Residential valuations in March this year were 7% higher than the same period last year, according to Connells Survey and Valuations. They reported that this was the fourth month in a row with an increase in valuations over the same period a year ago.
Q1 2011 had 16% more valuations than Q1 2010, and we saw an increase in the number of first time buyers (FTB’s) getting valuations, in February there was an increase of 21% and in March it was up 34% year on year, indicating an increase in FTB’s entering the housing market.
Business development director at Connells Survey and Valuation, Colin Dorman, commented:
“The real barometer of the health of the housing market is activity and this is showing signs of picking up – with a welcome boost in first-time buyer demand.”
“The government’s new FirstBuy scheme should provide added relief for a limited number, but the real lifeblood of first-time buyer market is mortgage finance, and we still need lenders to do more to fan the flames of recovery.”
This could be an early indication of growth in the contractor mortgage market. Demand has not wavered as first time buyers still wanted a home, it was the supply of credit that was holding back the market. Credit has come back slowly, but this was to ensure we did not repeat the mistakes that lead to economic collapse in 2008.
In other news, all product and arrangement fees have been removed from two, three, and five year fixed rate mortgage deals from ING Direct. Their deals were already competitive so this will create fierce competition in the mortgage market place.
Mortgage director of ING Direct, Julian Hartley, stated:
“We have been seeing increased speculation about Bank of England Base rate increases and this is already feeding through into more enquiries about fixed rate products.”
“Our economists are advising us that when rates do rise, they may do so more steeply than many pundits are predicting. It is interesting to note that historically when rates do start to increase it is at a faster pace than expected.”
“We are looking to expand our mortgage business and it makes sense to increase the appeal of our fixed rate products at a time we predict they are going to be more in demand.”
As a company ING direct are not normally contractor friendly, but these competitive forces have a tendency to filter down into contractor mortgage products.
The UK has become the only European economy included in the IMF’s World Economic Report to have its growth projections cut. Released yesterday, the IMF provided forecasts for Germany, France, Italy and Spain out of these the UK’s world output growth was the only one to be downgraded. It was revised down from 1.7% growth in 2011 -0.3% growth and 2.3% down to 0% growth in 2012.
“Data through the third quarter of 2010 indicate that virtually all 21 advanced economies experienced a price contraction5 and that five economies have experienced (Denmark, New Zealand, United Kingdom) or are experiencing (Spain, United States) a house price bust. The closest historical episode to the current one was observed in the early 1990s. A key difference from the past, however, is that this is the first time the United States, which accounts for the lion’s share of global financial transactions, has experienced a house price bust.”
This comprehensive report covers many aspects of the economy, such as house prices, oil prices and inflationary pressures, with all this taken into account but the UK economy looks to be flagging behind other European countries. We hope this will not be the case, but whatever the outcome, mortgages and contractor mortgages, which we provide are still growing in number, so there will be positives to come moving forward, we believe.
A shared ownership mortgage product designed with first time buyers in mind has been launched by Leeds building society. Available up to a 95% borrower share, the deal is on a fixed rate and has maximum loan to value of 75%.
Head of intermediary sales at Leeds, Phil Coombes, commented, saying briefly that the products address the difficulties that first time buyers can face. He went on to say that shared ownership is a good starting point to full home ownership, especially if earning potential increases.
The new product is ideal for those clients who have saved for a deposit but are unable to secure funding with a traditional mortgage product.
Phil coombes has no doubt that this will attract first time buyers who want to get on the housing ladder. Contractors may find this type of product useful, but they may have to wait until a contractor friendly mortgage provider offers a similar deal. Leeds BS has typically not shared our stance on contractors and contractor mortgages.
If you think that buying a car is a time consuming process with never ending paperwork, just wait until you try to buy a house. The level of work to be done and the time you have to wait is staggering. It can become quite the nightmare before it is all over, particularly when your loan officer calls the week you are scheduled to close and tells you they have a problem.
Taking time now to make sure you have everything they could possibly want will go a long way towards helping secure your new home loan and making sure your move in date is solid. Don’t be caught unprepared; start assembling the following items today, before you rush headlong into the process.
Pay stubs. Most mortgage brokers are going to require pay records from at least three months prior to the loan application. If you are self-employed or if your position is commission based, you can expect to be asked for up to a year’s worth of salary records. Basically the bank wants to know how much you have coming in to determine if you can in fact pay for the house you are applying for.
If you are retired, you will need to provide proof of that income as well. Social security statements, pension documents, or 401K material will be good sources of info.
Bank account information. You should assemble statements for all of your bank accounts (checking, savings) for at least the past three months. Ideally, give them six months, just to make sure there are no unanswered questions.
If you are currently renting, the lender may require a copy of your lease or rental agreement. Don’t be surprised if they contact your landlord and verify that rent has been paid on time. This is another reason to always be Johnny on the spot with your rent and other payments, because that record will come back on you when you are trying to purchase a home.
The lender will also need to verify your employment. Your employer will fill out a form verifying your employment status, salary, and if there are any planned changes to your employment status or raises scheduled.
And of course there is the most fun part, tax returns. Most lenders will ask for a year’s tax returns, but it is not uncommon for them to ask for three. Have the full tax return available for each of the last three years.
When closing day arrives, you will need to have a cashier’s check or certified check for the remaining down payment funds that are owed, as well as for whatever closing costs you are responsible for. Contact your lender a day or two before closing to make sure of the amount you need to bring in.
You will also need to bring a binder for homeowner’s insurance and the paid receipt. Before proceeding with the closing, the loan officer will contact you to confirm that you have your binder for homeowners insurance and a paid receipt for the first year’s premium. A binder is a document that proves that you have adequate homeowners insurance for the home you are purchasing. Your lender will not issue the mortgage loan without it, so this is a priority.
Once you are in closing, the closing officer will explain each of the closing documents before you sign them to make sure that they are properly understood. Understand that the signing of all documents may require a couple of hours, so don’t be in a hurry.
After everything is signed, you may take possession of the home on the date specified in the agreement. If that happens to be the same day as your closing, then you will receive the keys to your new home at that point.
Yes, there is a lot that goes into the purchase of a home, and it needs to be done right the first time in order to avoid any complications late in the process, complications that may conceivably delay closing. But by taking the time now to go ahead and assemble what you need before jumping headfirst into the process, you will save yourself a lot of grief and frustration. Organization is half the solution when it comes to securing your new home loan.
In the current gloomy financial climate, the prospect of earning more money is highly appealing from a cash point of view but immensely frustrating from a time perspective. However, the truth is, you could have been sitting on that elusive ‘pot of gold’ all along.
With the likelihood of a pay rise seeming as probable as Gadaffi having an affair with Carla Bruni, finding other ways to boost your bank balance is becoming an essential measure for most. By taking simple steps to look at your present financial set up, you could potentially unlock an extra £10,000 for yourself, making it a not-so-bleak summer after all.
How can I save money when I’m trying to pay off my mortgage?
First and foremost, dig yourself out of arrears and work on cutting your debts. Those that own a home can reduce the interest that they pay by shopping around and re-mortgaging their property. Interest rates are sitting at a record low and many homeowners are currently locked into deals that mean they are paying well over the odds, so trading debts with regard to your mortgage could drastically reduce your outgoings. However beware, as mortgages are spread over a significant portion of your life, as opposed to short-term loans or credit cards, the total amount of interest could actually be more. Get some sound financial advice on the mortgage options available to you and take advantage of these low rates before they hitch a ride on the back of inflation in the latter half of 2011.
Take advantage of low interest rates
With interest rates so low, now would be a good time to pay off other debts too. Look at your current credit card’s APR (Annual Percentage Rate) to see what you’re paying in interest. Some credit cards can charge up to 30% on the amount you’ve borrowed, making repayments very costly. As the time of year dictates that we pile on extra to our struggling plastic friend, it’s the ideal season to look around the market for balance transfers at 0%. Although you will pay an initial charge to move your debt, if you have a good line of credit to make this a feasible alternative, then this option will give you at least a year’s breathing space to start clearing your outstanding arrears. This will be plenty of time to help you get back on your feet and start paying back some of those insomnia inducing credit agreements that have been weighing so heavily around your neck.
Resist the urge to spend money you don’t have!
Just be careful with balance transfers, that you don’t continue the pattern that collated your debt in the first place. Additional spending on your new card will normally incur interest, just adding to your problem, not solving it. Kieron Bolton, Managing Director of propertyadviceblog.com says of new purchases, that they will “be the last things you clear from your card, which means they could collect a lot of interest before they’re paid off”.
A final thought
Check your current finance agreements and see if by shrewdly moving to better interest arrangements and releasing your extra cash flow, you can free yourself from strangling debts this year. In every crisis there’s opportunity so take a minute to stop, think and take a look around. You’ll soon find that things can actually get a lot better… a lot faster than you think!
New South Wales home loans now are far more attainable even to people who have moderate income who would like to obtain their own unique home. If you are a citizen of New South Wales, you can check with the Department of Communities to learn more about the right way to apply.
What is available for New South Wales house loan applicants?
• The loan product merely uses a five percent deposit
• An option involving fixed interest rates or adjustable rate of interest
• Zero home loan insurance policy service fees
• Zero regular monthly account-keeping fees
See whether you are eligible
The following are the prerequisites to consider when trying to find a property financial mortgage loan in New South Wales. You will need to:
• live in New South Wales or get permanent residence in Australia
• not fully or in-part acquire a different residence or real estate
• have the goal to really settle in the home
• be totally free of financial obligations
• be below the restriction set for maximum permitted revenue
• be able to display a superb history of savings
• be in a position to come up with the mandatory financial savings to pay the minimum deposit necessary and various other charges
• show capability to pay back the mortgage without hardship
• demonstrate earning potential in the foreseeable future
Know the Fees
You’re going to be required to cover a few service fees if you are planning to construct or get a house through a New South Wales Housing Finance Loan:
• Advance payment that’s equivalent to five percent of the home’s cost
• Financial consultation. Ultimately, you will need to contact financial professionals and ask for finance guidance. As soon as your loan is approved, you will have a $100 reimbursement for procuring independent financial guide.
• Application fees
• Mortgage registration costs.
See how Much You may Be lent
The total amount you can be lent is based on:
• your mortgage’s duration
• latest interest rates
• your disposable and gross earnings
• the precise value of the asset you would like to obtain or establish
Learn how Much You are going to Settle
You definitely should pay back the loan in full amount together with the relevant expenses and fees, and also interest. Your regular monthly repayment total depends on:
• your overall loan amount
• your revenue amount
• the most recent rates of interest
• your loan’s term
Find out about the Other Costs and Charges
Besides the above-mentioned charges, you will probably have to pay for stamp duty, legal charges and registration expenses. You may want to contact your solicitor to obtain an estimate of all these fees, which will be based in accordance with your specific instances. Other fees can incorporate bug and structure examinations, moving charges, council rates and maintenance rates. You should also acquire insurance plan for the property.
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A concerned wife wrote to a nationally syndicated columnist last week asking for advice on how here and her husband can realize their retirement goals with a reverse mortgage. Here at Legacy, we wanted to offer our advice and opinions as well.
Homeowners near or in retirement around the country have all wondered the same thing at some point in their daily lives these days: am I in the best possible financial position to enter retirement? Unfortunately, the Great Recession left damages to the American housing and job markets that are and will continue to linger likely for some years to come. That has a lot of seniors (and even soon-to-be seniors) worrying.
Many of these homeowners are starting to reach out to professionals, attorneys, journalist, and even their local newspaper columnist for advice. Once such concerned homeowner wrote to Lew Sichelman, a nationally syndicated writer who has covered the housing market for over 40 years. She digests about her inopportune, yet so very common, disposition regarding her and her husband’s retirement prospects.
In a letter dated just two weeks ago, a woman referred to only as J.L.S. wrote that her and her 77 year old husband have lived financially responsible, if not down-right frugal, lives. During the boom years, their retirement portfolio (largely invested in the stock markets) reached a cool $1 million before losing 55% when the party came to a crashing halt in 2008.
She writes that she has wondered whether or not a reverse mortgage would be a smart financial and lifestyle choice. They’re ready to downsize the home and may be interested in moving to North Carolina. Lew offers some very reasonable and helpful advice in a response now published on MarketWatch.com, but we wanted to give our take as well.
At Legacy Reverse Mortgage, here’s what we can do for J.L.S. and other retiring homeowners who may be in the same or a similar financial predicament.
J.L.S. can use our Reverse Mortgage Calculator, found on the Legacy Reverse Mortgage website. The instant calculator applies a homeowner’s zip code, age, home value, and the existing outstanding mortgage balance remaining today (if any) to come up with an accurate estimation for what J.L.S. and her husband could expect to receive with a reverse mortgage.
J.L.S. and her husband would be eligible to receive the proceeds of their reverse mortgage under a number of different disbursement plans. The variety of payment plans are intended to meet the flexibility and needs of any one particular couple’s lifestyle. For example, J.L.S. and her husband may decide to buy that retirement home in North Carolina after all, and they can do so with using what’s called an HECM for Purchase plan.
Equally likely, J.L.S. and her husband may decide to stay in their home and receive their reverse mortgage proceeds on a monthly, fixed-payment for life plan, allowing the couple to flexibility to move into that home one day if they choose.
Legacy Reverse Mortgage has had the tools, experience, and a high level of dedicated customer service to help homeowners near retirement just like J.L.S. realize the vast comfort and benefits a reverse mortgage offers for over 12 years. We’re available 24 hours a day, 7 days a week to answer your questions; no need to write into a columnist! Simply call 1-800-991-4613 or visit our website and find the Live Chat box on the bottom right-hand side of the screen to talk with a reverse mortgage specialist right now.
A Manulife One home line-of-credit can save you thousands of dollars in interest payments. It is the most innovative new banking product in Canada today. It combines your mortgage, credit cards, lines of credit and any other debts into one universal line of credit secured by your home. You then use the account as a spending account and cash deposit for income and savings. It will help you get out of debt years sooner, save you thousands in interest payments increase your monthly cash flow.
A Manulife One home line-of-credit can save you thousands of dollars in interest payments. It is the most innovative new banking product in Canada today. It combines your mortgage, credit cards, lines of credit and any other debts into one universal line of credit secured by your home. You then use the account as a spending account and cash deposit for income and savings. It will help you get out of debt years sooner, save you thousands in interest payments increase your monthly cash flow.
Many people who are interested in refinancing their mortgage have been interested in the many things like no interest loans or even things like negative amortization. These can have negative consequences at the end, so it is the best to just stick to the original ways of mortgages. Something that is now forgotten but is a good way to go is the 15 year loan. This used to be so popular but many people are falling into the gimmicks and misleading natures of the other types of loans. Many people are starting to think of the 15 year mortgage loan as a pain and are considering it to be much harder and more time consuming than the easy go rich and fancy loans. But many people often tend to overlook the many benefits that getting a 15 year loan has.
One way that it Is better than the 30 year loans is that you can pay off the loan in half the amount of time. You would be rid of the stress quicker. Example – if you are currently 30 and get the loan, you will be debt free when you are 45 as compared to 60.Many people are also forced to believe that if it is paid of quicker, the monthly payments are probably also higher! However, that is not true. Actually, the payment is only a little e bit more, not even close to twice as much! A 30 year loan when mortgage refinance no closing costs
might have a monthly payment for 1037$ while the 15 year loan might just have a payment of $ 13832 a month. You see you do pay a little bit more but in the grand scheme of things, if it saves you the stress and work for a 15 year time period, why not go for it?
Second, if you choose the shorter loan life, you may not be realizing but you do save money on the interest of the loan. Approximately for a 30 year loan, you will pay about 213,000 and if you choose the 15 year loan, you would only owe the banks $88,000. These numbers are devised form a formula. This calculates up to a 59% savings.
This shows how the 15 year loan can actually help you pay less money because of the often missed logistics of the other types of loans. You also won’t have a sudden increase in interest. Yes, you may have to pay a little extra each month, but if you figure everything out, you save quite a bit on interest and that is something that really matters in the long term. Actually the interest rates are also surprisingly lower for that type of a loan.
However, if the government shuts down Freddie Mac and Fannie Mae, the two biggest government companies, the 30 year loan, a personal favorite of many Americans, may just vanish. This is because the rates may rise without these government facilities and people would just prefer these short term loans.
Well after discussing the financial benefits of the 15 year loan, you may also want to know the downsides of the 15 year loan.
The biggest problem might just be inflation. Now I know that everyone might not have the basis to get a 15 year loan for themselves. But when you are out there looking for a mortgage, the 15 year can definitely be considered. If you have different needs like kids or bigger houses, then stick to the 30 year loans. Again it just depends on you and your financial standings.
Lenders’ variable rate discounts offering a strong incentive
Heated competition in the home loan market, a wider range of variable loan special offers and extended cash rate stability look to be suppressing borrowers’ appetite for fixed rate loans.
Demand for such loans has taken a tumble as a greater proportion of new borrowers move to take up variable rate deals, experiencing a fall for the first time since July 2010.
The latest data from Mortgage Choice shows 10.7% of the home loans approved for its customers in February had a fixed interest rate. This compared to 15.3% in January, 15.2% in December and 11.2% in November.
The consumption of fixed rate loans fell for the first time in four months in the majority of states by an average of 6 percentage points, except WA, where demand grew by 1.2 percentage points.
The appetite for fixed interest rates is at its lowest since October 2010, just before it rose due to November’s surprise rate increases. Last month’s fall in demand coincides with the start of the ‘lender war’ for home loan volume growth. It appears more new borrowers are lapping up the deals on offer, taking advantage of lenders’ various incentives as they compete to outstrip each other of vital market share.
A move away from fixed interest rates may also signal an uptick in positive consumer sentiment towards the economic outlook. The next cash rate rise is now tipped for mid to late this year.
Ongoing discount loans – where the interest rate is discounted over the entire loan term usually in return for an annual fee – experienced a 2.1 percentage point drop in popularity. This probably occurred as borrowers, smitten by the range of special offers, increased their demand for standard and basic variable rate loans, by 3.9 and 1.9 percentage points respectively.
In February, standard variable rate home loans continued to be the loan of choice, at 34.6% of Mortgage Choice’s news approvals. Basic variable loans followed at 25.6%, before ongoing discount loans at 23.3%, which took a step back from second spot in January.
Demand for line of credit home loans (often popular with investors) rose marginally to 5.1% of approvals from 4.8% the month prior while introductory rate home loans accounted for only 0.9%, though this was up from 0.2%.
Note: Mortgage Choice currently writes one in 25 new home loans in Australia, equating to over $10 billion in approvals per year, hence it provides a clear insight into borrower preferences. The 18+ year old mortgage broker company has a loan book of over $40 billion.