‘Surge’ in New Deals is a post from: My First Home Blog

The reversal of Housing Equity Withdrawal (HEW) is continuing to accelerate, with homeowners repaying mortgages rather than increasing them, according to the latest figures from the Bank of England.

HEW was -£6.2bn in Q2 2010, slightly more negative than the Q1 2010 figure of -£5.3bn (revised down from the previous published figure of -£3.2bn).

Since Q2 2008, when the HEW measure first turned negative, individuals have now repaid a total of £44.2bn back into housing equity.

HEW as a percentage of post-tax income was also slightly more negative than the previous quarter, at -2.5% compared to -2.1% in Q1 2010 (down from the previously published -1.3%).

Source: http://www.bankofengland.co.uk

Housing equity withdrawal continues negative trend is a post from: My First Home Blog

Usually your house is the biggest purchase of your life and according to that the mortgage or the loan that you have to take to purchase it, is also going to be the largest you will ever borrow. Thus, you must calculate in advance how much you will exactly have to pay towards the mortgage. The loan mortgage calculator helps you with this calculation. You can specify the details of your mortgage such as the interest rate and mortgage term, and the calculator calculates how much you have to pay every month and a lot of other information that will greatly help you.

As per what you need to find out, you can choose from various calculators – some of them are as follows :

1. Monthly payment calculator: This calculator helps you calculate how much you have to pay on a monthly basis. You get information about which loan you should opt for as you can find out in advance how much you have to pay every month if you opt for a particular loan.

2. Interest only mortgage calculator: In some cases the mortgage loan requires you to pay only the interest for a particular period of time. After that, the monthly installment that you pay goes towards paying for both your interest and the principal amount. This calculator calculates the standard monthly payments as well as the interest only payments. This helps you to get a fair idea of what you are to pay towards the interest and what you are to pay while paying for both principal and interest.

3. Adjustable rate mortgage calculator: This loan mortgage calculator starts with lower interest rates and thus lowers monthly payments. However, you should keep in mind that the risk remains that the interest may increase in future.

4. Amortization schedule calculator: This calculator is used to calculate what amount, from the monthly payments you make, goes towards the principal and towards the interest. This calculator can be used to find out how much you need to pay to reduce your principal amount. With the help of the calculator you can accordingly increase your monthly payment amount. This helps you to pay off your debt faster as your loan term reduces.

4 common types of mortgage loan calculators is a post from: My First Home Blog

The number of mortgages behind with payments also fell. As at the end of June there were 178,200 loans with arrears equivalent to 2.5% or more of their mortgage balance. This was 5% lower than at the end of March, and 17% lower than a year earlier.

The continuing welcome decline in payment problems has led the CML to revise its forecasts for arrears and repossessions in 2010 as a whole. The CML now expects 175,000 mortgages to end the year 2.5% or more in arrears, compared with the previous forecast of 205,000. A total of 39,000 repossessions is now forecast for 2010 as a whole, compared with the previous forecast of 53,000.

However, there is no room for complacency looking further ahead. The headline arrears figure masks differences in the experience of different arrears bands. For example, in the lowest arrears category (between 1.5% and 2.5% of balance, or £1,500 to £2,500 on a £100,000 mortgage) there has been a marked improvement from the peak in the first quarter of 2009, when 1% of all mortgages were in this category, to 0.7% now. But in the highest 10% or more arrears category, the proportion of mortgages has remained almost static at 0.23% (compared with the peak of 0.24%).

In the higher arrears categories, some mortgages will have improved, and returned to lower categories, while others will have worsened and followed through to repossession, and will in turn have been replaced by other mortgages flowing up from lower arrears bands where arrears are worsening.

It is notable that, unlike the lower arrears bands, the higher bands are showing less of a decline, suggesting that there is still a significant segment of borrowers whose arrears may have been stabilised through lender forbearance or other support, but whose situation is not improving enough to enable them to claw their way out of problems. These finely-balanced arrears cases are the ones who may be at most risk of tipping into repossession if there are negative changes such as higher interest rates or reduced benefit support.

CML director general Michael Coogan said: “Mortgage difficulties have so far been contained at lower levels than we expected at the start of the year, and by comparison to the 1990s recession.

“However, the safety net for borrowers is weakened by the prospect of higher interest rates, a possible rise in unemployment, a counter-productive stigma hanging over mortgage payment protection insurance, uncertainty over future debt advice funding, reduced government support for mortgage payments, and mortgage rescue schemes being reviewed as part of the deficit reduction plan.

“While we don’t want to cry wolf, it seems obvious that the ongoing prognosis for arrears and possessions is far from a healthy all-clear. We hope the coalition government will not risk undermining the chances of extending the welcome trends this year by removing support mechanisms that work.”

Source: http://www.cml.org.uk

A decline in arrears and repossessions – CML Reports is a post from: My First Home Blog

The Bank of England’s Monetary Policy Committee  voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

The Committee’s latest inflation and output projections will appear in the Inflation Report to be published at 10:30am on Wednesday 11th August.

The minutes of the meeting will be published at 9.30am on Wednesday 18th August.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5th March 2009. A programme of asset purchases financed by the issuance of central bank reserves was also initiated on 5th March 2009. The most recent change in the size of that programme was an increase of £25 billion to a total of £200 billion on 5th November 2009.

Interest rates: Bank continues to hold interest rates at 0.5% is a post from: My First Home Blog

Many firms are putting out a great deal of money in conducting researches to know the neurologic basis from which customers decide in buying a property or paying a service. In this noble pursuit, many of these firms failed to recognize and utilize available information that are handed free of charge by many customers who are more than willing to share their personal feedback.

Broker price opinion or BPO references a strategy utilized by mortgage lenders to acquire property value. Broker price opinion reports are mostly used by bank loss moderators to obtain estimated property values of homes in pre – foreclosure or short sale. Moreover, they are also used instead of traditional property appraisals when borrowers request a loan modification.

Home values obtained through broker price opinion are based on predetermined factors. These predetermined factors include property location, property condition, square footage, lot size and assessment of other homes in the area. Home prices are based on comparative analysis of the neighborhood as well as property condition. Property value declines when bank owned and foreclosure properties are in the area.

There are two types of Broker Price Opinion available to mortgage lenders. These two are drive-by and internal. Both types provide estimated property value along with estimated repair costs. Because of this fact, almost all lenders depend on broker price opinion reports to determine if real estate qualifies for the intended transaction.

The two types might have been designed for the said purpose and yet, there are still differences between the two. Drive-by broker price opinions are conducted by licensed real estate brokers who drive by the property to gather information. That is – brokers provide an estimate of the home’s square footage, number of rooms and lot size. Reports of brokers also document the homes exterior condition, approximate age and the available parking. More than that, it also includes information about the neighborhood. . Lenders want to know the number of foreclosure properties, homes for sale, and average cost of homes sold, along with homeowner’s association regulations, if one exists.

On the other hand, internal broker price opinions require entering the home to obtain property information. Because the assessment is done intricately, internal appraisals provide a more detailed report of property condition.  This type allows a broker to conduct a thorough investigation to determine the exact condition of ceilings, floors, walls, appliances, fireplace, plumbing, electrical and working capacity of HVAC units. In addition to that, brokers must also inspect roofing, siding, gutters, fencing and swimming pools. The reports that are collected and documented by the internal broker price opinion are often used with mortgage refinance and loan modifications.

Apart from any other usage of BPOs, lenders also make use of its reports when they enter into short sale agreements. With this transaction, lenders usually agree to accept less than the full amount owed on the home mortgage loan. Banks establish a listing price based on the aforementioned factors. Borrowers then list their property through a licensed realtor. Short sale homes are generally priced below market value to attract buyers.

Lastly, broker price opinions are used when borrowers apply for home equity line of credit. See, broker price opinion is really useful in many ways. More than just a collection of documents, these opinions play an important role in making the real estate market run. Without the existence of which, the market would never be the same.

A Reduced-Cost Option for Home Appraisal is a post from: My First Home Blog

The society is in the middle of global economic crises. All prices seems to go up and the income far below the usual, not to mention many lay-off workers and other unemployed citizens. This leaves the society in desperate need to change the economic status for the better. To answer the call, the government implemented training and retraining programs. Much more like a mortgage calculator, the people are in constant look out on the solving problems in terms of figures.

A mortgage is a security interest in real property held by a lender as a security for a debt which is usually a loan of money. While mortgage is not a debt itself, it is however used by lenders as a security for a debt. In a more specific term, a mortgage is a transfer of an interesting land or the equivalent from the owner to the mortgage lender, given that when the terms of the mortgage have been satisfied or performed, the same interest will be returned to the owner.

Moreover, a mortgage is viewed as a standard method by which individuals and businesses can purchase real estate without the need to pay the full value immediately from their own resources.

Mortgage calculators are tools that aid in doing simple and quick calculations for home financing needs at the same time make remarkable analysis on mortgage payments based upon loan amount, interest rates and other factors.

There is a number of information revealed when one is using this kind of tool. Included in this information are:

1. Mortgage / Home Affordability

By knowing your limitation on the amount of mortgage you can afford, you can easily decide on how much you are willing to spend for your home purchase.

2. Annual Percentage Rate (APR)

There are commercially available calculators that help a person evaluate the Annual Percentage Rate on his home loan. Having knowledge on APR lets a person compare loans  using the results as basis, and make decision making a lot more easier by letting you glimpse on your preferences in terms of APR. However, it is not a guarantee that those properties with low APR charged low rate of interest.

3. Monthly mortgage payment

This is easily computed with the use of mortgage calculator. It also contributes in determining the total monthly payments for the entire loan term.

4. Compare loans at various rates

Other commercially available mortgage calculators allow a person to compare monthly payments on loans at different rates of interest. This rare happenings lowers down one’s search making it more convenient for a person to choose what he thinks is best among his sea of options.

5. Compare payments at different terms

One can calculate and compare payments at different loan terms, say 10 years, 15 years etc. Loan calculators providing such computations show a person how the total interest and monthly payments vary with changes in the loan term.

6. Payments on FRM and ARM

Using loan calculators, you can work out monthly payments on FRM and ARM. This enables you to decide whether you should choose an FRM or ARM.

7. Calculate how much you save by paying extra

Reflect on this: if you make extra payments towards the principal, you are likely to pay off your mortgage early. With this, you can evaluate on how much you will save.

However, regardless of what type of mortgage you are trying to calculate, the need to select the appropriate mortgage calculator is very helpful to help you work out the figures you require.

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• 4 common types of mortgage loan calculators (myfirsthomeblog.com)

Mortgage Calculators: A Lesson for Smart Loan Calculations is a post from: My First Home Blog

Source: cml.org.uk

One third of first-time buyers escaped paying stamp duty in September as a result of the government’s temporary £175,000 nil-rate threshold, according to new data released by the Council of Mortgage Lenders (CML).

There were 6,200 first-time buyer loans for properties between the old threshold of £125,000 and the temporary threshold of £175,000, representing 32% of the 19,700 loans to first-time buyers in September. In addition, 7,800 first-time buyers (40%) bought properties valued below the £125,000 original threshold.

There were 7,300 home mover loans for properties between £125,000 and £175,000 which was 24% of the 31,000 loans to home movers in September.

Since the concession was introduced last September, an estimated 132,500 house purchase mortgage transactions have escaped paying stamp duty which otherwise would have incurred the tax at 1% – some 27% of the 486,400 house purchase loans in the period.

There were 50,600 loans for house purchase in September – an increase of 2% from August and 43% from September 2008.

House purchase lending has now increased year-on-year for three consecutive months (following 25 consecutive year-on-year monthly falls) whilst remortgaging has continued its annualised decline, although the rate of decline moderated in September.

There were 33,000 loans for remortgage – a 10% increase from August but 48% lower than September a year ago. Gross mortgage lending was 7% higher than August at £12.9 billion, but was still 25% lower than September last year.

Although lending criteria remain tight, there is clearly demand from borrowers and for those able to provide the substantial deposit, finance is cheaper than in recent years. The typical homebuyer had to commit 12.8% of gross income to cover mortgage interest payments in the third quarter of 2009, this was unchanged from the second quarter and the lowest figure since the first quarter of 2004.

CML economist Paul Samter said: “The stamp duty concession has played a modest role in underpinning confidence in the housing market. As the end date for the stamp duty concession approaches, we may see sustained levels of activity at the lower end of the market in a traditionally quiet time. But the corollary will be lower activity in early 2010 as transactions are “bunched” in 2009. Although the recent bounce-back in house purchase activity is holding up, we remain some way below what might be called “normal” levels of transactions.”

One third of first-time buyers make lucky stamp duty escape is a post from: My First Home Blog