As highlighted in an earlier post; I mentioned whether or not mortgage borrowers were going to be affected by the “collars” in certain mortgage lenders terms and conditions. Earlier today Nationwide has confirmed it will not enforce their collar, previously set at 2.75%. This is good news as it will mean that borrowers on tracker mortgages will benefit from the full 1% rate drop. This news follows yesterdays decision by the Halifax not to enforce their controversial collar also.

Shane

The Bank of England has today voted to reduce the Bank Base Rate 1.0 percentage points to 2.0%.

The Council of Mortgage Lenders has welcomed today’s rate cut, and believe “it will help the wider economy, even if it cannot be reflected universally in lower mortgage rates.”

The impact this will have on borrowers, new and existing is yet to be seen, although many lenders have pledged to pass on the full extent of the saving. There is still the issue of collars…. more to follow.

Shane

Following last weeks 1.5% base rate cut by the Bank of England, the cost of inter-bank lending also decreased quite dramatically by falling over 1% to 4.49% on Friday of last week.

The LIBOR, the rate at which the banks lend to each other, is related to the cost of mortgages to customers, and we are hoping that this latest fall may result in cheaper borrowing for customers, especially since the recent reduction in the Bank of England base rate had a lesser impact on borrowing costs as some would have hoped.

Those customers on Base Rate Trackers will be very pleased with the rate reductions, and those customers coming out of 2 and 3 year fixed rate mortgages should also be more relieved that the payment shock they were all expecting “should” have been reduced by this action. Fixed rate mortgages currently in place will of course be unaffected, the main obvious reason for a fixed rate mortgage of course!

The Council of Mortgage Lenders have been quoted as saying that that the “Libor was more important in determining the cost of mortgages than the Bank of England’s rate”, so lets see how these rate changes effect the product ranges of mortgage lenders.

Only time will tell!

Shane Beardsley
Managing Director / Independent Financial Adviser

Mortgages? If we were to believe the media then we would probably think that it was impossible to get a mortgage!

But this is simply NOT the case; it is true that for many individuals it is harder to obtain a mortgage than it has been in recent years, but at the end of the day, assuming you have a clean credit history, a reasonable deposit or in the case of a remortgage, equity, and a steady job then getting a mortgage should not be too much of a problem.

Mortgage availability has certainly reduced, in fact we had access to around 25000 products this time last year, and at the last count our mortgage sourcing software had a little over 5000 available.

So the moral of this story is, don’t ASSUME you wont get a mortgage, whether to buy a new home, or to refinance your current property, just give us a call or drop us an email and arrange a meeting to discuss your mortgage needs.

Shane Beardsley
Managing Director / Independent Financial Adviser