Is Your Mortgage at Risk?

Recently, the FSA launched a report suggesting upto a million homeowners could be at risk of repossession. They said the mortgages most at risk were mortgages whichwere more than 3.5 times incomeMortgage over a longer period than 25 yearsInterest only mortgages.Mortgages more than 90% of LTVOn these criteria, I should start worrying as the first [...]

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[Source: Mortgage Blog]

Property Prices Continue to Fall

House price data from the Land registry showed that UK house prices fell on average by 0.4% in December, bringing the annual inflation rate down from 8.1% in November to 6.7% last month.The land registry estimate that average UK house prices are now 184,469The only 3 regions to avoid house price falls were the north [...]

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[Source: Mortgage Blog]

Tips for Selling Your House in A Buyers Market

With house prices on both sides of the Atlantic falling, those wishing to sell their house are placed in a more difficult situation. Although, it is currently a buyers market there are some tactics that can be used to maximise your selling price.Choose Right Valuation.Just because house prices are falling, dont despair and set a [...]

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[Source: Mortgage Blog]

Housing Market Terms

I have written a guide to the UK Housing Market hereIt includes an explanation of terms from affordability to the sub prime crisis and the wealth effect.If you would like to ask a question about any other aspect of the housing market or Economics, feel free to leave a comment or contact me here.On my [...]

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[Source: Mortgage Blog]

Best Offset Mortgages

Offset Mortgages, offer the chance for homeowners to combine their current accounts with their mortgage balance. The main advantage of an offset mortgage is that if you have savings in your current account, your mortgage balance is automatically reduced leading to lower mortgage payments. The savings of an offset mortgage are magnified for a high [...]

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[Source: Mortgage Blog]

Is the Housing Panic Justified?

As the saying goes - There are lies, damned lies and statistics.It seems that there are no end of statistics about the housing market, some of which can seem a bit contradictory.At the moment there is a general assumption that UK House prices are set to fall and are vastly overpriced. However, before you rush [...]

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[Source: Mortgage Blog]

Interest Rate Cycle in UK

Amidst all the gloom surrounding the UK housing market it is worth putting current difficulties into a historical perspective.Graph Showing Mortgage Interest Rates in UK  In 2008, Interest Rates are currently at 5.5% and most predictions are for UK interest rates to fall.The lowest interest rates in the UK were reached a couple of years [...]

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[Source: Mortgage Blog]

Northern Rock Rescue Plan

Northern Rock Rescue plan - How is Your Mortgage Affected?The most likely scenario for the beleaguered Northern Rescue package is a rescue plan involving Virgin or another private firm with hefty government guarantees. This solution, if accepted, falls short of full nationalisation but it does rely heavily on government guarantees. It will also cost the [...]

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[Source: Mortgage Blog]

First Time Buyer Mortgage Ratios

An interesting study here, Mortgage Ratios for first time buyersThe main trends are:A rise in mortgage to incomes ratio from 1.86 in 1979 to 3.39 in 2007 Q3. There has been a faster increase since 1998 from 2.38 to 3.39, just 9 years later.Rise in Interest payments as a % of income. In the past [...]

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[Source: Mortgage Blog]

Highest UK Mortgage Lending

2007 saw another record year for UK Mortgage lending. The Council of Mortgage Lenders (CML) show that banks lent a total of 362 billion in 2007, this is unsurprising given the increase in house prices, which has necessitated more expensive mortgages.However, whether 2008, will see a record year is uncertain. With house prices falling at [...]

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[Source: Mortgage Blog]

How Much Time Would You Spend Planning A Mortgage?

It seems Britons are more interested in spending time on planning a holiday than maximising the savings from a mortgage. A study by Fool.co.uk found that:36% of customers spend more than 10 hours selecting a holiday. Only 21% would spend more than 10 hours selecting a mortgage.41% of customers do not shop around for the [...]

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[Source: Mortgage Blog]

Inflation and Interest Rates in 2008

Many had predicted the fall in house prices would precipitate significant cuts in interest rates to bolster the economy. However, it appears the UK may be experiencing the worst of both worlds. Not just slower growth but also higher inflation.Factory gate inflation (the price of goods leaving the factory at wholesale prices) is at [...]

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[Source: Mortgage Blog]

How To Write A Letter of Complaint to Your Bank.

Many people mis out on a potential rebate or refund because they are reluctant to write a letter of complaint. For example, in the UK, there has been an investigation into the misselling of loan insurance (payment protection insurance). It has been estimated that the insurance schemes are so profitable that the banks keep upto [...]

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[Source: Mortgage Blog]

Payment Protection Insurance for Loans

Next time you take out a loan, think very carefully before buying the extra insurance. PPI (Payment protection Insurance) for loans has become a very profitable way for banks to make extra money on selling loans. It is estimated that only 20% of money collected in the scheme is returned to consumers, leaving banks with [...]

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[Source: Mortgage Blog]

Mis Selling of Loan Insurance PPI

These suggestions may be an indicator for whether you are entitled to a refund, or at least partial refund. It is helpful if you can have to hand a copy of the initial agreement. If it has been lost, ask your bank for another, dated from when you took it out.This is a template of [...]

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[Source: Mortgage Blog]

Chartered Surveyors Call for Rate Cut

According to the Institution of Chartered Surveyors House Prices fell in December at their fastest rate for 15 years. (This suggests recent data from the Halifax showing rising house prices may have been unreliable.)The study shows 49.1% more surveyors reported a fall than a rise. November’s level was 40.6%. Falling house prices were reported across [...]

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[Source: Mortgage Blog]

Recommendations for UK Housing Market

The UK housing market is very significant for both the economy and the general population. Housing is the biggest form of wealth and also the biggest cause for financial difficulties. In the recent housing boom there have been clear winners, but, there have also been clear losers. These are my recommendations for a more equitable [...]

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[Source: Mortgage Blog]

Offset Mortgages and Bankrupt Lenders

Readers Question from Richard Sage: What happens to offset mortgages if a lender goes bankrupt?i.e. Can one net, or does one have to pay the full loan and get one’s percentage as a creditor for the deposits?In commerical trading contracts (E.g. ISDA masters) the point is usually specifically addressed.Everybody thought I was daft raising the [...]

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[Source: Mortgage Blog]

Predictions for Pound Sterling

Looking at Economics fundamentals, it is hard to understand why the Pound rose so much against the dollar in recent years. I think the main reason for the Pound’s strength is that it offered an easy alternative to the dollar, but, in looking for an alternative to the dollar the merits of the Pound has [...]

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[Source: Mortgage Blog]

Ask A Question On Housing Market

If you would like to ask a question on the housing market, economics or mortgages, feel free to leave a comment at the bottom of this post.I will endeavour to answer it the best I can.I studied PPE at Oxford University and now work as an Economics teacher at Cherwell college in Oxford.If you would [...]

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[Source: Mortgage Blog]

How Long Does it Take to Buy A House?

Buying a house can be one of the most stressful events that people take part in. Unfortunately, there is no guaranteed time to complete the process of buying a house; it will depend upon many factors. However, if you are lucky and things go smoothly then it may go through in 5 weeks time from [...]

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[Source: Mortgage Blog]

The Problem With Call Centres

Call centres are an unavoidable fact of modern life. They rarely offer much joy. These are some of the problems I have encountered with call centres. I’m sure our readers could add quite a few more.1. Please choose from the following 6 options.We could easily invent a competition - which company requires you to make [...]

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[Source: Mortgage Blog]

Applying for Mortgages Online

Research, undertaken by the Yorkshire Building Society, suggests that 95% of consumers will use the internet, at some stage, when taking out a mortgage. At the moment, 20% of respondants suggest that they are willing to complete a full online mortgage application. However, the number of people taking a mortgage out online is likely to [...]

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[Source: Mortgage Blog]

Understanding the Sub Prime Crisis

A humorous, but worrying accurate look at the sub prime crisis from the perspective of the Two Johns on BBC.Also a look at the Economics of FearTrying to predict InflationA look at the year ahead for the UK Housing Market at the Independent

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[Source: Mortgage Blog]

Ratio of House Prices to Income

In 2003 Average household income in England was = 34,197 Average house price = 115,181House price to income ratio = 3.36In 2008 Average income was about 38,302 (1) Average house price =197,000 (BBC)Therefore house price to income ratio about 5.1London average house prices 4.8 times income (2006), against 2.6 times in 1970. The South [...]

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[Source: Mortgage Blog]

Why Have House Prices Increased Faster than Inflation?

Halifax have announced figures to show that in December house prices rose by 1.3%, cancelling out the previous month’s fall. This shows that the doom and gloom surrounding the UK Housing Market may be slightly exaggerated. However, some people question how reliable the data is. For example, other statistics such as mortgage approvals show definite [...]

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[Source: Mortgage Blog]

Consolidating debt into a mortgage

One of the big advantages of being a homeowner is the option to consolidate higher interest paying debt into your mortgage.The basic advantage of consolidating debt into a mortgage is that you can move your debt to the lowest interest paying type of loan.For example, if are paying interest on store cards or credit cards [...]

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[Source: Mortgage Blog]

10 Simple Tax Savings Tips

These tips are primarily focused on the UK, but, I hope our American viewers will be able to find some useful tips amongst these as well.1. Savings in a Cash ISAISA is a special savings account where you can earn interest without paying any tax on it. It allows upto 3,000 a year to be [...]

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[Source: Mortgage Blog]