Tag Archives: mortgage advice

The Mortgage Charter: Your Lifeline in Tough Times

Mortgages, , ,

The Mortgage Charter: Your Lifeline in Tough Times

In the ever-evolving landscape of homeownership, financial uncertainties can sometimes cast shadows on our dreams. However, there’s a guiding light – the Mortgage Charter. It’s a beacon of hope, offering vital support and assistance to those facing mortgage-related challenges.

 

mortgage charter to assist when struggling with monthly mortgage repayments

What is the Mortgage Charter?

The Mortgage Charter is a commitment made by mortgage lenders, endorsed by government agencies and the Financial Conduct Authority (FCA), to provide help and support for homeowners who may be facing financial difficulties. It’s a pledge to be understanding, compassionate, and proactive when borrowers are struggling to meet their mortgage payments.

 

your mortgage lender is required to help if struggling with monthly payments

Key Provisions of the Mortgage Charter

Created in response to the pressures on households with mortgages, due to rising inflation and increased cost of living, The Charter signifies a significant shift in the approach to mortgage lending.

Lenders are expected to now reach these new expectations which includes, but is not limited to, the following:

  • Payment Flexibility: Lenders who adopt the Mortgage Charter often offer flexible payment options, which can include temporary payment reductions or even payment holidays in times of financial crisis.
  • Communication and Support: It encourages open and honest communication between lenders and borrowers. If you’re facing difficulties, don’t hesitate to reach out to discuss your situation.
  • Sustainability: The Mortgage Charter emphasises sustainable homeownership. Lenders work with borrowers to find solutions that allow them to keep their homes while also meeting their financial obligations via their monthly payments.
  • Guidance and Advice: Lenders under the Mortgage Charter often provide guidance and financial advice to help borrowers regain their financial footing.

 

if rising interest rates are affecting your mortgage rates get in touch with your lender

The importance of seeking help if you’re struggling with monthly repayments

If you find yourself in a financial bind and are struggling with your mortgage payments, don’t hesitate to reach out to your lender. They can provide more detailed information about the specific assistance and programs available to you.

Remember, the Mortgage Charter is a lifeline – a commitment by lenders to help homeowners in challenging times. Your home is an important asset, and there are options available to help you protect it, even during difficult periods.

The service is there and available for you to use, so do not struggle with monthly repayments alone.

 

protect your mortgage deal with the mortgage charter

Conclusion regarding the mortgage charter

The Mortgage Charter is a safety net, a helping hand in times of need. It’s a testament to the commitment of lenders to support homeowners in their journey to financial stability. If you’re facing mortgage-related challenges, reach out to your lender and explore the assistance and options available to you. Your home is more than a structure; it’s a place where your dreams are nurtured, and the Mortgage Charter is here to ensure those dreams endure.

Your home is at risk if you don’t keep up repayments. If you are experiencing financial difficulty act quickly and get in touch with your lender who will explain the various options and support that is available.

 

discuss mortgage deals, fixed rate mortgage and variable rate mortgage with our mortgage experts

Get in touch with our experts to discuss the mortgage deals available to you

Whether you are looking to discuss any of the above, including your monthly mortgage repayments, or you are a first time buyer, our team are on hand to discuss mortgage deals and the offers that are available to you.

Our team can go over everything from interest rates to the types of mortgages you can choose and they will also advise how each choice could affect your mortgage and will encourage you to think carefully before securing a deal.

Get in touch on 01698 200050 or e-mail info@mortgagehub.co.uk

A Deep Dive into 100% Mortgages: What You Need to Know

Mortgages, ,

A Deep Dive into 100% Mortgages: What You Need to Know

The dream of homeownership is a significant goal for many, but for some, saving up for that all-important down payment can feel like an insurmountable hurdle. This is where 100% mortgages may work for some.

In this blog post, we’ll explore what 100% mortgages are, how they work, and the pros and cons associated with this type of home financing.

 

mortgages uk, what's on offer from a 100% mortgage

Understanding 100% Mortgages

A 100% mortgage is exactly what it sounds like: a loan that covers the cost of your home without requiring a deposit upfront.

Traditionally, homebuyers are required to make a deposit, typically around 5% – 15% of the home’s purchase price, to secure a mortgage. However, 100% mortgages are designed to eliminate this upfront financial burden.

 

How the mortgage deal works by comparison to other mortgage offers

  • Zero Down Payment: The most obvious feature of a 100% mortgage is that you don’t need to provide a deposit. This means that you can buy a home without having to save thousands of pounds in advance.
  • Higher Interest Rates: To compensate for the added risk associated with 100% mortgages, lenders often charge slightly higher interest rates compared to traditional mortgages. Some lenders may also charge an arrangement fee. This means that you can expect higher monthly mortgage repayments.
  • Credit Requirements: Lenders may have stricter credit score requirements for 100% mortgage applicants to mitigate the higher risk.
  • Income Verification: Expect more rigorous income verification to ensure you can meet your monthly mortgage obligations.

 

the benefits of a 100% mortgage application

The Pros of 100% Mortgages

However despite a more critical review ahead of being accepted for a 100% mortgage, there are many benefits to taking on one of these deals. These include:

  • No Down Payment: The most significant advantage is that you may be able to get into homeownership without a substantial upfront cash requirement.
  • Quicker Homeownership: You can become a homeowner sooner by comparison to other mortgage deals. Instead of waiting years to save for a deposit, the 100% mortgage will cover the cost of your house purchase with no savings required for the deposit. Any fees such as solicitors, or any arrangement fees will be required to be paid by you.
  • Investment Opportunity: If home prices are rising, you may benefit from the appreciation of your home’s value without needing an initial investment. This is subject to property market behaviour which can fluctuate over time.

 

the cons of taking out a 100% mortgage as your new deal

The Cons of 100% Mortgages

However it is also beneficial to be aware of some of the negative associations with 100% mortgages from a buyers perspective.

  • Higher Interest Rates: Over the life of the loan, the higher interest rates can result in a significantly larger total repayment amount. Mainly caused by higher repayments on your mortgage.
  • Risk of Negative Equity: On the flip side of what we mentioned above. In the early years of the mortgage, you might owe more than your home is worth, especially if property values decline.
  • Stricter Qualification: Meeting the credit and income requirements can be more challenging.

 

taking out a new mortgage as a 100% deal

Is a 100% Mortgage Right for You?

Given assessment of both the advantage and disadvantages of a 100% mortgage, the decision to pursue a 100% mortgage depends on your individual financial situation and goals. If you have a good credit score, stable income, and understand the long-term financial implications, it might be a viable option for you. However, carefully weigh the pros and cons and consider your ability to manage all the costs.

Before deciding if a 100% mortgage is for you, important to know all your options. Get in touch with us and we can provide personalised guidance based on your unique circumstances.

Remember that while a 100% mortgage can be a valuable tool for achieving homeownership, it’s crucial to make an informed decision that aligns with your long-term financial goals.

 

glasgow mortgage advisors open Monday to friday

Speak to one of our expert mortgage advisors today

Whether you’re a first time buyer or you have an existing mortgage deal in place, our team are on hand to answer any queries you may have and can put forward some of the best suited mortgage deals based on your circumstances and requirements.

Get in touch today on 01698 200050 or e-mail info@mortgagehub.co.uk

Banks offer help to mortgage holders

Mortgages, ,

Banks offer help to mortgage holders

Following the latest rate rise that saw interest rates hit 5% on June 22 2023, bank bosses met with Chancellor Jeremy Hunt. Rates went up last month to try and tackle inflation which remains unchanged from the previous month at 8.7%

As a result of the meeting, banks have agreed to offer more flexibility to those struggling with their repayments in the wake of the latest rise in rates. Borrowers can temporarily change their mortgage term to allow them to make lower, interest-only repayments for a short time before reverting back to the original terms.

Moreover, those who opt for this change won’t adversely affect their credit score, which it may have done previously.

Anyone who misses mortgage payments or takes a mortgage holiday that pauses their repayments altogether (something commonplace during the pandemic) will still affect a borrower’s ability to secure lending in the future.

Along with agreeing to let borrowers switch to interest-only to help manage their finances, lenders will delay any repossession proceedings for 12 months.

Cost of living crisis explained

The result of high inflation is that we are still in a cost-of-living crisis; not only are mortgages rising for those on a variable rate or coming to the end of their fixed rate period, but energy prices and the cost of goods and services are stubbornly high.

Those who are renting, they may find that their rent goes up as Landlords’ mortgages rise. Some organisations, such as the National Residential Landlords Association (NRLA), lobby for government action. They are calling for the reintroduction of mortgage interest relief and the unfreezing of housing benefit rates and believe that the current interest rate of 5% will result in landlords selling off as many as 735,000 rental properties which will fuel the ongoing supply and demand crisis across the private rented sector, pushing up prices further.

What is the government doing to assist?

Currently, the government won’t step in to support borrowers as this could undermine the battle against inflation. The government instead aims to stick to the current plan and ‘hold its nerve’.

One of the reasons that interest rates have gone up is to reduce people’s disposable income. So offering more support for mortgage holders could be counterproductive and work against the Bank of England’s policy. Rising interest rates can also reduce economic spending by boosting the incentive to save money. However, this provides little comfort to those unable to make ends meet.

What does this mean for my mortgage?

The average two-year fixed-rate mortgage is currently at 6.19%. According to financial data firm Moneyfacts, the five-year rate is about to hit 6%.

Following the latest rate rise, the average two-year tracker mortgage rate rose to 5.66% from 5.49%. Compare this to June 2022, and rates were half that.

Recently MPs have criticised banks for failing to pass rate rises on in full to savers with easy-access accounts – something that we hope will change shortly.

These latest changes will make a big difference to those at risk of losing their homes because they fall behind in their mortgage payments.

In addition, it will help those who have to change their mortgage because their fixed rate ends, and they’re worried about the impact on their family finances.

Get in touch with Mortgage Hub to discuss your requirements

If you would like to find out about these latest changes and how they could affect you, contact our mortgage specialists at The Mortgage Hub. Our team are available Monday to Saturday on 01698 200050 or e-mail info@mortgagehub.co.uk

Interest Rates and Your Finances – what does the rise mean for you?

Mortgages, , ,

Interest Rates and Your Finances

Following the May rise in interest rates to 4.5%, many people are now wondering what that means for their mortgages.

Lenders regularly review the interest rates of their mortgage products, adjusting the deals available to those looking to buy their first home or remortgage their existing property.

The Bank of England (BoE) meets every six weeks to decide whether the Base Rate should go up or down or stay the same. Last month, the interest rate went up 0.25% percentage points, from 4.25% to 4.5%.

What does the interest rate increase mean for your mortgage payments?

This rate rise is unwelcome news for those with a mortgage on a variable rate – this could be a base rate tracker, discounted-rate deal, or a lender’s standard variable rate (SVR).

For those on a tracker mortgage, their deal directly follows the base rate, and at 5.25%, their repayments will rise by £21 per month if they have a £150k repayment mortgage with a 20-year term. Compare this to last year; that same homeowner will have been paying £776 a month, indicating a rise in the previous 12 months.

A Standard Variable Rate mortgage goes up at the lender’s discretion. However, these are likely to go up even if not by the total 0.25% percentage points.

For those on a fixed-rate mortgage, this news will not impact their mortgage repayments each month. This accounts for around six million households in the UK – but if their current deal is about to end, they will feel the impact of the increase in their monthly payments. If they are coming to the end of a 2-year fixed rate, they could be used to paying around 1.5 to 2% and will experience a big jump.

US investment group Goldman Sachs anticipates rates will rise to 5% this summer.

Mortgage rates are increasing by an average of 0.39% across all LTVs, and these latest interest rate changes hardest hit those with a 10 or 15% deposit. However, some lenders are trying to remain as competitive as they can.

What does the increased interest rate mean for savings rates?

 The Bank began raising interest rates at the end of 2021, and at this time, the best easy-access savings rate was 0.67%. Following the rate rises, the rates for savers have improved, and the highest easy access savings rate is now 3.71% – this is significantly below the inflation rate of around 10%. Following the recent rate rise, several savings providers have raised rates to be competitive and attract new customers.

For those who don’t need an easy access account, rates of 4.91% are available – but this means tying up funds for two to five years.

The Commons Treasury select committee has recently campaigned to encourage high street banks to increase the savings rates offered to loyal customers. While the online accounts above pay relatively attractive interest rates, easy-access accounts at many big banks still provide meagre returns.

How does the increased interest rate affect credit card and loans?

When interest rates go up, so do the rates on borrowing via credit cards and loans. If you already have a loan, it’s likely to be on a fixed rate, so your repayment won’t change. If you have a credit card, it may be worth moving it to an interest-free offer. However, you will need to pay a transfer fee.

Are house prices falling as a result of the increased interest rate?

According to the latest House Price Index from Zoopla, buyers and sellers are pressing ahead with their plans despite the rate rise. Recent inflation figures might still put a brake on market activity however.

The Index shows that:

  • UK house prices have dropped 1.3% over the last two quarters but this is now a slow reduction.
  • Lower mortgage rates in the first half of this year supported an increase in housing market activity.
  • Confidence is improving.
  • Housing market conditions vary across the country with weaker demand in areas where house prices have risen the most.
  • The likelihood of further interest rate rises may weaken demand and market activity at the end of 2023.

House prices are currently falling slower than they did at the end of last year, indicating some improved confidence from both buyers and sellers. In fact, the number of property sales in the UK has increased due to lower mortgage rates over recent months. The strong labour market has also prevented prices from falling further.

The annual rate of house price growth is 1.9% for the UK – down from 9.6% last year – ranging from -0.2% in London to 3.6% in Wales. House prices are expected to remain broadly the same for the rest of the year despite inflation data currently being higher than predicted. Mortgage rates could rise in the coming months which will impact house prices.

Looking for more information/ mortgage advice?

If you want to know how the recent interest rate rise might affect you, talk to the team at The Mortgage Hub. We can help you with your new mortgage or find a deal if you are coming to the end of your existing deal.

Save Valuable Time – Get Your Paperwork in Order!

Uncategorized, , , , , , , , , ,

The property market in Scotland today is fast-moving with properties are being sold well in excess of the Home Report value, and there are no signs of it slowing down any time soon. It’s important that you get all of your paperwork in order to avoid any delays in the sale of your property.

Continue reading Save Valuable Time – Get Your Paperwork in Order! →

Mortgages in Retirement 

All, Mortgages, , , ,

Pensioners looking to help their children or grandchildren get a foot on the property ladder or who are stuck with existing interest-only mortgages could be offered a new type of home loan.

In recent months, we have seen a rise in the number of interest-only mortgages available to those in retirement age. This has made a huge impact for those looking for mortgages in retirement.

Continue reading Mortgages in Retirement  →

Should I Overpay on My Mortgage?

All, Mortgages, , , ,

Could overpaying on your mortgage be a wise move? Using some of your savings or disposable income to make additional mortgage payments can result in considerable gains in interest. However, with any such decision regarding financial planning, it’s always best to consult an independent financial advisor to ensure this is the right move for your personal circumstances. Continue reading Should I Overpay on My Mortgage? →

More First Time Buyers Than Ever Ask Advice from a Mortgage Expert

All, Company News, Mortgages, , , ,

In the last year, first time home buyers came to the market in unprecedented numbers to find out more about the accessibility of mortgages. Because of the historically low-interest rates and the relatively higher approval rates, many wishful home buyers are in a position to move one step forward on the property ladder. Continue reading More First Time Buyers Than Ever Ask Advice from a Mortgage Expert →

A Guide to Building Insurance

All, Insurance, , , ,

You can’t put a price on feeling safe and protected in your home. Building insurance is probably one of the most important types of coverage that you’re likely to get out in your life.

It makes a lot of sense then to think carefully about which type of coverage best suits you and your family. To that end, here’s a quick guide to the basics of insuring your home. Continue reading A Guide to Building Insurance →