An insiders guide to knowing the ‘ins and outs’ of the mortgage industry for you
to get selling, get buying and get a good understanding.

These days everyone wants things ‘now’ there is no waiting, not a lot of saving and more increasing amounts of debt. These factor’s can sometimes be attributed to understanding, they say knowledge is power and in the mortgage industry, knowledge and understanding will not only give you power, choice and options, you will save money if you have a understanding of products and your needs.

There are a lot of products on the market place, even now when we are experiencing one of the worst economic downturn’s for decades, all offering to give you what you want.  However many can end up costing you a lot more than anticipated and there can be huge penalties for exiting early due to lack of understanding and lack of your more needs.

Sorry everybody!

I have been very busy in the last week, the house searching saga continues after the vendor (seller) messes me and the estate agent around (more of this later!).

Well interest rates have gone down again to a mega low 1%, all I know is when I finally get a house my mortgages is only going to be £300 per month!!!! So yes I am happy!!!
Unemployment has gone up to all time high, I am just happy that I still have a job even if it is not in my most knowledgeable and favourite industry (mortgages), there is always a compromise!

The place Sarah and I found was great, right place, right size, and was in great state to add value. Well I placed an offer straight away and only about 10% less than the asking price as it had been on the market since just before Christmas,  the agent tells me they have some other people looking around just like I said in my other blog post. So after a week of tooing and throwing, it comes to the weekend that has just gone by where my offer has increased but only slightly.
Again he wants the weekend to see if any other interest is aroused – but nothing! Now the seller wants 2 days to think about my offer (he has had 2 weeks already!), so today comes and he NO LONGER WANTS TO SELL!!!

It is so frustrating, I have now lost one due to not moving fast enough and under estimating the seller, now I have lost one due to the seller wasting everybody’s time! Arrggghhh!

The search continues and I have some viewings lined up for the weekend (my weekends are for chilling not viewing properties he says!) with any luck the seller will be in a good position...

Now the mortgage, I need one with very little penalties or none at all as I want to remortgage once I have done it up to a better rate. Rates at 80% seem to be getting very attractive at my price bracket and very very affordable, just need to find one rate keep my eye on it and then get the house I want, and BANG it’s all done!

Easy in theory!

So it was an eventful weekend, although I am very puzzled...

Why you ask?

Well I viewed a property on Friday just gone with my partner Sarah, we though this one could of been it.
Great potential, on at a reasonable price but is negotiable, anyway ventured around the area to see how quiet the road was and all good.
Agent was late by nearly 10 minutes (which already put a bad taste in my mouth!) got in and had a good scout about, we noticed with this type of property the ceiling in the kitchen was highish and the same with all the other rooms apart from the lounge.  Someone had brought it down for some reason and it made the whole flat look very odd!

Apart from that it seemed great, Sarah kept giving me the eye all the way though the flat saying she wanted it. To be fair I wanted it but not at that price – Sarah had before told me not to go to low (which I always think “you don’t ask you don’t get”) so it went a modest £12,500 below the asking price. The agent then proceeded to tell us how much the flat was in great demand for viewings and there were some booked in for Saturday, so if we were to put a offer in and she got a hold of the vendor it is likely that he would want to wait until they had had a look around. This didn’t faze me as I could kind of tell she was not telling the truth to pump it up a bit...

I said I was happy with the flat but it did need a bit of work, our mortgage was ready to go but we only had until Saturday evening to do the full application otherwise the mortgage product we had pre booked would expire. So with that in mind the offer was only on the table until Saturday.

The agent did phone later on that evening just before 6pm, which she said that she could not get a hold of the vendor to let him know about our offer. So we expected a call by end of play Saturday Monday at the latest, not only did we NOT get a call on Sat or Mon but today Tuesday about an hr ago! Apparently she could not get hold of the vendor??

This made me really upset because we have had no contact until today, no call to check in or to reassure us nothing...

Anyway on Friday we checked Zoopla.com and mouseprice.com, and to my dismay a lot of the prices were a lot lower than I expected (not to mention to one we wanted).  I know I should of checked before hand but did not have time, anyhow it changed my mind about the place which was good because of the way we are getting treated by these agents in my area...

The search goes on hooray! Really want to get something sorted this month!!

Anyone else want to let me know about there search be it good or bad????

Deals around the 90% seem to be disappearing fast ( I know that if you have poor credit then 90% is a no

go area but even if you have squeaky clean credit they are going fast, so a 10% deposit there are very few deals about. There was a fantastic 5.74% with Britannia but that has been withdrawn.

It’s been nearly 4 weeks since Sarah (my partner) and I have been searching for a property and after losing 2 properties due to property developers jumping in there with cash we are back to where we started! 

I often watch “location, location, location”, and wonder why the people that Phil & Kirsty showing around certain properties get so emotional over a property??!

I certainly know how they feel now!

There was one flat that we looking at and it was perfect in every way, it was in a get area, not bad condition (opportunity to make it your own), no chain, etc. I automatically fell in love with it and so did my partner, so after seeing it on a Saturday we discussed everything we would need to do and did our sums over the rest of the weekend.

Come Monday morning I proceeded to call the estate agents promptly at 09:00 to put in our offer (about 10% below the asking price) and what do you know, developers had put in a cash offer about 10% off the asking price on Saturday afternoon and she had accepted it (they could complete in 10 days!!).

Sarah was heart broken and so was I to be perfectly frank as we had looked at about 50 or so properties and this one had ticked most of the boxes, to be honest I did not think it would affect me as much as it did but I am sure a lot of people out there can relate to me on this as every other potential property you go in to you just end up comparing it to the one you cant have!

So the search continues, I really thought that we would have completed and moved in by the end of March when our tenancy runs out in our current property that we are renting. Thinking positive is a must, especially when you read the news and its nothing but bad news. However when I register with the local estate agents this is not the case (I am not sure if it is only where I live) they seem to have lots of potential buyers but not very many properties coming on to the market. So when one comes on that has bags of character it gets snapped up by developers who have them on their payroll! (Well that’s what I think!).

Got another viewing this evening after work (should be doing work now to be honest) hopefully it will be a good one...

Anyone else house hunting??

Let me know about your experiences!

I know you’ve herd it for the past year or so from the media, but its “official” now it’s finally here!

A recession is something that the government are trying very hard to avoid, it affects all people but more importantly it affects homeowners greatly. This is because of the way interest rates may go high very drastically or inflation fluctuations could happen.

Even the word recession can have a nasty affect on a booming market, until the government take urgent action on getting the industry though this very troubled time.

You’re payments on your mortgage

Like I said above homeowners seem to get a bad ordeal when it comes to a recession so when making payments on your mortgage becomes difficult naturally repossessions climb too which is sad factor to take into account.

All I here on the news is more job cuts and when this vast job cuts happen it makes everyone else very nervous, I can imagine company bosses even putting a holt on pay increases until we have gotten ourselves out of this.

Best pointers for having a fixed rate

For all the homeowners that have a fixed rate and are not happy for one reason or another, I say be pleased as those rates at 1.50% don’t have that long before they climb again and all you guys will be safe. It is something that I hear a lot, “I wish I had a tracker right now” well yes now you might be better off but at the end of your fixed rate look back and see with all the movements if you are better off then. You have security and stability at the time so you have got it! Remember having a tracker is a risk/gamble!

Worst points of not having a fixed rate

At the moment where interest rates are as low as they are I think it is fair to say that everyone would like to have their mortgage on a tracker of some sort to benefit from lower mortgage payments. So having a fixed rate when interest rates do go this low you will not be able to benefit, but be stuck for however long you have fixed in for.
If you really do want to try and get out of a fixed rate be aware as they have high penalties. But speak to a advisor/broker to see if it is worth it, but also if you will be financially better off.
 
Protect your self!

I am not trying to suck eggs but when we are not in a recession and when unemployment is low and jobs are stable it is a good idea to put some money away, this is to protect you and importantly your home. I know it is very easy to say and it may sound a very easy precaution, but it is some thing that people look over and do not see the importance. This is so when a recession does hit you are not caught out, it is also worth talking to a broker/advisor to see if moving your mortgage if you are on a tracker like product to a fixed rate mortgage. I say this because when times are good and stable moving to a fixed is going to provide a more secure and stable option.

Look into protecting your mortgage payments

Look into payment protection insurance to cover your payment should you fall;
I.    Illness
II.   Loss of job

It is relatively cheap and gives you the peace of mind should the worse happen you are covered.

REMEMBER;

Try and get independent whole of market broker and advisor to guide you in the right direction.

More info found on just how hard it is to sell a house

Because of the lack of funds available for first time buyers the market has slowed down drastically. I mean where I live in Dorset it is becoming apparent that the market is dead, there are a few estate agent boards outside people houses but not very many “SOLD” signs though. People out there just don’t know what to do.

Are prices going to go down more – if so then I will wait, are banks going to pass rate cuts though to us first time buyers with 10 – 15% deposit, I think it is all a waiting game and this waiting game is making it very hard on homeowners that want to move?

All homeowners want to get the best possible price for their home but in this market where the average time frame for a house on the market is unbelievable 300 days!

How minimise the time of my home on the market in this troubled market.
There are lots of strategies for selling your home and to minimise its time on this troubled market. I am not going to teach how to suck eggs but if your house has been on the market for 300 days and it has not sold and you have not adjusted the price, the sad thing is will stay on the market until the price is more realistic (especially where prices are falling). The price of your home is a major issue.

It is very important that when your home is on the market you do everything possible to entice those small amount of buyers that are out there.  I don’t mean adding an extension, nothing drastic like that because your unlikely to get the value back when you sell it. But doing up your bathroom is good place to start if it is urgent need of it. Tidy up the front of your home and if you have extravagant taste in colour its best to repaint it to a more neutral colour.

The huge problem we have here is that despite the bank of England slashing rates, mortgage approvals are at an all time low and more importantly there are just no buyers!

The Times did a survey on the best place beating the current UK slump and the 10 worse, have a look very interesting (click on best & worse)!
BEST & WORSE

If you’re looking to move to a larger home then you can do so at much lower cost!

The more expensive the home the more the value has dropped but as you go down the chain it seems to get less affected.

This would make it easier for a person in a 1 or 2 bedroom place to move to some where with a bigger better garden or an extra bedroom.  Estate agents are saying that this is the number one reason to sell at the moment, more for your money for less!

Let me explain, when prices were at their peak house prices from all areas were moving at the same rate. But in this declining market there are certain areas, streets or buildings that hold their value a lot better than other ones.
Because of the lack of mortgages available at the lower end of the market (lower deposits), this is where the biggest decline is happening.
People that are looking to move from their one or two bedroom now just have find an extra £31,000, but only a year ago they had to find £41,000, this is according to propertyfinder.com.

All because the average two bed has fallen 12% in a yr to £160,600, but only 8% for a one bed £129,874. People at the bottom of the market should find it mush easier to move up in cash terms than they have been able to in some time. But on the other hand the average 4 bed place has fallen from £390,343 to just £370,276. As you can see 3 beds are falling faster so the move to a 4 bed has actually increased form £141,733 in 07 to £151,235 at the end of 08.
Estate agents recon homeowners are willing to take hit on their own property because they can get better deals up the chain. So the property who one though that was out of reach maybe not!

 If you are thinking about maybe taking that jump up the ladder, then look to see what you want to buy and then see what discount you can get out of it – before you put your own house on the market.

Simple steps to buying

I am in the process of searching for a bargain property and it quickly became apparent just how stressful the whole ordeal actually is! My partner who has a bit more time than me is doing most of the property searching and then we are narrowing down the property hopefuls together. She is very knowledgeable in property but when it comes down the actual process from putting in an offer to handing over the deposit and getting the mortgage she knows very little. This made me think about all the first time buyers and sellers who literally go in blind or rely heavily on their broker/advisor or parents. But what about all those people out there that don’t know the process??

I try my hardest to know as much as I can when it comes to me handing over my own money, not just because I am a bit tight! But because I like to know what I am getting into and what I can expect, I want to know the process.
So I have composed a simple steps guide for those people.
I have broken it down into 4 steps and this is again broken down into 16 points.
If anyone else has experiences or anything I may have missed please contact me!

First Step

1.    Firstly I would write down all your priorities and what you want out of buying/selling you home.

2.    Register with your local estate agents, and look on the property websites to find all the potential properties that you like.

3.    I would also think about getting a few quotes from some solicitors and conveyancers.

4.    With all your properties listed, get viewings arranged.

5.    Narrow the properties you have seen to the best 2 or 3.

6.    With the 2 or 3 properties you have, research the vendors (seller) and property further. Position they are in (no chain, offer accepted on another need and to sell this property etc), years left on lease, ground rent, etc.

7.    Now is the time to research your mortgage, your mortgage broker/advisor. Now from the information you have gained you will need to get a pre-mortgage arrangement sorted (also know as a decision in principle, application in principle). This will give you a kind of “pre YES” to having a mortgage based on some basic info the lender will ask you will also be pre credit scored at this point. (Remember it is not a guarantee, just a preliminary yes).

8.    Now is this time to put an offer in the property you like.

SECOND STEP

9.    Hopefully your offer will be accepted, contact your mortgage broker/advisor, lender, he/she will proceed on getting the full mortgage sorted for you. You want to also contact your solicitors so they can carry out all the searches on the property and start contract negotiations.

10.     Now is a good time to get a survey done on the property, a very basic one is called a homebuyers, and more in depth one is called a full structural survey. A full structural survey is worth while for an older property.

11.     Also at this point is where your chosen mortgage lender carries out their valuation to see if it suitable to have a loan secured to it.

THIRD STEP

12.     Nearly there! At this point your solicitor will have the contracts ready to exchange with the other sellers solicitors, you should have a mortgage offer at this stage too.  A 10% deposit (of the purchase price) is normally paid into your solicitors account and your solicitor will forward it on to the seller. More importantly if you pull out at this stage you will lose your money. You will have a date to which you can complete on too.

FOURTH STEP

13.     Between exchange and completion (3rd ad 4th steps) your chosen mortgage lender will transfer the mortgage funds into your solicitors account, this will be sent to the sellers solicitors account on the completion day. Your solicitor will also prep the paper work for you to become the new owner.

14.     Your solicitor will now pay the stamp duty on your behalf.

15.    Your mortgage is now in place

16.    Your mortgage advisor/brokers work is now complete (your fee to them should normally be made to them).

ALL DONE!!

Interest rate frenzy

Last week the Bank of England decided to reduce UK interest rates to a historic low of 1.50%! As you can see by the graph you can see how this ressession is affecting our interest rates, and how the bank of england are trying to soften the world wide crisis. 

The best way to work out how much you will save (for the people that are on a variable rate) the ENTIRE CUT will be passed on, so for every £100,000 borrowed this should save about £40 (give or take a few pounds).