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Wed 15th Oct, 2008
Posted in Consumer Credit, Homeowner Loans, UK Finance, mortgages, Homeowners, House buying, Financial products, Property, Financial news, Housing news, Borrowing, Secured loans at 12:58 pm by admin
A report into home information packs (HIPs) by Birmingham Trading Standards has reached pretty damning results.
The packs have not only been slammed as useless, misleading and uninformative, they have also been credited with worsening the housing market situation. Many believe that the added cost of the packs is putting off both buyers and sellers in a market already rocked by the credit crunch.
Many of the packs examined had fundamental errors which could lead to house sales falling through or purchasers only discovering too late down the line that they had been misled.
Omissions were made in areas such as planning permissions and planning history and whether houses were in conservation areas. Whether these errors were made by poor training of HIPs officers or by fundamental flaws in the system was not explained by the report, but neither makes comfortable reading for homeowners or potential buyers.
In a market already suffering due to the lack of home loan availability and with many worried about falling house prices, lack of confidence in HIPs creates a further burden for those buying and selling.
It is unfair to homeowners who are trying to sell that they are unwittingly attempting to sell their home on a false basis and equally wrong that those who are both investing equity and saddling themselves with a massive loan for are buying something that is not what they were led to believe.
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Thu 9th Oct, 2008
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, mortgages, Remortgaging, Homeowners, House buying, Financial products, First time buyers, Credit record, Property, Financial news, Housing news, Borrowing, Secured loans at 1:27 pm by admin
The house price crash is proving to be a boon for many potential first time buyers. Those who have waited for years, ever-frustrated as house prices have rocketed beyond their reach are at last seeing a chance to buy.
With house prices having fallen eleven months in a row (according to figures from Nationwide), buyers poised to step on that first rung are waiting in the wings. So what are market conditions really like?
Well, according to the financial papers, prices are set to still fall, which is why many potential buyers are still holding back.
This may be bad news for those desperate to sell, but for those looking to finally be handed the keys to their own home, the news is great.
Many of these would-be purchasers have been saving up for years, watching prices soar further and further beyond their reach. Provided that they haven’t given up and dipped into their funds, they could be on track to buying their dream home in the next year.
One of the only dampeners that buyers should be aware of is the difficulty right now in getting a loan. Existing home loan borrowers have an easier time, should they find a buyer, as they have a proven credit record on their side and probably a chunk of equity in their property.
Lenders are now asking for as much as 25% deposit - compared to the 100% or even 125% loans that were being offered when prices were still rocketing. Unless you have a good credit record and a hefty chunk of savings, your dream property might not be as close as you think.
So, potential buyers could be wise to use their credit cards and take out cheap personal loans - provided always that they make repayments promptly. By building up a good credit record before they look at getting their home loan, they stand a great chance of getting that mortgage approval they need.
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Tue 2nd Sep, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Consumer debt, Financial products, Unsecured loans, Financial news, Borrowing, Personal debt, Secured loans, Debt management at 11:27 am by admin
One of the most common questions asked here at Interfinancial is “Do you charge a fee?” Many customers come looking for a personal loan but are - quite rightly - wary of paying a Finder Fee before they see the goods.
So, what are these fees and why is it so hard to find a loan these days without stumping up hard cash first?
For many customers, the loan is their lifeline: They have a limited income that seems to either being going out faster than it comes in, or they need cash ASAP to cover an unexpected bill. The last thing they can afford is yet another outgoing.
Believe us, brokers do understand that when you need money, you’re not looking to spend it. However, it’s not just customers who have had to adapt to the global credit crisis; the loans market has changed a lot too.
With fewer loan products available and lenders getting increasingly picky over borrower criteria, we’re working harder than ever to find you that loan. We spend alot of our time checking paperwork, answering questions and searching the market - which increasingly means checking the small print - just to get you quotes.
With so many customers shopping around to get the cheapest loan deal, we’ve always had to stay competitive, but we can only offer the deals that are out there. Many customers have unrealistic ideas about the deals they can get - especially when they are seeking a bad credit loan.
Whilst we don’t expect every enquirer to take us up on our quotes, we do find that we’re spending a lot of time looking for loans for people who don’t realise that cheap bad credit loans are not available from every lender like they used to be.
So, we hope you’ll understand that these fees are not just about us taking your hard-earned cash. We just want to make sure that you’re as serious about loans as we are.
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Mon 1st Sep, 2008
Posted in Consumer Credit, Homeowner Loans, Banking, UK Finance, interest rates, mortgages, Remortgaging, Homeowners, Financial products, Property, Borrowing, Secured loans at 11:52 am by admin
In these days of the credit crunch many lenders are looking to ways to recoup on losses incurred in the last year. If you are looking to get a mortgage look out for the following catches that many lenders slap on in an effort to boost profits.
First of all many mortgages come with exit fees. If you decide to switch loans to another lender or even if you try to pay your home loan off early your lender will charge you an exit fee in order to cover the administrative costs of the mortgage.
These fees have been traditionally around £50 to £100 however many lenders have been including small print in the mortgage agreement which state that exit fees are variable. If you find you have been charged what seems an excessive fee, it is worth checking out. Use the documentation you have to make sure you are being charged the stated amount and if your lender refuses to co-operate go directly to the Financial Services Authority (FSA).
Another thing to consider when agreeing to a mortgage is the standard variable rate (SVR). The SVR is the lenders’ fluctuating rate for borrowing and in general is around 2% higher than the Bank of England base rate. If you are on a fixed rate mortgage for instance, once the deal expires you will automatically be moved onto the SVR.
It is always wise to be aware of when your loan rate is due to change well in advance to give yourself time to shop around. Although your lender should notify you to discuss your options, it is better for you if you are aware of the market, rather than accepting the first rate you are offered.
The financial climate is rather rocky right now, so it is better to have all your facts than to stumble along and find that you have switched from a great deal to one that leaves you considerably worse off each month.
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Fri 29th Aug, 2008
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Savings, Homeowners, Financial products, Spending, Property, Unsecured loans, Financial news, Housing news, Borrowing, Car finance, Secured loans, Home Improvements at 12:47 pm by admin
Reports of a new study done by the Halifax building society puts paid to the idea that Britain is a nation of spend-now, think-tomorrow shoppers, forever borrowing to fund their lifestyle.
The annual Halifax Home Improvement Survey is part of a series of studies undertaken by the Halifax over the last 17 years. This year’s results show that only 5% of people looking to improve their home are taking out a loan to do it.
This may come as a surprise to lenders and brokers, as Home Improvements is the top reason given for taking out a loan. So are many applicants lying?
People are not obliged to use their borrowings for the purpose stated when taking out a personal loan (unless it is for specific finance, like a house or car), so it’s possible that applicants feel that they will be more likely to get the cash if they sound responsible.
The figures show that more people in the 18-34 age group were likely to take out a loan (12%) than the national average, and regional differences come into play too. Despite being the biggest savers, people in Northern Ireland were more likely to take out a loan than those living in London, who saved the least.
As many as 43% of homeowners questioned believed that their improvements would add at least £5000 to the value of their home, and a further 12% believed that the value added would be from £10,000 to £25,000. Homeowners clearly feel that they are using their savings wisely, a picture contrary to the one painted by much of today’s media.
Tony Wilcox at the Halifax commented: “This research contradicts the buy now pay later culture which is so often thought to be prevalent in the UK. The fact that the vast majority of people have saved in advance of spending is extremely encouraging. Using savings for such improvements means savers are really seeing the benefits of putting money aside.”
However, whether these figures paint an acurate picture of Britain today or just an acurate picture of those using the Halifax is another thing. There is no doubt amongst the lenders and loan brokers of Britain that the home improvement loan is as popular as ever.
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Thu 28th Aug, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, Debt Consolidation, Homeowner Loans, UK Finance, mortgages, Remortgaging, Consumer debt, Homeowners, Financial products, Property, Unsecured loans, Financial news, Housing news, Borrowing, Secured loans, Debt management, Missed payments, House repossession at 12:29 pm by admin
An increasing number of households owned on bad credit mortgages are facing repossession as they make late loan repayments.
According to figures out from Standard & Poor, nearly a quarter of all bad credit home loans are now in arrears - many by as much as 90 days. This is up from 22% in the last quarter surveyed and now officially at a record level.
Comparison website Moneysupermarket have commented that this situation is of course attributable to the credit crunch, as nearly all homeowners have been faced with increased interest rates. For families who were already on a higher than average rate, a price rise can make it impossible for repayments to be met.
Additionally, the tighter lender criteria now in place across the loans market has made it nearly impossible for families to find cheap loans when a fixed rate deal comes to an end.
With fewer loan products on the market and many lenders pulling out of the sub-prime loans market, borrowers are having real difficulty in finding a bad credit loan at a price they can afford.
With reports on an increasing number of repossessions taking place and uncertainty in the jobs market, UK debt charties are bracing themselves for floods of enquiries. As colder weather sets in and fuel requirements rise, more families are likely to be plunged into the cyle of bad debt.
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Fri 1st Aug, 2008
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Credit Card, Consumer debt, IVAs, Financial products, Spending, Unsecured loans, Financial news, Borrowing, Personal debt, Secured loans, Debt management, Budgeting, Missed payments at 10:35 am by admin
TDX Group, the organisation behind the Group Debt Index, claim that there has been a significant rise in the number of debt management plans taken out in recent months.
The Group claim that debt management, such as Individual Voluntary Agreements (IVAs) will rise by a further £5 million by Christmas, growing steadily by year end.
Mark Onyett, chief executive of the TDX Group said: “We’re already seeing far higher numbers of consumers struggling with personal debts and the pressure is set to intensify over the coming months.”
The research showed that an increasing number of people with financial problems are finding it difficult to make repayments on loan and credit card debts.
This accords with research showing the house repossessions are steadily climbing and a rise in people approaching debt charities for advice.
Since the start of the credit crunch many people have tightened their belts, but it simply isn’t enough.
Whilst most families are wise enough not to extend their credit with further personal loans, the increases in the cost of living has pushed many families deeply into debt.
Unfortunately, this Christmas could see many families hard pushed to pay their bills, let alone have the festive season of their dreams.
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Fri 27th Jun, 2008
Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, mortgages, Remortgaging, Homeowners, Financial products, Property, Financial news, Housing news, Borrowing, Secured loans, Bank charges at 1:06 pm by admin
The Chancellor of the Exchequer, Alistair Darling, has indicated that intervention may be needed in order to raise the amount of fixed-rate home loans available lasting up to 25 years.
Mortgage lenders have been accused of lending fixed rate home loans on only a short-term basis in order to maximise their profits. This might be good for the lender but is not good if you are looking for a new mortgage and now the government is considering intervening on the consumer’s behalf.
What lenders are currently doing is negotiating a fixed-rate deal to last only a short period of time and then giving us the option to renegotiate at the end of the period. We as the consumer are then left with the cost of footing the bill for the arrangement fees each time we have to renegotiate.
Although the typical home loan rate is high and still rising, more and more homeowners are looking to change to longer-term fixed-rate mortgages. This gives homeowners more financial stability as it is easier to budget for the future. So far most lenders have only increased the number of short-term fixed-fixed rate loans.
The rest of Europe offers many more fixed rate loans so why do we in Britain not have that option available to us? If the government does intervene homeowners could feel the benefit of much more financial stability as well as not having to face the hassle of going back to the lender every two or three years to renegotiate a new fixed-rate.
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Wed 25th Jun, 2008
Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, mortgages, Remortgaging, Homeowners, House buying, Financial products, First time buyers, Property, Financial news, Housing news, Borrowing, Secured loans at 1:10 pm by admin
While bad news about the property market is easy to come by these days, there must be some good news out there. We round up what economists and experts are saying about the property market.
First of all David Miles, chief UK economist for Morgan Stanley warned that house prices are going to drop by 10% in the coming 12 months. Mr Miles believes that house price growth was largely fuelled by speculation that prices would always continue to rise as well as the belief that the number of people buying properties would increase by 10% in each coming year.
However Mr. Miles also believed that falling house prices would not be such a bad thing for the economy since it would help redress the affordability issue in the market which has spiralled out of control in recent years.
Meanwhile, Capital Economics chief economist Roger Bootle predicted that prices in 2008 would drop by only 3% followed by the same amount in 2009, an optimism that many wish were true.
The reality is that thousands of pounds have alreeady been knocked off the price of the average house in the last six months and prices are set to fall further.
Mr. Bootle says that the drop in house prices has little to do with the credit crunch and more to do with a drop in interested buyers, the number of which have been falling for the past six months. Additionally, with home loan rates still high, despite the three base rate drops since last December, many borrowers are actually unable to get the loan they need to take advantage of lower house prices.
According to Mr. Bootle the two fundamental reasons for the house price slump is the 5 consecutive interest rate rises between August 2006 and July 2007 and the fact that the property market is now too expensive for most potential buyers.
Whatever the reason, there is no doubt that house prices are falling, and in what has been described as an over-inflated market, this is probably no bad thing.
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Mon 16th Jun, 2008
Posted in Consumer Credit, Personal loans, Debt Consolidation, UK Finance, interest rates, mortgages, Consumer debt, Inflation, Homeowners, House buying, Financial products, Property, Financial news, Housing news, Borrowing, Personal debt, Secured loans, Debt management at 1:21 pm by admin
There are mounting fears that the Bank of England is losing its grip on the economy. A combination of rising food costs, fuel hikes and other price rises are stoking inflation which should mean raising interest rates for the Bank.
However as a result of the global credit crunch, banks are starting to hoard money instead of lending which is putting downward pressure on house prices and pushing the monetary policy committee (MPC) towards actually cutting the base rate. Even in this atmosphere of falling house prices, would-be buyers are finding it hard to secure a home loan to make a purchase they can now afford.
The credit squeeze has created much uncertainty in the economy and the nine MPC members seem very reluctant to actually cut interest rates. The members are facing a dilemma in that domestic inflation is heading in one direction while at the same time the international money market is actually going in the opposite direction.
When the Consumer Prices Index went up by 2.1% - which is above the government target of 2% - it would, under any other circumstances, signal an increase in interest rates in order to bring about higher borrowing costs. The interest rate at 5% is still an expansionary rate which will only fuel higher inflation, putting inflation up again to a more neutral level will hopefully neither dampen nor stoke the economy.
However the credit crunch is pulling for interest rates to come down. Uncertainty in the banking sector has prompted banks to cut lending to other institutions and instead hoard cash. Customers are reporting difficulty in securing personal loans, especially for debt consolidation, as lenders are either unable to access the funds, or simply unwilling.
Bank of England governor Mervyn King has warned the MPC that the credit crunch could get even worse in the coming year unless interest rates are cut.
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