If you are looking to find and obtain a 90% Mortgage in the current UK Mortgage Market, you ought to first understand what 90% Mortgages are in order that you can consider the general benefits versus the general negative aspects.
First of all a definition. The term "90% Mortgages" describes any mortgage deal which is available up to a maximum loan to value of 90%. Put simply, the mortgage loan amount offered by the mortgage company is up to 90% of the total value (or purchase price) of your property. The additional 10% will be covered by a deposit if you're purchasing, or by existing "equity" (margin) within the property if you're remortgaging.
The main benefit of a 90% Mortgage is that you are covering a large proportion of the properties value with a mortgage loan - and therefore you do not need to raise as much deposit. In the case of a remortgage, again you are able to borrow a greater proportion of the properties value which may be an important requirement in your particular circumstances.
Having said that, the advantages may also act as negatives. The less deposit you put down against a property, or the higher the loan to value ratio, the more exposed you are to falling into "negative equity".
"Negative Equity" is where the mortgage secured against your property exceeds the value of the property. In other words, if you wished to sell the property the sale price would not cover the mortgage - and you would need to find additional funds to release the charge(s) over your property and complete the sale. If you are unable to find the additional funds you will not be able to sell your property - and will effectively be a prisoner in your own home. "Negative Equity" should be a particular concern for both buyers and lenders in an uncertain property market, such as we are experiencing now in the United Kingdom.
Because higher loan to value mortgages are considered a higher lending risk by mortgage lenders, the deals offered are far less attractive than equivalent deals at lower loan to values. The interest rates are a fairly significant margin higher at the moment, and associated fees often greater. Therefore, if you are able to raise a larger deposit, not only will you be at less risk of "Negative Equity", but you will also be much more likely to secure a far more favorable deal.
Wednesday, June 1, 2011
Tuesday, May 31, 2011
Using Mortgage Brokers
Buying real estate usually means that you will be spending a lot of cash. That cash is, usually, money borrowed as a home or housing loan, from lending agencies or banks.
For people who are not familiar with the ins and outs of financial loaning, especially for home loans, there are a number of mortgage brokers who are willing to assist you. Mortgage brokers are licensed professionals who offer loan products of various lenders.
They do not lend the actual money to borrowers but instead acts as the middleman between borrower and lender. Mortgage brokers may work individually or in a firm.
A major plus point of using the services of a mortgage broker, is that they have many contacts giving you flexibility of choice. While obtaining a loan, it would be usually you, who would go searching for the best terms, but in this case, the mortgage brokers do all the leg work for you.
They work with the home buyers by analyzing their financial and credit situation and matching them with the perfect lending institution from their contacts. When dealing with your mortgage broker, don't be hesitant to give the terms and rates that you are willing to accept as it makes it easier for them to match you with a lender.
Another advantage of having a mortgage broker to work with is that if you have a question regarding the process or terminology, he is there to help you and answer your questions. Your mortgage broker can explain the process, define terminology, and assist you with understanding the time frames.
There are numerous lenders with varying qualification requirements; therefore, your mortgage broker can usually provide you with several viable options meeting your terms and requirements. You can then analyze the options presented to you and chose the one that best fits your time frame and budget.
It is important to ask around and get references for mortgage brokers. You can also search online for popular mortgage brokerage firms. You will want to feel comfortable with the broker you chose to work with before you make your final decision on who to use.
For people who are not familiar with the ins and outs of financial loaning, especially for home loans, there are a number of mortgage brokers who are willing to assist you. Mortgage brokers are licensed professionals who offer loan products of various lenders.
They do not lend the actual money to borrowers but instead acts as the middleman between borrower and lender. Mortgage brokers may work individually or in a firm.
A major plus point of using the services of a mortgage broker, is that they have many contacts giving you flexibility of choice. While obtaining a loan, it would be usually you, who would go searching for the best terms, but in this case, the mortgage brokers do all the leg work for you.
They work with the home buyers by analyzing their financial and credit situation and matching them with the perfect lending institution from their contacts. When dealing with your mortgage broker, don't be hesitant to give the terms and rates that you are willing to accept as it makes it easier for them to match you with a lender.
Another advantage of having a mortgage broker to work with is that if you have a question regarding the process or terminology, he is there to help you and answer your questions. Your mortgage broker can explain the process, define terminology, and assist you with understanding the time frames.
There are numerous lenders with varying qualification requirements; therefore, your mortgage broker can usually provide you with several viable options meeting your terms and requirements. You can then analyze the options presented to you and chose the one that best fits your time frame and budget.
It is important to ask around and get references for mortgage brokers. You can also search online for popular mortgage brokerage firms. You will want to feel comfortable with the broker you chose to work with before you make your final decision on who to use.
Monday, May 30, 2011
Thinking About Refinancing Your Mortgage?
Probably the most optimal time to get a refinance on your mortgage is when you can improve your mortgage terms and lower your cost of borrowing. If you are not improving the terms of your mortgage and you are not actually lowering the cost of borrowing, then it's not a good idea to refinance.
There are a number of ways that you can use to better your existing mortgage terms. So, if whatever you choose to do with your mortgage when you refinance could depend mainly on what you aim to accomplish with this activity. These are some things that people can do to improve their mortgage:
Get rid of PMI. By the time you owe less than eighty percent on the value of your home, the private mortgage insurance fees that you pay will no longer be in effect. If you can show that the value of your home has become greater than the 80% mark during your refinance, you can save money on the PMI which you have to pay monthly. In the long run, all costs considered, people will end up paying 12% for private mortgage insurance instead of paying off a similar rate on their loan.
Cutting down the time for payoffs. Your payoff period is normally part of the mortgage that you signed off on. Currently, the most common terms of a mortgage is either the fifteen year or thirty year term mortgage. However, you can significantly lower the cost of interest payments if you opt for a shorter term. In the long run, you save more money on payments even if your monthly expenses increase.
Decrease the monthly payment. Be careful about this because having lower monthly payments doesn't mean you will get a better deal. It is definitely an option to lower the cost of your monthly payments if you can't afford it. In the long run it helps your credit score and keeps you save from foreclosure. However, longer mortgage payments mean that you may pay more in total. If you can lower your payment costs but keep the same terms, then this is definitely good for you.
There are a number of ways that you can use to better your existing mortgage terms. So, if whatever you choose to do with your mortgage when you refinance could depend mainly on what you aim to accomplish with this activity. These are some things that people can do to improve their mortgage:
Get rid of PMI. By the time you owe less than eighty percent on the value of your home, the private mortgage insurance fees that you pay will no longer be in effect. If you can show that the value of your home has become greater than the 80% mark during your refinance, you can save money on the PMI which you have to pay monthly. In the long run, all costs considered, people will end up paying 12% for private mortgage insurance instead of paying off a similar rate on their loan.
Cutting down the time for payoffs. Your payoff period is normally part of the mortgage that you signed off on. Currently, the most common terms of a mortgage is either the fifteen year or thirty year term mortgage. However, you can significantly lower the cost of interest payments if you opt for a shorter term. In the long run, you save more money on payments even if your monthly expenses increase.
Decrease the monthly payment. Be careful about this because having lower monthly payments doesn't mean you will get a better deal. It is definitely an option to lower the cost of your monthly payments if you can't afford it. In the long run it helps your credit score and keeps you save from foreclosure. However, longer mortgage payments mean that you may pay more in total. If you can lower your payment costs but keep the same terms, then this is definitely good for you.
Remortgaging Or Secured Loan?
There are many sort of loans and these can come in the form of unsecured and secured loans, but for homeowners it is sensible to use their homeowner status to borrow at low interest rates by means of remortgages and secured loans.
Secured loans and remortgages are of course only available to homeowners as they both need to be secured on property, and they are great ways for homeowners to raise money which can be spent on just about anything..
There are several matters to be taken into the equation when making up your mind that you need to obtain money for whatever reason.
Secured loans can be the method to choose if a homeowner is tied in with a mortgage deal. When someone arranges a mortgage they have to stay with the same mortgage product for a certain number of years and if they remortgage in the course of this period an early repayment penalty applies.
This penalty can be extremely high and can be many thousands of pounds in charges as the penalty is from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 250,000, the penalty would be from 5,000 to as much as 10,000. Therefore to remortgage within a tie in period would be crazy and a low rate secured loan would be the better option.
When the money is needed in a hurry, again the secured loan is the better choice, taking half the time of the remortgage ,and secured loans take from two to three weeks compared to four to six weeks for a remortgage.
However if speed is not too important , and there is no tie in period remortgages are really better as a remortgage has a better interest rate starting at rates of under 2% at present for those with a minimum 60% Loan to value in their property.
Secured loan rates now start at around the 9% mark which is good but still more expensive than the remortgage.
However they are both excellent loans.
Secured loans and remortgages are of course only available to homeowners as they both need to be secured on property, and they are great ways for homeowners to raise money which can be spent on just about anything..
There are several matters to be taken into the equation when making up your mind that you need to obtain money for whatever reason.
Secured loans can be the method to choose if a homeowner is tied in with a mortgage deal. When someone arranges a mortgage they have to stay with the same mortgage product for a certain number of years and if they remortgage in the course of this period an early repayment penalty applies.
This penalty can be extremely high and can be many thousands of pounds in charges as the penalty is from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 250,000, the penalty would be from 5,000 to as much as 10,000. Therefore to remortgage within a tie in period would be crazy and a low rate secured loan would be the better option.
When the money is needed in a hurry, again the secured loan is the better choice, taking half the time of the remortgage ,and secured loans take from two to three weeks compared to four to six weeks for a remortgage.
However if speed is not too important , and there is no tie in period remortgages are really better as a remortgage has a better interest rate starting at rates of under 2% at present for those with a minimum 60% Loan to value in their property.
Secured loan rates now start at around the 9% mark which is good but still more expensive than the remortgage.
However they are both excellent loans.
Debt Consolidation
Sometimes even the most financially responsible person will run into an occasional situation which leads them to have problems with their debts. There are many things which can go wrong such as the death of a spouse or the loss of employment which can put the household finances into a tailspin. It is during these times you may want to look into debt consolidation as a way of getting your finances back in order.
If you are having money problems, cutting back on expenses is an absolute must. By doing this you'll be able to pinpoint areas where you can save money and then turn around and put that money onto the bills to catch them up. Many people will deny that they are actually spending more money than they have to, and not an honest look at their finances.
Most households have cable television, and movie packages they seldom use. These can be eliminated to save money. You could also do things like pack your lunch instead of eating out everyday. Cutting out magazine and web-based subscriptions is also a good idea until you get caught up.
Knowing what you owe is very important. This is why sitting down and making a list is so very important to you. After you have accounted for every dollar you spend each month, you'll have a much better of how much money you spend each month. This type of accountability will make you more money conscious and go a long way in helping you decide which expenditures are essential.
Getting your bills consolidated is one way to get you back on your financial track. It is a technique used by many families every year, with great success. You do not have to worry about giving the service money up front because their initial consultation should be free of charge. If you do not owe a certain amount, then you cannot use their services.
Once it has been established that you have enough debt to proceed, they will then assess all of your assets and liabilities to develop a plan which will best suit your needs. The company will handle all of your creditors at one time. You will no longer be making payments directly to your creditors. Instead you will be making one monthly payment to the consolidation company.
The service will negotiate lower payments and even go as far as reducing some of your interest rates in order for them to receive payments. Your creditors will be dealing directly with the service you have chosen as your representative and should not be calling you once everything has been settled.
You should know that while your debts are being handled by this type of service, you will more than likely be unable to obtain any credit until all of your debts have been paid off. The good news is that repaying your debts will have less of a negative effect on your credit history than failing to pay them at all.
If you are having money problems, cutting back on expenses is an absolute must. By doing this you'll be able to pinpoint areas where you can save money and then turn around and put that money onto the bills to catch them up. Many people will deny that they are actually spending more money than they have to, and not an honest look at their finances.
Most households have cable television, and movie packages they seldom use. These can be eliminated to save money. You could also do things like pack your lunch instead of eating out everyday. Cutting out magazine and web-based subscriptions is also a good idea until you get caught up.
Knowing what you owe is very important. This is why sitting down and making a list is so very important to you. After you have accounted for every dollar you spend each month, you'll have a much better of how much money you spend each month. This type of accountability will make you more money conscious and go a long way in helping you decide which expenditures are essential.
Getting your bills consolidated is one way to get you back on your financial track. It is a technique used by many families every year, with great success. You do not have to worry about giving the service money up front because their initial consultation should be free of charge. If you do not owe a certain amount, then you cannot use their services.
Once it has been established that you have enough debt to proceed, they will then assess all of your assets and liabilities to develop a plan which will best suit your needs. The company will handle all of your creditors at one time. You will no longer be making payments directly to your creditors. Instead you will be making one monthly payment to the consolidation company.
The service will negotiate lower payments and even go as far as reducing some of your interest rates in order for them to receive payments. Your creditors will be dealing directly with the service you have chosen as your representative and should not be calling you once everything has been settled.
You should know that while your debts are being handled by this type of service, you will more than likely be unable to obtain any credit until all of your debts have been paid off. The good news is that repaying your debts will have less of a negative effect on your credit history than failing to pay them at all.
Luxuries You Can Afford Thanks To Secured Loans And Remortgages
The world abounds in many things that are quite amazing and full of delights. There are different continents to visit, food to be enjoyed, fast cars to make you delirious with their speed, and the company of friends to relax with.
One of your favorite television shows is Top Gun, or almost any other show that depicts luxurious and fast cars.
You spend hours at the weekend in particular watching these programs and gaze in wonderment at the beautiful mainly Italian fast cars that they show, as well as at the beautiful scenery at the sides of the road on which they drive, and you wish you could go to some of these places yourself.
Every year you watch all the events of the Cannes Film Festival in May and those of the Venice Film Festival which is held every September in the magnificent city of canals, and you would like to experience all this at first hand as well as seeing your favorite stars in person. You hope that if you ever seen them face to face you would not be severally disappointed, as many of them probably look as bad as you do when they get out of bed in the morning.
While in London and in France you want to live in well known five star hotels such as The Ritz, The Hilton or The Savoy.
You would also like to dine in the finest restaurants while attending all these sporting events and enjoy the best of French gastronomy such as the best foie gras in the world.
The problem is that all this will cost a lot of money but life is for living and you feel that there must be a way in getting the money for these trips.
You can achieve everything you want if you are a homeowner if you have equity in your property, as secured loans and remortgages can pay for this trip of a life time or almost anything else. In fact you can also use a secured loan or a remortgage for debt consolidation which can mean could that this vacation could cost you very little.
One of your favorite television shows is Top Gun, or almost any other show that depicts luxurious and fast cars.
You spend hours at the weekend in particular watching these programs and gaze in wonderment at the beautiful mainly Italian fast cars that they show, as well as at the beautiful scenery at the sides of the road on which they drive, and you wish you could go to some of these places yourself.
Every year you watch all the events of the Cannes Film Festival in May and those of the Venice Film Festival which is held every September in the magnificent city of canals, and you would like to experience all this at first hand as well as seeing your favorite stars in person. You hope that if you ever seen them face to face you would not be severally disappointed, as many of them probably look as bad as you do when they get out of bed in the morning.
While in London and in France you want to live in well known five star hotels such as The Ritz, The Hilton or The Savoy.
You would also like to dine in the finest restaurants while attending all these sporting events and enjoy the best of French gastronomy such as the best foie gras in the world.
The problem is that all this will cost a lot of money but life is for living and you feel that there must be a way in getting the money for these trips.
You can achieve everything you want if you are a homeowner if you have equity in your property, as secured loans and remortgages can pay for this trip of a life time or almost anything else. In fact you can also use a secured loan or a remortgage for debt consolidation which can mean could that this vacation could cost you very little.
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