Tag Archives: Mortgage

Mortgage

Financial, Financial Services, Home Equity, Loans, Money, Mortgage, Personal Finance

Fixed rate mortgages are low, particularly for those with at least 25% equity, but will they/can they get any cheaper?

Tracker mortgage rates mirror any change in bank rate, but with mortgage lenders increasing tracking margins, and with bank rate at 0.5%, have you missed the boat?

Unusually, standard variable rates may also look attractive, but are lenders passing on any change in interest rates, as they struggle to retain savers?

If you are unsure what to choose, here are some L&C tips on how you could hedge your bets.

A mix and match mortgage is where you take part on a variable rate and part on a fixed rate. This gives you some security but will also mean you don’t completely miss out if rates fall again. The downside is that you’re likely to pay an arrangement fee for both schemes.

Drop lock mortgages, offered by lenders such as Halifax, Nationwide and C&G, allow you to take a tracker deal, but switch to a fixed rate in the future without penalty.

This might seem the perfect solution but timing your switch will be tricky, and is likely to involve your home being revalued. With house prices continuing to fall, a revaluation could see you move into a higher loan to value band with higher rates, so even if fixed rates generally fall, you could end up paying more. Any switch is also likely to mean a new arrangement fee.

You could also consider a capped tracker mortgage. The tracker means you don’t miss out on interest rate cuts, and adding a cap means there is a maximum rate you can pay, so if rates rise above the cap, you don’t need to worry.

The Coventry and Yorkshire Building Societies and Woolwich have all recently launched capped trackers.

To find out more visit the best buy mortgages section of the L&C website.

Whatever you do, L&C’s advice is don’t delay. With lenders reserving their best deals for those with up to 40% equity, and falling house prices eroding your equity, any delay could cost you dear.

For more information and no-fee advice, borrowers should call free on 0800 373300.

 

London & Country (L&C) is the UK’s leading no-fee mortgage broker. Based in Bath, it provides whole of market advice via telephone and post to clients nationwide. As well as residential mortgages, it also specialises in the Buy-to-Let and adverse-credit sectors.

L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers. For more information, go to www.lcplc.co.uk/green

L&C has won numerous awards including:

Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and 2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007
Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
Business of the Year – The Bath Business Awards 2005
Growth Strategy of the Year – National Business Awards (Wales and West) 2008
Business Leader (Broker) – British Mortgage Awards – 2008
Online Mortgage IFA of the Year – Financial Adviser – 2008

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Bankruptcy, Debts, Financial Services, IVA, Loans, Mortgage

Tackling Unsecured Debt Can Prevent Repossession

Responding to the 2008 repossession and arrears statistics released by the Council of Mortgage Lenders (CML), debt specialists Debt Advisers Direct have stressed the relationship between unsecured debt and mortgage arrears.

“As the CML reports, there were 40,000 repossessions in 2008,” said a spokesperson for Debt Advisers Direct, “and a further 219,000 mortgages ended the year more than three months in arrears.

“For many of those people, however, the problem lay not in the cost of their actual mortgage payments, but in the cost of servicing their unsecured debts. Charging significantly higher interest rates than mortgages, unsecured debts can easily ‘snowball’ to the point where borrowers simply can’t keep up with them – where their monthly payments barely suffice to pay off the accumulating interest.

“Unsecured debts can also be alarmingly easy to take on. Credit cards and store cards in particular allow significant levels of debt to accumulate gradually: people who would hesitate to take out a £2,000 loan can find they’ve acquired £2,000 of debt on a number of cards without even noticing it.”

This combination of high interest rates and ease of access has left many homeowners with unsecured monthly debt repayments that take up some or all of the funds they need to service their mortgage debt. Unless they take steps to address this, it can end up leading to repossession.

“There are ways of reducing the burden of their unsecured debts,” the spokesperson continued. “Many people successfully negotiate with their unsecured lenders – either on their own or through a professional debt management organisation – asking them to accept lower payments, freeze interest and/or waive charges, to ensure that servicing their unsecured debts doesn’t take up funds they need to stay on top of their mortgage payments.

Others find that their unsecured debts have passed the point where negotiation is a realistic option: “In 2008, some 106,000 people in England and Wales turned to insolvency (bankruptcy or an IVA (Individual Voluntary Arrangement)) as the only realistic path out of debt – and experts such as KPMG believe this figure could easily grow by 50% this year.

“For the majority of homeowners, an IVA offers distinct benefits over bankruptcy. Like bankruptcy, an IVA lets them write off the debt they can’t afford to repay, and will have a severe impact on their credit rating. Unlike bankruptcy, however, it will allow them to retain ownership of their property.”

This is what makes it a particularly interesting option for homeowners who worry that their unsecured debts could end up costing them their home: “An IVA requires substantial commitment, as they will need to make regular payments towards their unsecured debt for five years, but those payments are designed to be affordable.

They will be calculated to take up the individual’s entire disposable income – the money they will have left after taking into account their essential monthly expenditure, such as food, petrol, utility bills and (most importantly) mortgage payments.

“So a homeowner in an IVA will be required to contribute all their disposable income to their IVA for a full five years, as well as releasing some equity halfway through the final year of the IVA to maximise the amount they can pay their unsecured creditors.

“However, they’ll know they’re protected from any legal action by their unsecured creditors – including attempts to make them bankrupt – and they’ll know their outstanding unsecured debts will be written off at the end of that period. Most important of all, they’ll know the budget they’re following is specifically designed to ensure their monthly mortgage payments will be met.”

“The important thing is to take action in time, as soon as their unsecured debts reach unmanageable levels. An IVA is a legal procedure that requires the approval of creditors who collectively ‘own’ 75% of the debt in question – in general, the sooner an individual speaks to an Insolvency Practitioner about an IVA, the better their chances of gaining that approval.”

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Financial, Financial Services, Home Equity, Loans, Money, Mortgage, Personal Finance

L&C Customers Save £5.9M In Broker Fees

The mortgage market has changed out of all recognition in the last 18 months and borrowers are ever more keen to seek quality advice without incurring a heavy cost for that advice. Mortgage arrangement fees have soared in recent years and with some broker fees amounting to as much as 1% of the mortgage amount on top, borrowers cannot ignore their impact.

“Fee-free, whole of market advice coupled with quality service from application to completion has been central to borrowers choosing L&C. With mortgage availability restricted the last thing our borrowers want to face is another fee. That’s why we are maintaining our commitment to fee-free mortgage advice”, commented David Hollingworth at L&C.

Borrowers seeking fee-free advice should call 0800 373300. Saving in broker fee calculated based on a fee of £250 per mortgage.

London & Country Mortgages Ltd is the country’s leading whole of market no-fee mortgage broker and submitted in excess of £4bn of mortgages to over 70 lenders in 2008.

L&C has won numerous awards including:

Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and 2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007,2008
Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
Business of the Year – The Bath Business Awards 2005

Growth Strategy of the Year – National Business Awards (Wales and West) 2008
Business Leader (Broker) – British Mortgage Awards – 2008
Online Mortgage IFA of the Year – Financial Adviser – 2008

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Debts, Financial, Financial Services, Foreclosure, Home Equity, Money, Mortgage

It’s Not Too Late To Save Your Home – Hotline Offers Free Consultation

The Lincoln National Group is pleased to announce the opening of their free foreclosure prevention hotline. The hotline and the assistance it offers is arriving just in time to help US homeowners as the US foreclosure rate has reached alarming proportions. In 2008, 2.3 million American homeowners faced foreclosure proceedings which was an 81 percent increase over 2007. One in 54 housing units received at least one foreclosure notice during the year. Foreclosure filings were reported on 303,410 US properties in December 2008, up nearly 41 percent from December 2007. And the situation doesn’t look like it is getting better any time soon with US homeowners facing layoffs, shrinking investment portfolios and falling home prices.

Last month, 11.6 million people were unemployed and the unemployment rate rose to 7.6%. Over the past 12 months, the number of unemployed has increased by 4.1 million. It doesn’t appear that the foreclosure prevention programs currently implemented nationwide have had any real success in slowing down this foreclosure tidal wave. Recent government legislation appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners.

Lincoln National Group is stepping in at this crucial time to help US homeowners avoid foreclosure and save their homes. The experts at Lincoln National Group, an affiliate of the law firm of Debra Tsadok, have the knowledge and the ability to prevent foreclosure. They have the solutions. With their extensive experience they help homeowners every step of the way and do everything possible to prevent foreclosure. After performing an assessment of the homeowner’s situation and an analysis of the homeowner’s financial situation they negotiate with their lender to achieve the best outcome.

The free foreclosure prevention hotline manned by the experts at the Lincoln National Group can help with a wide range of problems. What preventative steps should be taken if a homeowner loses his job and fears he won’t be able to pay his mortgage on time? What should a single parent do if she falls behind in her mortgage payments? What options are available to those who have already received foreclosure notices? The Lincoln National Group hotline is open from 9:00 am – 7:00 pm at 201-541-6680. It is open from Monday through Friday.

About Lincoln National Group
Lincoln National Group is dedicated to helping US homeowners avoid foreclosure and save their homes. They offer a variety of foreclosure prevention options. For more information please call them at 201-541-6680 or visit their website: Lincoln National Group.

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Debts, Financial, Financial Law, Financial Services, Foreclosure, Loans, Money, Mortgage

To Meet The Massive Demand For Loan Modification Services, The Parsa Law Group Ramps Up

As the foreclosure crisis in reaches epic proportions, the nation’s leading provider of legal loan modifications and loan workout services, the Parsa Law Group and its marketing arm, the National Loan Modification Center, have tripled the size of their operation in the month of January with an additional 4 attorneys, 40 support staff and over 10,000 square feet of office space.

The Parsa Law Group provides professional legal representation for those wishing to renegotiate an existing mortgage with their lender. The ultimate goal of the service is to avoid foreclosure and keep people in their home. The on-site team of attorneys and staff has helped thousands of homeowners who are facing financial hardship, have a mortgage that is upside down, or are stuck with an ARM/Interest-only mortgage they can no longer afford by stopping foreclosure, reducing their monthly mortgage payments, adjusting the principal on their mortgage, working out a modified loan with a lower fixed interest rate, and getting any missed mortgage payments tacked on to the end of their loan.

“For me this is a mission to help as many homeowners as possible stay in their homes. It’s such a shame when we see so many people that were taken advantage of with loans that were not explained to them fully or when you have someone that is about to lose their house and entire life’s savings because someone lied to them outright, or because they lost their job, or are simply going through rough financial times like so many other Americans. With the banks out to save themselves with billions in bonuses, and refusing to free up credit markets with the bailout money, a line has clearly been drawn, and we have chosen to be on the side of struggling homeowners.” said James Parsa, Lead Attorney at the Parsa Law Group / National Loan Modification Center.

“It’s been a quite challenge to keep up with the explosive growth of this area of our business,” says Mike Ponzillo, Director of Operations at the Parsa Law Group / National Loan Modification Center “we are literally hiring people every week because the calls keep coming in and every single case we negotiate with a lender requires a huge commitment of staff hours and resources on our end.”

Kelly Sneed, Marketing Manager at the National Loan Modification Center, said “Since we started this service it has been an ongoing effort from a marketing standpoint to get the word out about Loan Modifications as an alternative to foreclosure. A few months ago people didn’t know what a Loan Modification or a Loan Workout was, or how it could help them save their home.”

The Parsa Law Group together with its marketing arm, the National Loan Modification Center, is the Nation’s Leading Legal Loan Modification Provider, with thousands of homes saved. With an on-site team of attorneys and professionals that fight to save homes from foreclosure, reduce mortgage payments, and hold lenders accountable for unfair or fraudulent loans, the Parsa Law Group is the staunch legal ally that struggling homeowners need in these difficult times.

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Financial, Financial Management, Financial Services, Financial Solutions, Home Equity, Loans, Money, Mortgage, Personal Finance

Many Homeowners Stand To Benefit From January’s Base Rate Cut

Following the Bank of England’s latest base rate cut to 1.5%, financial solutions company Think Money have said that many homeowners will benefit from the cut, adding that those who may not receive the benefit of the base rate cut due to mortgage collars could still save money if they remortgage.

The half-point base rate cut brings the base rate down to its lowest level since the Bank of England was established in 1694. It is the fourth cut in as many months, and the seventh consecutive base rate cut since December 2007, shortly after the credit crunch began.

The cut is a further attempt by the Bank of England to revive the market for loans and mortgages, both of which are important to the health of the economy. Despite recent sharp base rate cuts, many lenders have remained cautious with regard to their lending, while many banks have simply been unable to obtain the funds necessary for normal levels of lending.

A mortgage expert at Think Money said that on the whole, the cut is good news for the mortgage market. “In theory, a cut means that lenders can afford to offer mortgages at lower rates, which is good for homeowners. People on tracker mortgages will automatically benefit, unless they have reached their mortgage collar, and lenders may consider reducing their fixed-rate mortgages too.

“However, there is some pressure on mortgage lenders due to the LIBOR rate, which is still higher than the base rate – meaning that some of the funds lenders rely on for mortgages are more expensive than it may first appear. That may explain why a number of lenders raised the interest rate margins on their tracker rates in anticipation of this base rate cut.”

The Think Money spokesperson added that now could be a very good time for existing homeowners to remortgage, as well as a good opportunity for first-time buyers to make their first purchases. “A remortgage could save existing homeowners a lot of money, especially those who started fixed-rate deals in the last two-to-three years. Switching to a tracker deal could greatly reduce homeowners’ monthly payments, until rates begin to rise again, and many fixed-rate mortgages are cheaper than they have been in recent years.

“At the same time, we are in a situation where houses are falling in price, and interest rates are relatively low, both of which mean mortgage payments are likely to be lower than they were, say, two years ago. For that reason, it can be a good time for first-time buyers to make a move.

“Many first-time buyers are put off by the idea that mortgages are difficult to obtain. It’s true that they are more difficult to obtain than at the height of the mortgage market in 2007, but they are still very much available – it can sometimes just take a little longer to find the best mortgage deals.

“Anyone looking for a mortgage should make sure they receive expert mortgage advice beforehand. Speaking to the right people can help homebuyers to find the best rates and the best type of mortgage for their circumstances.”

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

New Research Shows That 15% Of Homeowners Taking Out A Remortgage In Late September And Early October Either Had Deals Turned Down Or Moved Onto Their Lender’s SVR

Financial solutions company Think Money have advised homeowners who are looking to remortgage that speaking to a professional mortgage adviser has become more important in recent months, as the availability of mortgage deals has remained lower than 2007 levels.

The new NMG Research Survey, carried out for the Bank of England, showed that at the end of September and beginning of October, 15% of people who had taken out a remortgage had previously either had applications turned down or had moved onto their lenders’ standard variable rate.

Standard variable rate mortgage deals – a lender’s basic mortgage rate – tend to be noticeably more expensive than the lender’s discounted variable-rate mortgages at any given time, according to a mortgage expert for Think Money.

“Most mortgage deals advertised in the shop window or online are introductory deals,” she said. “Fixed-rate mortgages are usually priced based on the lender’s own long-term projections, but most new variable-rate deals are actually discounted from the standard variable-rate. So the only time homeowners will usually pay the standard variable-rate is when the pre-agreed terms finish – unless they remortgage.”

The Think Money spokesperson added that the recent base rate cuts by the Bank of England have meant that remortgaging can save homeowners a significant amount of money.

“The base rate has fallen from 5.75% to 2% in just under a year and a half, and while mortgage rate cuts have not been quite so pronounced, they still represent good savings for people who entered mortgage deals two or three years ago.

“For example, while at the peak of the market in July 2007 the best mortgage rates stood at around 6% to 6.5%, we are now typically seeing rates of 4.5% to 5%, and even 4% for homeowners with a particularly high LTV (loan-to-value) ratio.

“To put that in perspective, on a typical £120,000 mortgage, a homeowner moving from a 6% interest rate to 4.5% can save around £104 per month, or £1248 per year.

“What’s more, many economists are predicting further base rate cuts – so homeowners with tracker mortgages could benefit even more in the future.”

The spokesperson was keen to emphasise the importance of mortgage advice in the current market. “With lenders still cautious about offering mortgages, it can take a little longer to find the right mortgage deal compared with, say, 2007. That may explain why so many people questioned for the Bank of England’s report had been turned down by some lenders.

“A professional mortgage adviser can take a look at the homeowner’s circumstances, and based on that can search a range of lenders for the best mortgage deal available to the homeowner.”

The Think Money spokesperson urged homeowners to consider their remortgage deal early to allow plenty of time to find the best rates. “It’s often possible to‘reserve’ mortgages with lenders, so if the homeowner likes the look of a deal a little while before their current mortgage terms finish, they can ensure they get the lower rate later in the year. Of course, it’s possible rates could fall more, so homeowners may want to wait and see what happens in the mortgage market before making a move.”

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Banks, Debts, Financial, Financial Management, Financial Services, Financial Solutions, IVA, Loans, Money, Mortgage, Personal Finance

Debt Advisers Direct remind consumers with debt problems of the importance of seeking debt advice early on, before their finances are further affected by the recession

Commenting on the nation’s economic troubles, Debt Advisers Direct stressed the importance of seeking debt advice in time, before debt problems can escalate out of control.

“Whatever the economic climate, it always makes sense to address debts at the first sign of trouble,” said a spokesperson for the company. “During times of economic uncertainty, it’s more important than ever.

“The problems in the housing market alone pose a significant threat to the livelihoods of people in all walks of life. What was initially seen as an issue for estate agents has grown to affect builders, movers, decorators, furniture stores and so on – after months of negative news from companies directly linked to the housing market, we’re now hearing of problems in a much wider range of industries.

“With so many either out of work or facing the possibility of unemployment, people are spending less and problems in the housing industry are spilling over into the high street, placing even more jobs at risk – at a time when new employment may be hard to find.

“Coping with a period of reduced income is never easy, but people with high levels of debt are far more likely to experience financial problems almost as soon as their income drops.

“This underlines the need to tackle debt problems sooner, rather than later. Many people with smaller debt problems may find a chat with a debt adviser could help them get on top of their finances without making any major lifestyle changes. Once the adviser understands their financial circumstances, they should be able to provide some budgeting advice and suggest practical ways of reducing their level of debt.

“When it comes to more serious financial problems, however, many people are put off by the sheer size of their debts. Someone who owes tens of thousands of pounds may not feel there’s anything they can do to make an appreciable ‘dent’ in their debts.”

In most cases this is unlikely to be true: “However much they owe, they may still have a range of options, depending on their circumstances. A debt consolidation mortgage, for example, could be right for someone who wants to reduce their monthly outgoings and simplify their finances, while an IVA (Individual Voluntary Arrangement) could help someone who literally can’t keep up with their debt repayments – and who can’t realistically expect to repay their debts in a reasonable timeframe.

“We were very pleased to see the emphasis which the Chancellor’s Pre-Budget Report placed on debt advice – the Government is dedicating more than £15 million of additional funding to ensure people can access debt advice when they need it. Similarly, we were pleased to see certain credit card providers and mortgage lenders extending a ‘grace period’ to people who fall behind on their repayments.

“Even so, we remind borrowers how important it is to talk to a debt adviser before things reach the stage where they’re missing payments of any kind: taking steps to tackle their debt today is virtually certain to improve their chances of getting through the recession with their finances in a good state.”

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

Top Mortgage Company Agent Adam Thomas From Invis Inc. Has Become A Business Referral Partner With Debt Settlement Service Companies To Assist Canadians In Debt Elimination

 

Top mortgage company agent Adam Thomas from Invis Inc. becomes business referral partner with debt settlement services companies launching a new website www.HomeOwnerDebtRemoval.com that reportedly aims to assist Canadians with debt relief programs and debt relief assistance.

In a society where residents are weighed down with debt repayment and debt consolidation problems, the new website promises debt relief/debt assistance by paying off such debts, lowering monthly payments and increasing cash flows. This would help them to stay debt free and increase their savings for retirement, renovations, and children’s education or make purchases they desire, while improving their overall financial situation. Our average client saves $500 to $1000 per month and more in some situations, as well; we follow up with ongoing support, guidance and planning as well.

The website further proposes to assist people in debt relief through various mortgage financing programs for their primary residence, investment properties or commercial property tailored to meet their situation and needs. It offers solutions relating to individual credit, income, assets and property equity positions. Programs are also available thru this partnership to assist those homeowners who don’t have the ability to obtain financing and who truly need debt relief. The site has been developed to be a complete one-stop shop to help everyone to receive debt relief help no matter what their current financial situation may be.

Proposed methodologies of www.HomeOwnerDebtRemoval.com is assessing each individual applicant according to their income, credit, assets and property equity position and thereafter formulate plans to sort out the problem through a first or second mortgage, private funding or thru a debt settlement agreement plan.

“No planning is finalized without due approval of the client and each step is followed up leading the client from initial through final stages of the process” declares Thomas. “Thru this partnership customers are able to receive financing and debt relief assistance. Though the customer’s we most often help are homeowners with high debt balance, we will of course try to help all who apply even non-homeowners. During the process, we will review and analyze all options available to the client and explain to them what programs we have to help them, we then make recommendations for the client to succeed in what they want, this way the client can make a informed decision on what’s best for them,” he adds.

The partners claim that they can help in debt elimination of their clients under their debt relief assistance programs since it has built sound relationships with mortgage agents, debt settlement companies and trustees. Either a straight refinance for debt removal or other debt settlement agreement plans, ensuring debt relief would put clients into a better financial condition, they assert.

The partners also assure their clients that they can provide adequate support where people with multiple loans and consequential higher premiums do not know the way out. With only one consolidated payment substituting your multiple premiums, your savings would be considerable, they claim.

About Adam Thomas:
Top Mortgage Agent Adam Thomas of Invis Inc. the leading mortgage brokerage company in Canada dealing in financing to help with debt consolidation and mortgages of all types, with the aim of expanding operations, has now become a business referral partner with other debt settlement and trustee firms, who have come up with the new website www.HomeOwnersDebtRemoval.com providing a number of services related to debt consolidation and debt settlement for its clients.

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Banks, Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, Home Equity, Loans, Money, Mortgage, Personal Finance

The Bank Of England’s Decision To Cut The Base Rate Could Be Particularly Welcome Among People Looking To Remortgage

Welcoming the Bank of England’s decision to cut the base rate to 2%, financial services provider Think Money (www.thinkmoney.com) highlighted the positive effect this could have on people looking for a remortgage.

“Many people paying – or looking for – a mortgage will welcome the base rate falling to levels we’ve not seen in over 50 years,” said Melanie Taylor, Head of Corporate Relations at Think Money. “However, we anticipate the greatest sense of relief will be among people coming to the end of their mortgage term.

“Primarily, this is because these are the people who are tied to a specific time period. Most people moving house or buying their first home will have a degree of flexibility in the timing of their move, but when a mortgage term expires, it expires. This is an absolute deadline – and before they reach that point, the homeowner should have decided whether they’ll revert to their mortgage provider’s SVR or look for a new mortgage deal altogether.

“To anyone in that situation, the base rate cut will come as a great relief, as it could make either option more appealing. In some cases, it could make all the difference between being able to stay in the house and having to sell it.”

However, as the Council of Mortgage Lenders (CML) has pointed out, lenders don’t necessarily benefit from cuts to the base rate in the way that many people believe. As the CML website states: ‘the cost of funds to lenders depends not on Bank rate, but on a range of other factors, including what they have to pay savers to attract deposits, how much it costs them to borrow in money markets, and the costs of holding capital and sufficient liquidity … Far more important than the Bank rate in determining lenders’ funding costs is the three-month London inter-bank offered rate (libor)’.

Nonetheless, the rate which the Bank of England charges lenders is still an important factor, affecting the entire monetary system: “Many mortgage providers passed the full 1.5% of November’s cut on to borrowers on their SVR deals. Various lenders have already announced they will pass on all or most of this latest reduction too, making the thought of reverting to their SVR much more attractive.

“At the same time, this reduction in the base rate will make it easier for lenders to lower the interest rates they charge for new mortgages of all kinds, helping people remortgage at a more attractive rate.”

But homeowners at the end of their mortgage term won’t be the only ones to benefit from the base rate cut. “According to the Bank of England’s November 2008 Inflation Report, around 7% of mortgagors are spending 35-50% of their pre-tax income on their mortgage payments – and 5% are spending 50%-100%. Given the historically high salary multiples we’re seeing in today’s mortgage markets, the ability to remortgage at a lower rate could make all the difference to the finances of many homeowners.”

“Of course, there’s always the question of Loan-to-Value (LTV), a particularly important ratio in today’s economic environment: with house prices dropping and credit relatively scarce, lenders are reserving the best deals for people with LTV ratios of 60% or less. Even so, a base rate of 2% is indisputably good news for most homeowners with mortgages across the country, whatever their situation.”

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

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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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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Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money

Financial Solutions Company Think Money Welcomes The FSA’s Move To Guarantee Deposits Of Up To £50,000 Through The FSCS

Welcoming the changes to the FSCS (Financial Services Compensation Scheme), financial solutions company Think Money commented that any move which strengthened consumer confidence in the financial industry was a step in the right direction.

As of 7th October 2008, the compensation limit for bank deposits is £50,000 (and £100,000 for customers with joint accounts), a substantial increase from the £35,000 limit set on 1st October 2007.

“As a financial solutions company, we welcome this move by the FSA (Financial Services Authority) to reinforce the financial stability of the UK,” a spokesperson for Think Money commented. “In today’s economic climate, it’s vital that consumers know their money is safe. As the case of Northern Rock demonstrated, any doubts about its security can rapidly lead to a self-perpetuating sense of crisis which benefits no-one.

“Furthermore, we also see consumer confidence as an end in itself. As individuals, the more we trust in the stability of our financial institutions, the more faith we have in the future health of our nation’s economy. Simply knowing that our money is secure gives us the confidence to act responsibly, saving for the future rather than living for today. Given the recent moves by the Irish and Greek governments, this move also serves to keep money in the country by simply removing the need to move it abroad.”

As a financial solutions provider, Think Money provides a range of debt, loan and mortgage solutions, as well as a unique managed bank account service.

“But we are also called on to advise individuals on a wide range of financial matters, from managing their debts to budgeting. This is a free service we provide, and the FSCS guarantee helps us carry it out effectively: effective money management is an essential part of avoiding debt in the future, and the FSA’s safeguard means the vast majority of the UK population can have confidence that any problems their bank or building society may encounter needn’t be a threat to their personal savings.”

In the near future, the FSA will also, as its website reports: ‘consult on further reforms, including considering whether the compensation limit should be higher still; the speed with which the FSCS can pay compensation; and the rules surrounding whether deposits are covered on a legal entity, a ‘brand’ or an ‘account’ basis’.

“These are important issues, even the ones which affect only a relatively small proportion of the population – there may not be many people with savings of over £50,000, for example, but it’s important they feel they can safely keep their money in the UK, rather than moving it abroad.

“After all, it’s in everyone’s interests to have a financial system we can all have faith in. Banks themselves are safer when people realise there’s no reason to panic – and fostering a greater sense of security among financial institutions is a fundamental part of bringing an end to the credit crunch, so lenders can get back to lending at levels which promote economic growth across the country.”

Think Money (www.thinkmoney.com) are a financial solutions company based in Salford Quays, Manchester. They specialise in a wide range of debt advice and solutions, including debt management plans, debt consolidation, IVAs (Individual Voluntary Arrangements) and Trust Deeds.

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

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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Business, Costs, Debts, Financial, Financial Management, Financial Services, Money, Personal Finance

Falling sales of new cars are another indicator that today’s economic troubles are affecting people in every part of British society

Dropping sales of new cars should serve as a reminder that economic downturns can affect everyone, whatever their socioeconomic status, said debt management company GregoryPennington.com.

Figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that the number of new cars registered in August 2008 was down 18.6 per cent compared with August 2007. August is usually a quiet month for new car sales, but this year saw the worst August for new car sales since 1966 – just 63,225 registrations.

Premium brands, according to The Times, ‘were among the hardest hit, with Aston Martin suffering a 67 per cent drop to just 19 cars sold’. Land Rover sales dropped 58 per cent, and Jaguar sales 41 per cent.

“This kind of news challenges an often-held assumption that the impact of economic turbulence is more likely to felt among lower-income individuals,” said a spokesperson for the debt management company. “Even less-expensive new cars, while not ‘luxury’ products, tend to be purchased by people who enjoy a reasonably comfortable standard of living.”

Following, as they do, the news about declining sales in other market segments, the SMMT figures are a stark reminder of the decreasing spending power of the population as a whole. According to a report from comparison site uSwitch, the average UK household is £2,500 worse off than last year.

“While it’s good to see people taking sensible steps to reduce their non-essential spending,” the spokesperson for the debt management company continued, “that reduced spending will clearly have an effect on the health of British industry – in this case, the car industry.”

Furthermore, the savings people make are often ‘swallowed up’ by rises in essential bills, such as food and utilities. By definition, these bills can only be reduced up to a certain point.

Under certain circumstances, however, there may be ways to reduce monthly payments to secured and/or unsecured debts.

“Homeowners may find there are ways their mortgage provider could help them service their mortgage debt during a difficult period. Even temporary concessions can make all the difference to a household struggling to keep up with mounting bills, shrinking income, or both.”

Nonetheless, any change to the way they repay their mortgage can have a substantial impact on the borrower’s long-term finances. It may make more sense to look into the various forms of debt help which can could free up the necessary money by reducing their payments to unsecured debts.

Many people enlist a debt management company to negotiate with their unsecured creditors on their behalf: “Unsecured creditors may be willing to take a flexible approach to repayment agreements if this is the best way for the individual to repay the debt as soon as realistically possible.”

A debt management company will talk to each of their client’s creditors, explaining how their financial situation has changed, and negotiating concessions: “They may agree to accept lower payments, for example, freeze interest and / or waive charges, helping the borrower bring their expenditure back in line with their income.”

“Debt management is by no means the only option. Nor is it always the most appropriate – many people with financial problems could benefit more from a debt consolidation loan or IVA (Individual Voluntary Arrangement), either of which could help them reduce their monthly expenses, freeing up the money they need for essential bills. The important thing is to seek professional debt advice sooner, rather than later.”

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Eqlibrium Investments Now Offers Trust Deeds For Clients

A trust deed, or also known as a deed of trust, is a document used to secure debt on a home acting as a mortgage. A trust deed is recorded as a lien on real property. However, although a deed of trust acts like a mortgage, there are differences between a mortgage and a deed of trust.

A trust deed is used as security for a loan on real property, and the specifics regarding the loan are written in a promissory note. A deed of trust is then documented at the county recorder’s office to legally notify the world that the property in question has now been pledged to secure a loan.

There are three parties involved in a trust deed. The Beneficiary which is the investor/lender/note holder, the Trustor which is the borrower and the Trustee which is a third party selected by the investor who has the legal power to act on the investors behalf and holds the title until the note has been paid. The deed of trust recorded against the borrower’s property title is what secures the lenders investment.

When making an investment in a deed of trust, the Trustor makes the property transfer, in trust, to the Trustee (independent third party). The Trustee then holds the conditional title on the behalf of the beneficiary (investor/lender/note holder), and then either of the following takes place: The trust deed will be returned to the borrower once they satisfy all of the terms and conditions that were outlined in the promissory note. The property will be put up for sale should the borrower default – also known as foreclosure. “In many cases, if the borrower defaults there is actually more profit in the investment,” said Louis Pugliese, President of EQlibrium Investments. “A good management company will pass along most, if not all, of this additional return to the investor.”

A few of the benefits of trust deed investing are high returns, a consistent cash flow, and capital preservation while owning an investment that is secured by real property. “Trust deeds offer a great way to earn a higher rate of return and still be secured by an asset to minimize risk,” Pugliese said.

Investors who invest in trust deeds typically make a 12 to 18% return, paid out monthly, with a minimum investment of just $50,000 and relatively low risk. As a result, they are able to enhance their lifestyle significantly without threat to their principal, or build a large nest egg, safely, in a relatively short period of time. Pugliese adds: “Most investors do not realize that they can also use their 401K and IRA’s to invest, earning them much higher returns.” Investing in a trust deed is simple. All you need is knowledge of your personal financial situation and investment account records.

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The Recent Boom In The Rental Market Reflects The Continuing Difficulty For Homeowners Trying To Sell, And May Even Prolong The Problems In The Housing Market, Says Think Money.

Financial solutions company Think Money (thinkmoney.com) have warned that a recent boom in properties put up for rent may indicate further trouble in the housing market towards the end of 2008 and going into 2009.

Recent findings by RICS (the Royal Institution of Chartered Surveyors) have shown a significant surge in the number of homeowners being forced to put their homes up for rent rather than selling, because many homeowners believe that “becoming a landlord is a better option than selling in the current climate”.

Faced with increasing mortgage costs and a very slow housing market, many homeowners are finding it more financially viable to put their own homes up for rent, while at the same time renting cheaper accommodation for themselves – effectively making a ‘profit’ each month, which helps towards their own costs.

The survey also indicated that many would-be homeowners are currently forced to stay in the rental market, as the UK economy experiences 70% fewer mortgage approvals than this time last year.

Melanie Taylor, Head of Corporate Relations for Think Money, commented that the RICS’ findings reflect a continuing downturn in the housing market, despite recent suggestions that mortgages are becoming more freely available.

“The news that several lenders have been dropping their interest rates raised some optimism for the housing market,” she says, “but these statistics from the RICS give a less positive picture.

“It’s true that interest rates are coming down for prime mortgages, but for the majority of consumers, getting onto the housing ladder is still proving difficult.

“For those already on the housing ladder, it’s getting off it that’s proving difficult. The lack of activity in the market continues to be a real problem for those looking to sell – which is forcing many to put their homes up for rent while they wait for the housing market to recover.”

Mrs Taylor also added that the boom in the rental market could have a knock-on effect on the mortgage market. “Even though the number of homes for sale is getting smaller, the decreased demand for mortgages means that the fall in house prices is being sustained,” she says.

“Only when mortgage lenders begin to relax their lending criteria are we likely to see this situation change.”

Mrs Taylor continued that in the current market, renting out your home can be a viable option for freeing up extra funds, but warned that the responsibility of becoming a landlord is not to be taken lightly. “As long as you are willing to make a temporary compromise on your living conditions, you can significantly cut down your outgoings each month, which could help you financially and enable you to save up for when the housing market recovers.

“But it’s important to remember the responsibilities of being a landlord. In particular, if anything goes wrong, you are responsible for the costs,” she says. “So make sure you aware of the risks if you’re considering taking this step.”

Think Money (http://www.thinkmoney.com) are a financial solutions company based in Salford Quays, Manchester. The company specialises in a range of financial services, including mortgages, loans, debt help and advice (including debt management plans, IVAs, and debt consolidation).

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