Category Archives: Mortgage

Mortgage

Checking & Savings, Financial, Financial Services, Insurance, Mortgage, Personal Finance, Retirement

Barclays Financial Planning Offers An Effective Retirement Planning Solution As An Alternative To Stakeholder Pensions

Barclays Financial Planning has launched two new pensions products, designed to offer an effective retirement planning solution as an alternative to stakeholder pensions.

Both of the new offerings combine the traditional elements of a personal pension, with the addition of considerable investment flexibility, making them bespoke to individual clients’ needs. Clients can choose either a basic investment solution, comparable with a stakeholder pension, or the choice to diversify their pension assets, including the option of a ‘Select Choice’ fund proposition.

David Stuart, Director of Investment Advice and Products at Barclays Financial Planning said: “We have launched our new pensions to offer the everyday pensions investor something much more flexible than a stakeholder plan, but without the more complicated structure or cost implications of a full Self-Invested Personal Pension (SIPP). We offer the structure of a stakeholder pension with the option to place pensions assets in something more than a basic UK fund. In current market conditions retirement planning is still as important as ever, and we have seen clients wanting to look at alternative investments which would not be available in a basic stakeholder pension. This new product gives them that option.”

Barclays Financial Planning provides access to fully qualified financial planners in any branch of Barclays Bank, who can advise individuals on the pension solution most suitable for their circumstances. As well as pensions advice, Barclays Financial Planning can give advice on all areas of financial services.

About Barclays Financial Planning

Barclays Financial Planning (BFP) provides tailored financial advice on life, pensions and investment products across a carefully selected range of products from a range of product providers according to customer needs. Barclays Financial Planning is one of the largest financial advisers in the UK, with over 700 advisers. A no obligation financial planning consultation is available to personal, business and corporate clients, and Barclays Financial Planning advisors have a range of solutions available for businesses wishing to discuss succession planning.

Customers can contact Barclays Financial Planning through any branch of Barclays Bank, or by calling 0800 587 2024.

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Financial, Financial Services, Insurance, Insurance Services, Mortgage, Personal Finance, Retirement

Prudential Research Has Revealed The Importance Of The Family Home With Millions Of Childhood Bedrooms Preserved

New research conducted for Prudential shows that more than 4.6 million UK adults have their former bedrooms preserved by parents who cannot quite let go of earlier memories of their children.

A staggering 42% of UK adults (around 4.6 million people) whose parents still live in the family home say their former bedroom is still decorated as it was when they were a child, with 44% sleeping in their childhood bedroom when they return to see their parents.

It is not just the parents who hang onto those childhood memories, almost half (46%) of UK adults whose parents still live in the family home say they still regard their childhood bedroom as their room despite moving out.

However, much more than just the decoration remains unchanged. A third (33%) of UK adults whose parents still live in the family home say they sleep surrounded by childhood photographs, 27% with old school books and folders and 20% with their childhood toys when they visit their parents.

The research from Prudential also showed that a further 10% face the dubious retro-pleasure of childhood posters and 22% say their former childhood bedroom still contains trophies, awards and certificates from their formative years.

Keith Haggart, director of Prudential Lifetime Mortgage said: “The connection with the family home remains strong throughout our lives and our research has shown that around a third of UK adults say the home they grew up in is still lived in by their parents, so it is understandable that many people are loathe to sell the family home even if it means having to struggle to make ends meet, especially in retirement.

“But there are other options available and equity release can provide a good way for people to get hold of the money they have tied up in property equity without having to sell their family homes and downsize.”

In addition to preserving their childhood bedroom, 60% of UK adults whose parents still live in the family home say their parents store a range of belongings for them, with eight per cent having left letters from former boyfriends or girlfriends at their parents home, four per cent having left animals and pets with their parents and eight per cent using their parents house to store bicycles.

The most popular items to store at parental homes were school books and folders (left by 34% of UK adults), with photographs (32%), books (31%) and clothes (20%) all scoring highly.

The information contained in Prudential UK’s press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk.

All figures, unless otherwise stated, are from Research Plus. Total sample size was 1033 adults. Fieldwork was undertaken between 15th and 21st July 2008. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

About Prudential
Established in 1848, today Prudential plc is an international financial services company with a product range which extends from personal banking, insurance, pensions and retail investments, to institutional fund management and property investments.

In the UK Prudential is a leading life and pensions provider with around seven million customers.

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Financial, Financial Management, Financial Services, Financial Solutions, Loans, Mortgage, Personal Finance

Think Money Have Emphasised The Importance Of Good Future Planning With Regard To Interest-Only Mortgages

Responding to the news that over a million homebuyers have been offered interest-only mortgages with no savings plan to repay the remaining mortgage debt, financial solutions company Think Money have advised all homeowners on interest-only mortgages to carefully consider their plan of action for the future, adding that failure to do so could result in significant financial hardship later in life.

LV= estimate there to be around 2.9 million interest-only mortgages active in the UK. Of these, the report claims that 1.3 million – accounting for £74 billion of mortgages – have no specific savings plan in place to pay off their remaining mortgage debt once the interest-only period expires.

That means that around 45% of interest-only mortgages carry no specific capital repayment plan. LV= claim that 41% of these homeowners are relying on rising property value and cashing in equity to pay off the remaining mortgage capital, while 21% plan on using other investments.

More worryingly, 13% of respondents said that they did not know how they would pay off their remaining mortgage capital, while 12% said they hadn’t given the matter any thought.

Mike Rogers, LV= Group Chief Executive, commented that the previously booming housing market led many interest-only mortgage holders to believe the increased equity in their home at the end of the interest-only period would enable them to repay the mortgage, adding: “Many of the homeowners we polled appear to have an over-optimistic outlook on their ability to pay off their mortgage capital at the end of the term. Or worse still they are turning a blind eye to the issue.”

A mortgage expert for Think Money was quick to warn of the dangers of such an attitude towards interest-only mortgages. “There are two main ideas behind interest-only mortgages. Some homeowners simply want to reduce their mortgage payments in the short term to free up extra funds – after which normal (but slightly higher) mortgage payments resume.

“Others choose to go interest-only for the entire mortgage duration – typically 25 years – in which case the matter of repaying the remaining mortgage capital requires more in-depth planning. It would appear that this is an area which many interest-only mortgage holders have failed to address.

“The advantage of such long-term interest-only mortgages is that it allows control – the homeowner is responsible for saving towards the final mortgage repayment, and they can choose to pay more or less each month if necessary. But this is something which requires great discipline, and it also relies on the homeowner’s finances staying relatively consistent for the duration of the mortgage.

“The safest way to run an interest-only mortgage is to agree a capital repayment plan alongside the mortgage – or, at the very least, make frequent, substantial deposits into a savings account. Relying on increased equity or other investments are potentially risky, and could result in the mortgage holder losing their home at the end of the interest-only period.”

The Think Money spokesperson also emphasised the importance of professional mortgage advice before making any decisions about mortgages.

“Speaking to a mortgage adviser who knows the market can ensure that the homebuyer is well prepared and fully understands what is involved. That’s especially important with interest-only mortgages, as it’s a matter of the homeowner’s future financial security.”

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Banks, Financial, Home Equity, Loans, Money, Mortgage

US Mortgage, a diversified mortgage products and services provider that offers net branch affiliate programs, commented today about how mortgage rates held even despite last week’s historic changes, which has resulted in a time for consumers to take advantage of historically low interest rates

In a time of historic changes last week in the US financial markets, mortgage interest rates held pretty much even across the board. With the market making the largest one-day drop in decades and also one of the largest one day gains in a long time to mention nothing of the historic $700 billion bailout package, the country would have expected something to happen with mortgage rates. Instead, the country experienced the smallest changes in mortgage rates it’s seen all year.

US MortgageMany experts think the markets reacted somewhat positively to the bailout but at the same time the economic outlook has soured. Additionally, the initial positive reaction to the bailout has softened as some have started to question whether the bailout will actually work. Subsequently, in a week of unprecedented changes in the mortgage industry, mortgage rates didn’t move an inch.

“Despite all the historic moves economic moves as of late,” added Frank Kuri, Vice President of Net Branch Development at US Mortgage Corp.,“there has never been a better time to take advantage of historically low interest rates. Our net branch affiliates are ready to help our customers leverage these opportune times.”

About US Mortgage
Headquartered in Pine Brook, NJ, US Mortgage is a licensed mortgage banker founded in 1996. US Mortgage’s owners and principals founded West Jersey Community Bank, a de novo corporation, prior to the incorporation of US Mortgage. Sharing the vision of a national, multi-platform, mortgage banking organization, the company subsequently broadened the business with the formation of CU National Mortgage, a national provider of transparent mortgage services for credit unions; US Capital Markets, a secondary market resource to investors and sellers; Icon Residential Capital, a national wholesale lender and BranchLink, the branch affiliate program that is bringing US Mortgage to locations throughout the United States.

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Banks, Costs, Credit Cards, Credit Repair, Debts, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money, Mortgage, Personal Finance

Debt Advisers Direct have warned that the squeeze on incomes could become tighter in the coming months

Debt Advisers Direct have responded to findings that Britons’ disposable incomes have fallen by nearly 30% on average in the past two years, warning that the pressure on incomes could increase as the economic crisis progresses, and have advised consumers to take care of any debts as soon as possible.

Responding to research by Abbey Credit Cards claiming that British citizens have seen their disposable income fall by nearly 30% during the past two years,Debt Advisers Direct have warned that the squeeze on incomes could become tighter in the coming months, and have advised consumers to take care of any financial issues, especially outstanding debts, as soon as possible.

According to the research, the average household now has only 25% – around £382 – of their monthly income left after essential costs such as mortgage payments and energy bills have been paid.

That figure is down from £541 in disposable income available to British households just two years ago – a 29% fall.

The research also claims that one in ten spend 90% of their income on bills and other essential costs, leaving only 10% as disposable income.

On average, British households were spending 7.4% of their total income on repaying debts, not including mortgages, the research claimed.

Meanwhile, an average 24% went towards mortgage or rent payments, 17% on household bills, 16% on food, and 8% on transport costs.

British incomes have been put under pressure on two fronts throughout the economic crisis, with costs of living such as energy bills and food prices rising rapidly, and the credit crunch limiting access to additional funds in the form of loans and mortgages.

The effects have been tangible, with overall retail sales gradually declining over the year, and profits for ‘budget stores’ increasing – a sign that consumers’ perceived priorities are shifting as their disposable incomes shrink.

An expert from Debt Advisers Direct said: “Many people consider disposable income a luxury that can be spent on ‘unnecessary’ items, but it’s important to remember that disposable income is also a very important buffer against unexpected rises in outgoings.

“For example, if someone depends on their car to get to work, and they have to pay for a £500 repair with only £200 disposable income, that person could be forced into debt in order to make ends meet. That’s why it’s important for people to minimise their outgoings, and make savings where possible.

“The overall situation has become worse over the past year because costs of living, especially energy prices have risen so quickly. Food and other retail products are now falling in price, but energy prices have shown no sign of doing the same – and this continues to push more people towards debt.”

The Debt Advisers Direct spokesperson added that there are a number of debt solutions that can help to minimise outgoings when finances are limited.

“For people with multiple debts, a debt consolidation loan can be spread out across a longer period of time than the original debts, meaning monthly payments are lower,” she said. “Interest rates can also be reduced, especially when consolidating high-APR debts such as credit cards. However if the debt is repaid over a longer period, the additional interest from this can counteract some of the savings made.

“For debts that are becoming unmanageable, a debt management can help. It involves arranging to repay creditors in smaller amounts, based on how much the person in debt can afford, over a longer period of time.

“As always, we advise anyone looking to tackle their debts to seek professional debt advice beforehand.”

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Financial, Financial Services, Financial Solutions, Home Equity, Money, Mortgage

Don’t Let The Banks Threaten You With Foreclosure

Are you behind in your mortgage payments; by how many months? One, three, six or more? Have you been presented with a Forbearance Agreement that just doesn’t feel right? Or is your bank threatening foreclosure? There is help.

Foreclosure may not be the answer. You shouldn’t have to just give up the fight for your home that you worked so hard to purchase and hold on to. There is another option that your bank may not be forthcoming in talking to you about. It’s called Loss Mitigation. The Housing Rescue Plan, LLC specializes in loss mitigation services.

Housing Rescue Plan, LLC offers several loss mitigation options for homeowners facing financial hardships such as unemployment, separation or divorce, medical bills, reduced income, job relocation or others. The loss mitigation options H.R.P., LLC will discuss with you include: loan modifications; VA loan modifications; short payoff (short sale); deed in lieu of foreclosure, repayment plans, partial claims for FHA mortgages and special forbearance agreements. The H.R.P., LLC team will work in conjunction with you and your lender to come up with a plan of action that works for both sides. The best part is you may be able to work out an agreement with your lender that will allow you and your family to stay in your home. The H.R.P., LLC office is operated by Dr. Michael W. Cantrell, Sr. creator of the Federal Housing Recovery Plan and president of H.R.P., LLC. Dr. Cantrell has a 95% success rate negotiating with lenders.

Dr. Cantrell has over 19 years of mortgage experience in various roles. He, together with his team of trained counselors are available now to talk to you about your current housing situation. Your initial consultation is free. Visit www.housingrescueplan.com for more information and an online application to get started today. Housing Rescue Plan, LLC is working with homeowners, keeping the American dream alive.

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Banks, Financial, Financial Services, Financial Solutions, Interest Rate, Loans, Money, Mortgage, Personal Finance

Think Money have welcomed the Bank of England’s shock base rate cut to 3%, commenting that the mortgage market could benefit as a result

Following the Bank of England’s shock base rate cut to 3%, financial solutions company Think Money have welcomed the news, commenting that firm action is more likely to encourage banks to consider cutting their interest rates accordingly. However, they added, there are still some factors that may prevent lenders from passing on the full 1.5% cut to their mortgages and loans.

The base rate cut, from 4.5% to 3%, is the biggest cut since the Bank of England lowered the rate by 2% in 1981. The base rate now stands at its lowest point since 1955.

Many economists had predicted an aggressive cut in base rates, but the extent of the cut was still unexpected. Most predictions in the run-up to the Bank of England’s announcement pointed towards a 0.75% or 1% base rate cut – and only a few days previously, 0.5% seemed a more realistic figure.

A spokesperson for financial solutions company Think Money said: “It would seem that the Bank of England are acting based on Mervyn King’s recent statements that the recession would be long and drawn-out, and rather than take the base rate down in small increments, they have ‘bitten the bullet’ and taken it down further than most people expected.

“Potentially, it’s very good news for people and businesses looking for loans, but not such good news for savers.”

However, the spokesperson stressed that as with previous base rate cuts, there is no guarantee that lenders will pass the full cut onto their mortgages and loans – although the extent of the cut could at least increase the impact on lenders’ behaviour.

“There will still be a lot of uncertainty with regards to what will happen in the economy in the future, as well as some apprehension amongst banks as to how much they might lose from things like defaults on mortgages as the recession takes hold,” she said.

“The base rate cut only affects how cheaply lenders can borrow funds from the Bank of England. It does not directly affect the LIBOR rate, which is the measure of how expensive inter-bank lending is. Since lenders rely heavily on borrowing from each other to fund their loans and mortgages, they may well be slow to bring their rates down.

“That said, the Bank of England will have no doubt had this in mind when deciding on their base rate cut – and it may well be that such a large cut is sufficient to encourage some lenders to bring their rates down to more competitive levels.”

However, a number of banks appeared to take defensive action even before the 3% base rate had been announced, with several lenders removing tracker mortgages from their product ranges on Wednesday and Thursday morning, while others upped their interest rate margins on tracker mortgages.

“This may just be a temporary measure by lenders in order to avoid any risks in the short term,” the Think Money spokesperson said. “A number lenders have said they will be taking some time to think about their next step, so it’s possible that we will still see some significant interest rate cuts in the next week or two.”

The spokesperson was also keen to emphasise the importance of good mortgage advice. “With so much uncertainty surrounding what will happen with mortgage rates in the next few months, it often pays to speak to a mortgage adviser who understands the market. They should be able to point you towards the best mortgage deals for your circumstances, which could save you a lot of money in the long run.”

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Think Money Have Said That The Recent Drops In The LIBOR Could Mark The Beginning Of A Recovery In The Mortgage Market

Responding to the news that LIBOR fell on Wednesday following the European Central Bank (ECB) and the Swiss National Bank’s $254 billion (£145.7 billion) injection into the wholesale funding markets, financial solutions company Think Money (http://www.thinkmoney.com/) commented that this could mark the start of a recovery in the mortgages and loans market, so long as the conditions remain in place for lenders to continue to do business.

Despite last week’s half-point base rate drop, which was aimed in part at encouraging lenders to offer lower interest rates on their mortgages and other credit products, three-month sterling LIBOR – the rate most banks base their mortgage rates on – has been slow to respond.

LIBOR reflects the willingness of financial institutions to lend money to each other – and therefore the amount of cash flow in the industry. As such, it affects the levels of loans, mortgages and other forms of credit they are willing to offer to consumers. In short, the higher the LIBOR is, the more expensive it is to obtain the funds necessary for lending.

But on Wednesday, LIBOR fell from 6.249% to 6.21%, following around four weeks of continuous rises – not a huge drop, but one that could indicate that banks may be becoming more inclined to lend to each other, following the first cash injections from the Government’s bailout scheme.

A spokesperson for Think Money said: “This is a small but encouraging sign that the mortgage market may be on its way to improved levels of lending. What’s more, it’s evidence that the first stage of the Government’s bailout scheme may be working, which is good news for the economy in general.

“The main obstacle to mortgage lending over the past year has been lenders’ unwillingness to take risks. That’s the main factor behind the short supply of mortgages on the market, and the reason banks weren’t lending to each other, hence the high LIBOR.

“The aim of the bank bailout is to artificially increase cash flow within the financial markets, which should then give lenders an incentive to start doing more business with each other and with consumers – and it would appear that it has worked, for the time being at least.

“What we will now be looking out for is whether the LIBOR will continue to fall, and by how much. If it can drop to a figure somewhere near the 4.5% base rate, we may begin to see healthy levels of mortgage lending taking place once again. But the continued success of the banking bailout scheme will be central to ensuring this can occur.”

The spokesperson added that although market conditions are currently difficult, there are still plenty of mortgage deals available. “We haven’t seen a complete freeze in mortgage lending – just a tightening in lending criteria across the market. Lenders still need to be competitive to do business, so the deals are still very much there – it may just take longer to find the right deal.

“Despite the uncertainty in the housing market, now could be a good time for first-time buyers, since house prices are relatively low, and therefore mortgages are relatively cheap. If house prices do begin to rise again soon, it could prove to be a very good move financially.”

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Bankruptcy, Checking & Savings, Financial, Financial Services, Financial Solutions, Loans, Money, Mortgage, Personal Finance

Financial Solutions Provider Think Money Has Welcomed The Bank Of England’s Recent Move To Enhance Liquidity By Accepting A Broader Range Of Loans And Other Assets As Collateral For Loans To Banks

Responding to the Bank of England’s recent changes to its policy regarding collateral, mortgage provider Think Money welcomes the move and looks forward to the increased levels of liquidity it should provide.

On 3rd October 2008, the Bank of England announced that it would expand the range of assets it deems acceptable collateral for the loans it grants to financial institutions. The range, according to the Bank of England website, now includes ‘AAA-rated asset-backed securities of some corporate and consumer loans; and approved highly-rated, asset-backed commercial paper programmes, where the underlying assets would be eligible if securitised’.

This action, the website continues, ‘is addressed to the ongoing strains in term funding markets, and adds highly-rated corporate securitisations to the residential mortgage securities that are already eligible’.

“At Think Money, we welcome this change,” said a spokesperson for the financial solutions provider. “While some may feel alarmed that the Bank of England felt such a move necessary, it’s nonetheless reassuring to note that the institution is taking such action before the financial situation deteriorates further.

The current lack of liquidity is a cause of great concern for everyone in the UK, from individuals to banks, mortgage providers and other institutions. “Without a constant, reliable flow of credit, it can be difficult – if not impossible – to carry out their plans, whether it’s a case of a company pursuing a business opportunity or an individual securing a mortgage, remortgage or loan.

“So we’re encouraged to see the Bank taking decisive steps such as this. Banks and other financial institutions own massive amounts of debt these days, from mortgage debt to overdraft debt, so it’s both limiting and frustrating when they can’t use them as collateral, as it’s one of the cornerstones of today’s lending activities.”

According to the Market Notice published on October 3rd, The Bank of England ‘will continue to hold extended collateral three-month long-term repo open market operations (OMOs) weekly up to and including the scheduled long-term repo operation on 18 November’, which suggests that it sees no immediate end to today’s unusual market conditions.

Furthermore, it states that ‘The size of the funds offered at the Bank’s extended collateral long-term repo operation on Tuesday 7 October will be £40 billion’.

Yet despite the size of the operation, the spokesperson for the financial solutions company stressed, it’s important to note that this is no act of desperation. “In the light of the ‘bailout’ recently approved in the USA, it’s important to realise that this move by no means invites lenders to put forward‘toxic’ mortgage debts as collateral. The Bank of England may have broadened the range of assets it sees as acceptable, but it is not prepared to accept any form of collateral which isn’t of sufficiently high quality.”

Furthermore, the Bank of England is exercising a suitable degree of caution: “The Bank may be accepting a greater variety of assets as collateral,” the Think Money spokesperson concluded, “but it’s also valuing them correspondingly and offering, to quote the Financial Times, ‘as little as 60p in the pound for some foreign currency mortgage-backed securities’.”

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Banks, Financial, Financial Services, Home Equity, Interest Rate, Investment, Loans, Money, Mortgage

Despite the economic gloom, Wednesday’s base rate cut could stimulate the economy – and it does hint that the Monetary Policy Committee sees the threat of inflation as lessening, says financial solutions provider Think Money

Responding to the half-point cut to the Bank of England’s base rate, financial solutions company Think Money welcomed its already noticeable impact, and pointed to the implied likelihood of future cuts.

“There’s no question that we’re facing extraordinary issues today, both globally and nationally,” a Think Money spokesperson commented. “As a company, we were pleased to see the Bank of England taking this step – not just dropping the base rate, but dropping it by a substantial amount.

“Furthermore, we’re delighted to see major mortgage providers passing that reduction on to consumers. After so many months of negative news, this could make a big difference to many homeowners’ financial circumstances, as their variable rate mortgages drop from 7% to 6.5%.”

Anyone with a tracker mortgage, meanwhile, is sure to enjoy lower payments at once: The Times predicts immediate benefits for around 4 million people paying home loans that track the Bank’s base rate. ‘Those with a £150,000 mortgage’, it reports, ‘will see their interest-only repayments fall by £63 a month’.

“The same goes for other kinds of credit,” the spokesperson continued, “from secured loans to credit cards: people with tracker deals will certainly profit from the cut, and borrowers with SVR deals will be following their lenders’ reactions closely.”

New fixed-rate loans could also drop in price. “Now that the cost of credit has come down, lenders will be able to pass the savings on, giving their customers a better deal without placing their own profits in jeopardy – something which could have a profound impact on their stability at a time like this.

“Looking beyond the actual cut,” the spokesperson stressed, “it’s equally important to consider the implications – not just what the deal means, but what it says about the Bank of England’s assessment of our economy. First, the cut reveals how seriously it is taking today’s financial troubles. Second, it implies that the Bank is feeling more comfortable about inflation.”

As stated in the Bank’s news release about the rate cut: ‘The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability’.

“In other words, today’s financial crisis has become more of a threat to the nation’s GDP – but on the plus side, slowing growth does tend to slow inflation too. The Bank may well have liked to postpone the base rate cut until inflation came down closer to the 2% target, but given the choice between letting the economy deteriorate and losing some ground in the fight against inflation, it chose the latter.”

As for the months ahead: “The latest BRC-Nielsen Shop Price Index (SPI) for the UK reveals that annual shop price inflation shrank to 3.6% in September, down from 3.8% in August. It’s encouraging to see inflation on the way down, particularly as it gives the MPC more leeway when it comes to future base rate decisions. Various influential bodies are calling for the Bank to make further cuts to the base rate – and there’s reason to hope it’ll be able to do that.”

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Despite The Issues In The Housing And Mortgage Markets, Many Thousands Of People Are Still Going Ahead And Buying Their First Property

As experts name 2010 as the year house prices may start to recover, financial solutions company Think Money points out that buying a home is still widely regarded as a positive move, with 17,300 loans granted to first-time buyers in July, according to Council of Mortgage Lenders figures.

Despite the difficulties in the mortgage market, and despite worries about the future of house prices, recent research carried out by the Co-operative Bank and Places for People revealed that the majority (54%) of first-time buyers questioned felt that renting was ‘throwing money down the drain’.

“Whatever issues the housing and mortgage markets is facing,” said a Think Money spokesperson, “it seems British consumers are still very much aware of the benefits of homeownership – and the drawbacks of the alternatives.”

However worrying the thought of losing money on a property, it’s important to remember that the alternative isn’t free: “While homeowners face a possible (or in today’s market, probable) loss on their property, anyone renting a property can be certain their rent money is gone for good. Plus, the cyclicality of the housing market means a homeowner’s loss is likely to be only temporary, as long as they’re not forced to sell before house prices recover.”

These factors go a long way toward explaining why so many tenants remain determined to become homeowners despite the troubles in the mortgage market.

“Assuming the Nationwide Building Society’s chief executive Graham Beale is right and we see signs of recovery in the housing market in 2010, it clearly makes sense for would-be first-time buyers to keep a close eye on house prices, the mortgage market, and available properties. It’s true that they may be able to buy for a lower price if they wait longer, but it’s also possible that house prices will pick up sooner and faster than anyone expects, in which case they could end up ‘missing the boat’ and paying more.”

Furthermore, recent data from the Council of Mortgage Lenders reveals that the average first-time buyer is laying down a deposit of over £19,000 – 15% of the property’s value. “This is an interesting figure, for two reasons,” the Think Money spokesperson commented. “First, it indicates that the average first-time buyer is buying a property now worth around £125,000. Second, if (as Graham Beale predicts) the peak-to-trough drop turns out to be around 25%, an average ‘first-time buyer’ property could drop further, to around £105,000.

“These are only approximate ‘ball-park’ figures, but that £20,000 drop from today’s prices is only around £5,000 more than the cost of spending £600 per month on rent for the next two years.

“Although £5,000 is a lot of money, it seems many first-time buyers do see this as a price worth paying to own a property which should then start appreciating in value. For thousands of tenants, the problems in today’s housing market clearly represent an opportunity to get a foot on the housing ladder which they don’t feel they can pass up – as long as they can find a mortgage.”

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Bankruptcy, Banks, Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, IVA, Loans, Money, Mortgage, Personal Finance

Ivas Don’t Address Mortgages And Other Secured Debts But They Do Reduce Payments To Unsecured Creditors

Commenting on the rising number of home repossessions, debt consolidation experts DebtAdvisersDirect.co.uk point out that IVAs (Individual Voluntary Arrangements) and other debt solutions could help people stay in their homes.

Of the 45,000 repossessions expected by Council of Mortgage Lenders (CML) in 2008, there were 18,900 in the first half of the year. In the second half, therefore, the CML expects a further 26,000 or so.

“As with any statistical forecast, this figure isn’t written in stone,” said a DebtAdvisersDirect.co.uk spokesperson. “Times are particularly tough for homeowners, but many people threatened with repossession may be able to resolve their situation by talking to their lender, and by taking steps to sort out their finances and free up enough money for their mortgage payments.

“Different homeowners will, of course, need to adopt different tactics to avoid repossession. Some may just need to reduce their spending, while others may need to consider taking in a lodger, for example, or working longer hours.

“But for many, the problem is unmanageable debt. Many people can’t afford their mortgage payments because their non-priority debts are taking up so much of their budget. We would advise anyone in that situation to seek debt help immediately. A professional debt adviser can help them go through their finances and figure out what steps they would need to take to free up the necessary funds.”

Often, those funds are already there: “Very few people know exactly where all their income goes. They may know where they spend large sums of money, but the smaller sums can easily slip through the cracks – and they all add up. This is why so many people find they have enough ‘on paper’, but not in reality. A debt adviser can help them create a monthly budget sheet and track their spending more effectively.”

Some homeowners, however, are facing more serious debt problems. “At a certain point, the monthly debt repayments simply exceed the individual’s ability to keep up – there just isn’t enough money coming in to service the debts and cope with the ongoing bills. Once this happens, they find it’s almost impossible to pull themselves out of debt without professional help. The important thing is to get in touch with a debt specialist as soon as possible, and find out what they can do to help.

“Depending on the individual’s circumstances, the best debt solution could be an IVA. As a form of insolvency that helps people clear significant debts without resorting to bankruptcy, an IVA can be an effective way of reducing their monthly expenditure, freeing up the money they need to make their mortgage payments and start paying off any arrears that have built up.”

An IVA is a legally binding agreement between an individual and their unsecured creditors, which normally lasts for five years. “The individual commits to making fixed monthly payments throughout the IVA, based on what they can afford after taking their essential living expenses (including mortgage payments) into account. If enough of the creditors agree to the terms, they’ll agree to freeze interest, not to take any legal action, and to write off any outstanding debt at the end of the IVA. Like bankruptcy, an IVA helps borrowers make a fresh start, but unlike bankruptcy, it helps them protect their home – they may have to release some equity, but it’s extremely unlikely they would have to sell.”

Yet it’s important to recognise that IVAs are not an appropriate solution to every homeowner’s problems. “Whatever financial issues an individual may be facing,” the spokesperson concluded, “it’s vital they seek debt advice from a specialist offering a range of debt solutions – someone who can help them take stock of their situation, understand their options and identify the best way forward.”

About Debt Advisers Direct
www.debtadvisersdirect.co.uk helps people with financial difficulties, providing debt help & advice and tailor-made debt solutions.

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ThinkMoney.com advise homeowners not to become complacent about protecting themselves against the current downturn in the housing market.

Responding to the recent report from the National Housing Federation suggesting house prices will recover and rise by 25% by 2013, financial solutions company ThinkMoney.com advised existing homeowners to remain optimistic, but warned them not to become complacent about protecting themselves against the downturn in the housing market.

The National Housing Federation anticipates further falls in house prices for the next two years – 4.4% in 2008, with a further fall of 2.1% in 2009 – after which prices will begin to recover, rising by 25% by 2013.

However, the report itself acknowledges that the figures depend on a ‘robust employment market’, and warns that if employment and consumer spending levels fall by too much, the housing slump could be more severe than they have predicted.

A spokesperson for ThinkMoney.com said: “We would advise homeowners to continue saving well, spending responsibly, and to remain aware of the potential problems facing the housing market. Your financial planning should, as always, be geared towards making sure you are prepared for any problems that could arise.

“The report is only speculative, and as with anything, it is very hard to predict what will happen in the next five years. The predictions are essentially a best-case scenario,” she said.

“In a sense, it’s healthy to be slightly cautious when it comes to money, especially with an important financial commitment like a mortgage.”

The spokesperson said that there are a number of ways homeowners can protect themselves. “Savings are the key,” she says. “Falling house prices means that equity tied up in the value of your home is decreasing, so it’s wise to try and counteract that by saving money where possible.

“This also acts as a buffer if you find the interest on your mortgage payments going up in the next few years, which is quite possible. Without savings to fall back on, mortgage payments could become simply too expensive for poorer families, and that brings the possibility of falling into debt – especially with other costs of living rising so quickly too.

“Likewise, it’s important to keep an eye on spending and make sure unnecessary purchases are kept to a minimum. Avoid taking out consumer finance loans on expensive goods, as they can become a big financial burden when things get tight,” she continued. “In fact, avoiding any form of personal loans or credit is the best defence against getting into debt.”

The ThinkMoney.com spokesperson advised homeowners to remain positive. “Many homeowners will be relatively unaffected by the problems in the housing market, so long as they are willing to stay put,” she said.

“A loss in the value of your home only affects you if you are looking to sell, but it still pays to save well in case of emergency. And once the market does recover, you may even find yourself in a better financial situation than you were before all the trouble started.”

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When it comes to car insurance Brits are bargain hunters

New research from Fairinvestment.co.uk has found that price is everything for its users when it comes to shopping for car insurance. The research involved asking users what the most important aspect is when shopping for car insurance.

57 per cent of the Fairinvestment.co.uk users who were questioned said that Car Insuranceprice was most important to them, and the level of cover was considered less important with only 19 per cent of the vote. The research also found that a courtesy car is paramount to 5 per cent of those who voted.

Of equal value to voters in the poll, with 2 per cent each, was breakdown cover, a discounted rate for partners, a low excess and a protected no claims bonus.

The study also found that some aspects of car insurance are of no interest at all to Fairinvestment.co.uk users. For example, cover for driving other cars received no votes whatsoever and, surprisingly, none of those questioned were bothered about a no claims discount, despite the fact that a maximum no claims bonus could save drivers a considerable amount.

An important aspect for one participant was a lack of overseas call centres, a feature that has caused controversy in the past. Another user appears to have missed the point, stating having a car as the most important aspect of shopping for car insurance.

Commenting on the findings, director of Fairinvestment.co.uk, James Caldwell, said: “Motorists should be careful choosing their car insurance by price alone, the cheapest car insurance is not always the best and there are other aspects to be taken into consideration.

“I would advise anybody shopping for car insurance to compare deals not just on price but also policy features, some of which may be outlined in the small print.” Mr Caldwell advised.

About Fair Investment
fairinvestment.co.uk, is an independent online finance portal, providing financial comparison tools, news, reviews and information on a wide range of financial products and services, including insurance, credit cards, mortgages, loans, savings and investments.

Fair Investment Company is a leading internet player that sees 400,000 unique users per month, sells over £5 billion worth of mortgage enquiries and is a Hitwise 100 Banks and Financial Institutions site.

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Secured consolidation loans are still a viable debt solution

In the midst of the credit crunch, thinkmoney.com reminds existing and potential customers that secured consolidation loans are still a viable debt solution for many homeowners – and that a range of alternative debt solutions are available to borrowers who either can’t secure a loan against their property or prefer not to.

“There’s no question that obtaining secured credit has become harder and, in many cases, more expensive,” a spokesperson for the financial solutions company commented. “As a second charge on a home, a secured loan involves a certain risk from a lender’s perspective, so secured lenders are keeping a very close eye on issues in the housing market. A recent Bank of England survey revealed that default rates on secured lending rose by more than expected in Q2, and lenders expect these rates to rise further in the months ahead.

From the individual borrower’s perspective, equity withdrawal of any kind is clearly a more attractive option when house prices are rising: “Today’s falling prices are reducing the number of homeowners with enough equity to make a secured loan a viable solution – and deterring many who are keen to retain their ‘safety margin’ against negative equity.

“Having said that, it’s important to see recent falls in house prices in their correct context: as relatively small drops following a decade of rapid growth. According to Nationwide’s House Price Index, for example, the ‘average house’ in Q2 2008 was still worth almost £10,000 more than it was in Q2 2006. In just ten years, Nationwide reports, the average house price rose from £60,754 to £184,131 – homeowners may be worried about falling prices, but many are still likely to own significant levels of equity. For them, a secured loan can be an excellent debt solution: a realistic way to consolidate their unsecured debts into one manageable, lower-interest debt which they can arrange to repay at an affordable rate.

“Nonetheless, when major secured loans providers like Firstplus announce they’re ceasing to make new loans, it’s clear that the secured loans market as a whole is suffering under today’s adverse conditions. With lenders tightening their criteria or even turning down new business, it’s more important than ever that borrowers choose a company that works with a wide range of lenders and specialises in finding secured loans for people from all kinds of financial backgrounds. Talking to the right company can make all the difference between being offered credit at a competitive rate and being unable to avail a secured loan at all.”

Concluding, the thinkmoney.com spokesperson stressed that secured consolidation loans are by no mean the only way out of debt. “Depending on the individual’s circumstances, a number of other debt solutions may be more appropriate than a secured loan, such as a debt management plan, an unsecured debt consolidation loan, an IVA (Individual Voluntary Arrangement) or, for residents of Scotland, a Trust Deed. For anyone in debt, the important thing is to seek impartial debt advice from a company that offers a wide range of debt solutions – a company that has an in-depth understanding of each solution’s benefits and drawbacks and can recommend the one that constitutes their optimal route out of debt.”

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Sixty per cent of homeowners not interested in environmental issues

Only one in six home movers believe that the introduction of HIPs (Home Information Packs) will speed up the buying process and just one third believe they are a good idea, according to a new survey by thinkproperty.com, a major new, independent consumer property portal which offers estate agents an online sales and marketing channel to deliver better value, improved lead generation and excellence in customer service.

The survey, which had over 3,100 respondents, revealed that more than one third of home movers are confused about Home Information Packs and one third of home owners were not aware of their introduction in June. A third of respondents believe HIPs will slow down the property market, twenty per cent commented that HIPs will increase property prices (http://www.thinkproperty.com/soldhouseprices.htm), seventeen per cent believe HIPs will lower property prices and thirty per cent believe that the introduction of HIPs will not change how they buy property (http://www.thinkproperty.com/findanagent.htm).

In spite of home movers’ lack of support for HIPs, the vast majority would modify their property to make it ‘green’ if the Government incentivised this with offers of green mortgages and lower council tax. Over two thirds of home movers do not believe the Government is doing enough to build greener homes, and sixty per cent say the same of new home developers.

One hundred per cent of respondents agreed that the Government should help home owners to fund fuel efficient boilers to improve energy efficiency, followed by roof insulation (eighty per cent), double glazing (seventy per cent), solar panels (sixty one per cent) and wall insulation (forty seven per cent). Just seventeen per cent felt that the Government should financially help home owners with energy improving devices.

However, the results highlighted a general lack of interest in green properties, with sixty per cent claiming that they didn’t want more information on green property issues. In fact, less than two thirds of home movers claimed to be interested in the environment, with nearly sixty per cent commenting that ‘there are more important things to be worrying about’. The view from one in five respondents was that it is too expensive to switch to environmentally friendly products, with over one quarter of home movers commenting that ‘the only people that are interested in the environment are sandal-wearing hippies’.

Already, seventy per cent of home movers claim to have double glazing, sixty per cent have roof insulation, fifty seven per cent use low energy light bulbs and forty per cent run a fuel efficient boiler. Over two thirds of home movers claim to recycle and three quarters say they switch off all unused lights.

Low energy lighting should be compulsory for all new home builds according to over seventy per cent of respondents, followed by solar panels (fifty five per cent) and grey water systems (forty two per cent).

Mark Goddard, Managing Director of the property portal (http://www.thinkproperty.com/) comments: “Clearly the introduction of HIPs is not popular with home movers and many think that the Government should be doing more to help home owners improve the energy efficiency of their homes.”

About ThinkProperty
ThinkProperty.com (http://www.thinkproperty.com/) provides an accountable marketing channel to today’s modern property professional and already averages 400,000 property details available from around the UK every day.

ThinkProperty.com is owned by Trader Media Group which has an unrivalled reputation for bringing buyers and sellers together in huge numbers through its dealer software products and market leading consumer websites and magazines.

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Mortgage Application Xpress by Woolwich

Woolwich has announced the launch of a new mortgage sales tool ‘Mortgage Application Xpress’ (MAX) which gives a faster, simpler and more efficient way to do business online. The new tool allows brokers to be able to confirm mortgage decisions at point of sale, certify ID and proof of address online, leading to speedier mortgage offers.

The new MAX tool from Woolwich will save mortgage brokers time as it’s a one stop mortgage application process, it is also intuitive so helps removes duplication and the potential for errors as well as telling the broker exactly which documents are needed to submitted with the application.

David Finlay, Woolwich intermediary business director said: “This strengthens our promise to the intermediary market to build on our service. The latest online sales tool is a result of feedback from intermediaries to provide them with a single platform for all mortgage sales related activities.”

Key features of MAX:

  • Mortgage decision at point of sale – an instant decision to give brokers confidence we can meet their clients mortgage requirements
  • ID and proof of address can be certified online
  • Application Credit Check (ACC)
  • Intelligent fields (so you can look up things like post and sort codes)
  • Notification of all documentation requirements at ACC stage meaning you save time
  • Intelligent, pre-population of data across multiple forms such as declarations, direct debits, cover sheet etc.
  • Intuitive, simple to use application forms
  • Slicker documentation and tools for example documentation that can be e-mailed to the customer, ability to save and file online, new quick calculations
  • Quick quote, Offset Calculator, BTL Illustrator

MAX is available on woolwichintermediaries.co.uk, brokers can find out more by contacting their IBM, calling 0845 070 1567 or visiting the Woolwich website to try the online demo. Brokers who are already registered for Woolwich’s online application systems will automatically have access to MAX.

The new site has recently been piloted by Contractor Financials, Mortgage Find and Concordia.

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Welcome to EPR Financial News

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Welcome to EPR Financial News.

EPR Financial News is a new blog, part of EPR Network, that is going to be focused on and will be covering the financial news and stories from press releases published on EPR Network.

EPR Network (EPR stands for express press release) is one of the nation’s largest press release distribution networks on Web. The EPR’s nationwide network includes 12 State based PR sites, one major PR forum and a number of industry specific PR blogs and what started as a hobby on Internet years ago turned out to be a rapidly growing business today. EPR Network is also known as one of the most trusted (human optimized, published, edited and monitored, spam/scam/low quality PR content free) PR sites on the web with more than 10,000 company and individual press releases distributed per month. EPR Network is putting your press releases on top of all major search engines’ results and is reaching thousands of individuals, companies, PR specialists, media professionals, bloggers and journalists every day.

EPR Network has thousands of clients around the world including global 500 corporations like Hilton Hotels, Barclays Bank, AXA Insurance, Tesco UK, eBay/Skype, Emirates, just to name a few. The network’s PR web sites are currently reaching from 150,000 to sometimes 500,000 unique visitors per month while our viral reach could possibly go to as much as 1M people per month through our presence across various social media sites. EPR Network was established in 2004 and as of May 2008 it had more than 800,000 press releases (pages) published on its network.

If you have a press release to be distributed, you can do it over here: press release distribution

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