Why not change to a tracker mortgage?

Fixed-rate home loans may be in mode, but with a reduction
in rates imminent it would be advisable to consider the
tracker option instead.

Fixed-rate mortgages have been very popular in recently but
with all the talk about interest rate cuts, a tracker
mortgage could be the way to go.

Even though interest rates were kept on hold last month,
there are indications that the short and long term trend is
downward. A tracker mortgage would be a sensible option as
it follows the movements of the Bank Of England base rate.

According to the Council of Mortgage Lenders, fixed rate
mortgages reached a peak in August 2007 and they accounted
for almost 80% of all mortgages taken out in the UK.

Fixed rate mortgages appeal to those who want to know
exactly how much their repayments will be each and every
month and are an attractive option in circumstances where
there is an upward trend in the interest rates.
However, most experts now agree that the interest trend
will be downward therefore the tracker mortgage will be the
most appealing as many will worry about fixing an interest
rate at the peak of it’s cycle.

A tracker mortgage is named in this way since it tracks the
movements of the base interest rate from the Bank Of England.
In effect it caclulates the mortgage repayment based on the
base rate of the day and adds a fixed percentage to this
rate. So as interest rates fluctuate the mortgage payments
move accordingly. This could be deemed an ideal mortgage
when the trend of interest is downward. Since, when the Bank
Of England rate falls the mortgage payment also falls. The
amount that is charged over the base rate will vary from
lender to lender.

With tracker mortgages you can choose to have a fixed
period, such as two or three years, where the mortgage
interest rate will track the Bank of England base rate. Once
this period had expired the mortgage will revert back to the
standard variable interest rate charged by the lender.

With this kind of mortgage there are the options to revert
to a tracker for a fixed period which is usually 2 or
3 years. During this period the mortgage repayment will be
based upon the base rate from the Bank Of England. After the
agreed tracker rate period expires then the mortgage will
revert to the standard variable rate. The advantage of
choosing this product during a period of interest rate cuts
is that your repayments will decrease during this period
and after the expiry date you can review your options again.

tracker mortgages
remortgages
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November 28th, 2007 - Posted in Remortgages | | 0 Comments

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November 27th, 2007 - Posted in Remortgages | | 0 Comments

Paragon attempts to stave off a crisis

Paragon, the beleaguered mortgage lender, is prepared to sell off a £140m reservoir of car loans as part of its attempts to stave off a crisis rights issue.

The buy-to-let specialist revealed last week that it may need to tap its shareholders for £280m by the end of February to stay in business.But it is now lining up sales of a sum of loan books in an endeavor to raise cash. Along with the book of car loans, the visionary disposals are thought to embody a £60m portfolio of unsecured loans and a £60m book of hire purchase lending agreements.

It also has a £450m book of secured loans.Although the disposals may not furnish enough cash to solve all of Paragon’s problems, it is implicit that they could help the company renegotiate terms with its lending banks. Paragon is nevertheless in talks with its lenders, JPMorgan and Royal Bank of Scotland, about a possible renewal of a £280m working capital facility and a £2.3bn warehouse facility, which is the mortgage lender’s prime origin of funding.

Although Paragon’s advisers at UBS are willing to guarantee a discounted rights issue, the company still thinks it will not need to use the facility, and that it can maintain a suitable agreement with its bankers within the next few weeks.

It is understood that the lending banks have been attempting to mediate the renewal of the working capital facility and the warehouse funding line as one deal. Paragon is now attempting to renegotiate the two deals apart, and may attempt to find other banks interested in supporting a deal. If the company cannot meet new terms with the banks it will have to stop lending, and its existing mortgage book will go into run-off.The first move comes as all Britain’s mortgage banks struggle to shore up their funding position to allay market fears that they could become the next Northern Rock Bradford & Bingley sold a £4.2bn book of commercial loans to General Electric and Dexia last week, which offered security to the market.

Alliance & Leicester has completed two large private placements of mortgage assets since the close of September and is thought to have secured its funding posture until the middle of next year. But the bank is still attempting to secure increased funding, according to market sources.

November 25th, 2007 - Posted in Remortgages | | 0 Comments

Today’s News

This is Money - The loan to value on re mortgages is down to 65 and 75 % to get good rates. Good customers will get better rates but we will all pay more, fact. The BOE are unable to see the “wood for the trees” and this shows in the inflation figures they produce and

Further legislation for e-conveyancing: Land Registry starts 2nd
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Farepak single mother remortgages her home to pay back savers
This is London - A single mother who worked for the collapsed Christmas hamper firm Farepak has re-mortgaged her home to pay back savers out of her own pocket. Alison Berry, 33, was so upset that her friends and neighbours lost out when the company went under that

Stewart Title Ltd. Issues Title Insurance Policy for the First
MSN MoneyCentral - The company’s products cover all types of real estate transactions including commercial, residential and re-mortgages. Stewart’s team specialises in customizing policies for residential and commercial clients. About Stewart Title Ltd.

November 25th, 2007 - Posted in Secured Loans | | 0 Comments

Why Choose A Secured Loan Over A Remortgage?

A remortgage is not always an appropriate recommendation,
as you may want to keep further borrowing secured on the
property separate from the main mortgage account.

There might be a number of good reasons. For example, there
could be a large redemption penalty when remortgaging, or
you may have secured a fixed rate in the past that is still
highly competitive compared to current interest rates.

By using a secured loan, the redemption penalties are
avoided and the current fixed rate will be protected, as
the original first mortgage will remain in place.

If you want to consolidate debt then a mortgage can work
fine. However, the majority of people are likely to want to
repay earlier than their existing mortgage term. By using a
secured loan you can select a realistic timescale to repay
the loan, and the original mortgage can stay in place for the
selected term.

Many people’s circumstances change after arranging a mortgage.
If you  no longer fit normal mortgage income multiples, or
have had some credit problems since taking your mortgage,
you might have to pay a high price for the new mortgage,
whereas a secured loan can mean receiving the funds you need
without losing the prime rate he has on your existing mortgage.

Secured loans can be processed from initial enquiry to
completion a lot quicker than a traditional first charge
mortgage. Depending on the loan amount, the case could be
completed and paid out iine less than a week. This can be
advantageous if you have to raise funds quickly.

Secured loans can be used for many different purposes.
Typically, if the purpose is legal then the loan can be
processed. Many first charge lenders can be difficult when
it comes to the purpose of refinancing.

When you have made the decison to take on a secured loan,
you will need to search and comapre all the available
offers on the market to the find the best deal that suits
your unique requirements. Interest rates and repayment
periods will differ from lender to lender as well as the
borrowing levels and terms of the loan regarding early
redemption penalties.

It is wise to choose a broker who has the ability to search
the whole market for the best deal and not one who is tied
to a narrow group of lenders. Also there will be limitations
to the options available depending upon your credit history
so it is advisable to shop around so that you find the
optimum secured loan for your needs

secured loans
remortgages
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November 16th, 2007 - Posted in Secured Loans | | 0 Comments