News from Reuters reports that UK mortgage approvals are currently at the lowest they've been for 2 years (http://uk.reuters.com/article/uk-britain-lending-idUKKCN11Z0TC), why is this?
Granted, house prices are expensive, and there is a lot of debt around but debt hasn't traditionally been a big 'make or break' reason for people not to apply for mortgages.
People's apparent willingness to accept debt has been noteworthy of late. The British people seem to embrace debt with open arms - at least during boom times. The last boom years of 2003 - 2008 saw lots of 'free money' being given away - this 'feel good' attitude persuaded many of us to take on debt, and this study regarding the amount of uk household debt makes interesting reading.
People in the UK seem to still want to buy houses - in Europe this is very different with many more people willing to rent property. This is not necessarily a good idea on the part of Europe in my opinion, as what as house gives you (once you eventually own it) is an asset that you can use in later life. Renting a property gives you no such advantage.
With money being tight at the moment it's imperative to find a mortgage that works for you as cheaply as possible. Don't go to banks, don't go to building societies, they will only sell you their own products, use an independent mortgage broker who will find you the best deal. Doing this one thing will save you thousands of pounds over the lifetime of your mortgage.
People may want to remortgage their
property for a variety of reasons, Better interest rate, Borrow more
money for home improvements or to consolidate existing credit
commitments. If you are unsure of what a remortgage actually is, click this link for an explanation http://www.learnmoney.co.uk/mortgages/remortgage.html
If say for example your fixed rate has just ended and you want to fix the rate again for a period of time the lender will take into consideration the value of your house and the outstanding mortgage and generally offer you another rate as long as your mortgage account has been conducted satisfactorily and your income is still sufficient to service the mortgage.
You will then be offered a rate dependent on the loan to value.
What loan to value means is what percentage is the mortgage outstanding to the value of the property.
IE £150,000 mortgage and a £200,000 Property value would represent 75% loan to value.
The loan to value is quite important as this will determine the rate and product a lender would offer.
Dependent what lender you are currently with simply switching interest rate can either be time consuming or simple.
Lenders like the Halifax plc allow mortgage brokers to arrange the switch and this can be done very simply without having to have a 2/3 hour appointment in the branch.
However you may want to borrow more money than you currently have outstanding , so what happens then ?
This is the point when the services of a professional mortgage broker will assist you greatly in the process.
A mortgage broker like myself will be able to look at what your existing lender will offer you and what is also available from the rest of the market.
All lenders have varying criteria for additional borrowing depending on what that additional borrowing is for.
If it is more advantageous to switch lenders the mortgage broker will look at what are the best interest rates, what charges and costs are involved.
Lenders now offer incentives for people to switch their mortgage to them and in many cases can offer better rates than your existing lender.
So whatever your circumstances speaking to a trusted mortgage broker who is independent to your existing lender should be the first place to start because they will be able to look at the full mortgage range and match the correct product/lender to your personal circumstances.
Remember a mortgage is a long term commitment and by taking the correct advice when there are changes to the mortgage could save you £1000’s of pounds in unnecessary interest payments.