UK Finance Blog

Government Housing Initiatives

2008-09-02T20:46:00.002Z

It is clear that Prime Minister Gordon Brown wishes to make the topic of housing towards the top of his political agenda. Examples of this can be found in the recent proposals to increase housing stock and encourage longer-term fixed rate mortgages.

It is clear that many of these proposals are much needed - building more homes has to be a positive move. There has long been the problem of a lack of supply in the UK housing market. Even with the new annual housing building target for 2016 from 200,000 to 240,000, many industry pundits have predicted that even with the extra figures this may not be enough to satisfy demand.

So where are all these new homes going to be built? I mean, after all we are just a small island. Many believe that the government will have no choice than to start eating into our beloved greenbelt land. It is simply not plausible to believe that there is enough space in our towns and cities to build all these new homes. On this point many believe that the government is simply echoing the voice of many would be first time buyers in order to gain support for this growing issue.

Aside from political spin, another initiative that the new Chancellor has announced is that of 20 - 25 year fixed rate mortgages. The jury seems to be out on this one however many mortgage brokers feel as though this move represents pointing the finger of blame at their industry for the present housing crisis.

Shared equity is not exactly a new idea although it has come to the forefront of the government's plans in recent times. The Prime Minister wishes to make more housing affordable through shared equity schemes. At the present time, many shared equity schemes seem to be geared solely towards key workers. Many people are put off these schemes due to confusion surrounding them - eligibility and legal issues combined.

Many of us will have heard of the Right-to-buy schemes however this is very much restricted to council housed areas. The initiative was introduced in the Thatcher years in order to provide the 'ordinary' man with the opportunity to purchase his own home. The Right-To-Buy scheme has faced its fair share of critics over the years. Today there are over 1.7 million people on the waiting list for a council property.

Many of the initiatives that have been proposed are simply old hat - seen it all before. The topic of housing is a very fiery issue and one in which will spark much emotion. There is no doubt that there needs action needs to be taken and an element of risk at the same time.

Buy To Let Mortgages

2008-08-12T19:47:00.003Z

In recent years the housing market in the United Kingdom has seen a huge increase in the demand for investment properties and buy to let mortgages. This housing boom has been brought about largely by the promise of a house price increases and a regular rental income.

There are other factors of course that have played a part in this transformation of the UK housing market. Property has long been viewed as a safe investment by the British people. Our love of bricks and mortar is evident countrywide. The pension crisis in the nineties has only added fuel to the fire in respect of the investor's need for a reliable long term investment.

Buy to Let mortgages are essentially the same as the standard owner occupier type mortgage. There are however a few key differences. The main difference between the two types is that at the time of writing Buy to let mortgages do not fall under the banner of the Financial Services Authority (FSA) watchdog. The other key differences are in the way that the buy to let lender assesses these applications in respect of both risk and affordability.

Buy to let lending has long been perceived by many lenders as carrying a greater degree of risk. The thinking behind this is that a tenant is less likely to look after the property with as much care as the owner occupier. The difference between the two rates has become much less obvious however in recent years largely due to the level of competition now prevalent in the market place. It is now possible to see buy to let mortgage rates on par with their owner occupier counterparts however the lender arrangement fees tend to be a great deal higher.

Secondly the way in which the buy to let lender assess affordability is a different calculation to that of income multiples or a debt to income ratio. Buy to let lenders will assess affordability by taking into account rental income – A logical method one would say.

The buy to let bandwagon does have however many pitfalls. The main risk associated with buy to let property investment is the lack of suitable tenants. There are many considerations that must be taken into account when looking to invest in property – The main two factors being location and type of property.

There are many areas throughout the country that are completely saturated with rental properties. This can pose big problems when attracting suitable tenants. It is well worth taking time out to research areas where there is a lack of rental properties. It is also important to realize that certain types of properties will be easy to rent out than others – for example one bedroom flats tend to be more in demand than two bedroom ones. This consideration also ties in with locality.

The most important thing when thinking about investing in property is not to rush into anything without firstly planning ahead.

Assisting A Borrower In Arrears

2008-07-29T20:38:00.003Z

You only have to look on the foot of any mortgage lender or mortgage broker's website to see a written warning stated in bold that 'your home may be repossessed if you do not keep up repayments on your mortgage'. That of course is the nature of a mortgage and secured finance in general

Missing a payment on a mortgage or secured loan is a very big problem for both a borrower and lender. From a borrower's point of view if the missed payments are left to accumulate then they run the risk of having their home repossessed. From a lender's point of view, they potentially run the risk of not being able to re-coup all monies owed from the borrower if in the worst case scenario; the property is not sold for its full market value at auction after being repossessed and there is a shortfall remaining subsequently. Both parties will generally wish to avoid court action at all costs unless the situation is left to worsen to the point of no return as perceived by the lender.

In every situation where a payment is missed on a mortgage or secured loan, the best advice that any mortgage professional will give the borrower would be to contact the lender at the earliest possible stage. In some situations where the borrower is unable to work due to an accident, sickness or unemployment; a protection policy will be in place to be claimed upon to cover the mortgage payments where the individual has arranged one previously. However, where there is no such insurance policy in place then the borrower will need to make an arrangement with the lender to clear off the arrears.

By contacting the lender, they may be able to assist you in a number of different ways. These solutions may include simply setting in place a repayment plan over a set period of time in order to clear the balance of the arrears. This may be applied by simply increasing the borrower's monthly mortgage payment over a period of six months for example. This option is will tend to only be used where the borrower has the financial capability to make these increased payments. Another idea may be to switch the mortgage from Capital Repayment to an Interest only one for a temporary period of time. This may ease immediate cash flow issues for the individual however again; this solution would only be available of course to those paying their mortgage on a Capital Repayment basis.

Many mortgage products today allow for payment holidays to be taken which could also be used in these situations where money is tight. A term extension may be appropriate where the borrower is paying the mortgage on a Capital Repayment basis. The lender may even decide to capitalize the arrears into the mortgage. Any measure that is suggested will very much be worked out on a case by case basis as each borrower's situation will differ from another.

Why A Low Rate Mortgage May Not Be All That It Seems.

2008-07-26T15:53:00.004Z

Borrowers who are intent on finding the most competitive fixed rate mortgage would do well to watch out for excessive arrangement fees being added to the loan. Many eye-catching fixed rate mortgages will often have attached astronomical fees that are not quite so attractive on second glance.

Many brokers within the industry claim that some mortgage deals that on first glance appear to be the most competitive on the market could actually work out more expensive when compared to loans carrying higher interest rates but lower arrangement fees.

It is common for a mortgage lender to calculate their arrangement fee as a percentage of the loan advance - given the level of many mortgages in the United Kingdom today; this can of course result in huge fees being applied. Up to 3.5% may be applied as an arrangement fee at the top end for the chance to fix a low rate of interest for a number of years.

In the current economic client it is true to say that these are uncertain times for mortgage payers in light of the four interest rate rises in less than a year. The cost of borrowing has soared on both sides of the fence - lenders and borrowers alike. This week it was reported that the Bank of England's Monetary Policy Committee decided not to raise interest rates by only the narrowest of margins this month giving rise to speculation of imminent increases. This speculation has only helped to drive up the swap rates on the market – the rates of interest that predetermine fixed-rate prices - which in turning is forcing many lenders to withdraw much of their old range products.

Cast your mind back only two years ago where you would be able to secure a fixed rate mortgage for as little as 4.39 per cent. Nowadays however, many borrowers would expect to arrange a rate in excess of 5.5 per cent.

Since the start of this month, many of the major High Street lenders such as Northern Rock and Halifax have already withdrawn many of their best fixed rate deals. Within the industry it is widely regarded that if swap rates continue to rise, it will not be long before the demise of the sub-6 per cent mortgage unless you are prepared to pay a large arrangement fee.

When looking for the most competitive fixed rate deals, care must also be taken in respect to applicable 'Overhang' penalties. Another way for a lender to offset the cost of a competitive fixed rate of interest is by ensuring that the borrower pays the standard variable rate of interest for a predetermined period of time, or charging an early repayment charge for moving the mortgage before this period ends.

Secured Loans: What Are They?

2008-07-23T16:36:00.002Z

A secured loan is in essence a loan that is secured against a property or asset - For most people this usually means their own home or investment property. A mortgage is perhaps the most common form of secured loan that most of us take out at some stage in our life. Mortgages and secured loans enable us to realise our dream of home ownership which would be out of the grasp of most people should such a transaction require a full upfront payment.

In the case of homeownership; the sheer size of the loan needed to purchase the property would in most cases would make it a too greater risk for the lender should there be no re-course to recover their money in the event of borrower default. The re-course in this case would of course mean property repossession. By the very nature a secured loan means that most individuals will take any reasonable measure to ensure that the payments are kept up on time and in full - Anxious of the repercussions that would occur if they were not.

The term 'secured loan' when used in the mortgage industry however refers to a second charge homeowner loan. Second charge relates to the way that the legal charge is registered against the property - This is usually second to that of a first mortgage.

Secured loans are usually arranged for those borrowers seeking extra finance who are tied into their current mortgage with a substantial early repayment fee to pay should they switch lenders. Secured loans may also be arranged for those homeowners who are looking for additional capital in a shorter timeframe than it would take to complete a remortgage application.

Of course not all borrowers have the same attitude towards debt repayment. This subsequently means that lenders assess each application on an individual basis keen to ensure that where there is a higher risk of lending to certain individuals, that they adjust the interest rates accordingly. Secured loans can be arranged for nearly every type of borrower from those with a perfect credit record to those with a poor one.

The rates of interest applicable to secured loans depend largely on your current situation. Generally these rates of interest will be slightly higher than those offered by first mortgages lenders. This difference is due to the fact that in the event of property repossession, the second charge mortgage lender would in effect, have to queue up behind the main mortgage lender and hope that there are enough monies left over to clear the balance of the loan outstanding.

How To Avoid A Repossession Order Turning Into An Eviction

2008-07-17T17:39:00.004Z

There is no doubt that keeping up the monthly repayments on various debts coupled with the price of modern living can be a very difficult task. When it comes to debt repayment on a mortgage or secured loan however; not everyone prioritises these repayments over every other form of debt. This can of course have serious consequences - the worst case scenario being property repossession.

Falling into mortgage or secured loan arrears can be caused by many different factors - In the majority of cases this can happen due to a relationship breakdown, accident, sickness or unemployment. Another common factor of course is as previously mentioned - having high levels of consumer debts and outgoings. This can have a snowball effect in the way that one or two missed payments on a credit card or store card can make its way down to the more important commitments such as the mortgage or secured loan (where applicable). For the majority of individuals, the monthly mortgage repayment represents the largest single outgoing. For this reason, there is a very real temptation to free up the money allocated to pay the mortgage in order to alleviate other more seemingly pressing commitments.

Even when the circumstances seem at their most dire, many borrowers may be surprised to discover the many different courses of action that may be taken to stop the problem from escalating and ultimately; preventing repossession of the property. The majority of these options may be open to you at the discretion of the lender such as; term extension, capitalisation, payment holidays and payment plans.

Another option to consider is that of a remortgage. Where you have available equity within your property and an ability to satisfy affordability criteria, a remortgage can offer one of the most effective ways to combat the problem of repossession.

Even with a possession order, it is still possible to save your home. In most cases, where a possession order is granted to the lender by the courts, the homeowner is given 28 days to make arrangements to vacate the property in question. It is in fact possible to prevent any imminent eviction by way of repaying back the debt to the lender, inclusive of any arrears and charges. Even if a property has been repossessed by the lender, the amount owed may still be paid back immediately prior to the property being sold.

Without taking decisive action in these situations, repossession is not just a threat that faces the borrower but a very real possibility. Even with children, a court is not likely to make such exceptions very often.

In the initial stages of mortgage arrears there is a temptation for many to bury their heads in the sand. This mentality will include ignoring phone calls and emails, not opening the post and so on. This is not widely regarded as a sensible approach to such situations. Losing a property to repossession is a devastating experience and one in which can be avoided in most situations - regardless of the underlying reasons behind the mortgage arrears. It is important to obtain professional help at the earliest opportunity. As little as a just a couple of missed payments can be enough for a mortgage company to start repossession proceedings.

What You Need To Know About Early Repayment Charges

2008-07-08T20:54:00.001Z

An Early Repayment Charge (ERC) is also known within the industry as a redemption penalty, or redemption charge. It is a common condition of many fixed rate, discounted and capped rate mortgage products that an early repayment charge will be applied in the event of redeeming the mortgage before the tie-in period finishes. This tie-in period will of course differ from one mortgage product to another - generally speaking, the tie in period will last for as long as your fixed, discounted or capped rate.

Another charge that you may have heard of is an overhang penalty - This is not very common in todays market however it can be applied even after your fixed rate period has come to an end. The best time to find out about these different charges is at the start of any mortgage or loan application. In respect to mortgages, all fees and charges are highlighted in the Key Facts Illustration (KFI) which will be issued to you before the start of the application.

Many fixed term unsecured and second charge loans will apply an early repayment charge throughout the duration of the loan term. Again the charge applied will differ from one lender to another and will usually be calculated as one months interest, or a number of months worth of interest.

The early repayment charge will often have a large bearing on a borrowers selection of mortgage. If an individual is looking to move house within any given tie-in period, it is important to ensure before embarking on the mortgage application that the product is portable, or the early repayment charge applicable is kept to a minimum. In every case it is important to do your research and enquire at the start of any mortgage or loan application about any early repayment charges applicable.

If you are considering paying off a mortgage or loan before the end of its term or tie in period, you must be aware at the outset that this action could prove extremely costly. Many mortgage lenders will calculate their early repayment charges on a percentage of the outstanding loan amount. Many sub-prime mortgage lenders may calculate this as high as 6% of the outstanding balance!

Benefits Of Debt Consolidation

2008-07-06T10:17:00.003Z

There are countless people in today's society who suffer from the burden of having excessive bills and debts. Credit Card and Store Card spending is perhaps the biggest contributor to consumer debt in the United Kingdom today. This is largely due to the fact that they are usually very easy to obtain. Many also carry very large credit limits.

Many Credit Card companies have for a long time advertised their services to prospective customers in relation to transferring their existing credit card balances. This would usually carry a special offer term at which time the borrower would not pay any interest on their outstanding balance - This could be anywhere up to one year and even beyond that time in some cases.

Up until a few years ago, many credit card borrowers were able to do this without incurring any fees whatsoever. However the credit card companies have become wise in recent years to the practice of transferring the outstanding balance every time the interest free period comes to an end. Today, many of the major credit card companies now impose a fee for transferring a credit card balance - This usually equates to a percentage and can be in excess of 3%.

Debt consolidation is viewed by many as simply delaying a problem until a later stage. Certainly that may be the case when transferring credit card balances. However in the case of a debt consolidation remortgage, the financial savings on offer can be huge which can also equate to substantial stress relief and peace of mind.

Debt consolidating by way of a remortgage is something that requires much thought and consideration. Although the monthly savings on offer can often be substantial, this form of debt consolidation will usually mean spreading your monthly repayments over a longer period of time which obviously means that you will end up paying back the debt for longer. By using the equity in your home to pay off the unsecured debts will also mean that they then also become secured against your property. Provided that you are aware of both these factors and are happy about the risks involved should you fail to keep up with the increased repayments; it is then that you should contact a professional mortgage advisor in order to obtain further information and assistance.

Unfortunately the hard truth is that debts do not just disappear if you are struggling to meet the repayments. There are of course other forms of action to be taken and anything that you decide upon should be thought about thoroughly. Unsecured debts take many forms including that of hire purchase agreements, bank loans, unsecured personal loans, credit cards and store cards. The buy now and pay later culture is one that needs to be changed within society however at this point in time there seems to be little rest bite for our desire of spending!

Selecting A Commercial Property

2008-07-04T15:40:00.006Z

Commercial property is advertised through many different channels, largely in the same way as residential property. As a potential buyer you can search for commercial properties via:

The internet
Trade magazines and newspapers
Specialist auctions
Local and National Press
Specialist Estate Agents

There are many factors that must be considered before embarking on such a potentially large financial commitment. Any kind of mistake could prove to be very costly in the long run. When researching the commercial property market, it is important to consider the following factors:

The ideal type of property for your business - Compromises will always be necessary in business to a certain extent however your selected commercial premises should be suitable for business purposes.

Does the property offer adequate space, both at the present time and in the foreseeable future? For many businesses, expansion is often a natural progression rather than a conscious one. Many companies purchase a business premises to suit the immediate need without considering the impact of rapid expansion in the future.

Will the business be able to function from the selected premises? On occasions, certain properties may be subject to certain restrictions in respect to the type of business they can accommodate. Will you need to obtain planning permission and if so, how likely is it to be granted?

Location - This is a make or break factor for some businesses. Is the business going to be solely reliant on passing trade? Does the location need to be central or an out-of-town site? Will the preferred location be easily accessible for staff to travel to work? Is the area well served by public transport?

Expenses and running costs - Local Authority charges and business rates will differ from one area to another. High charges and running costs will not only put a strain on the company's finances but could also make future saleability more troublesome.

Facilities - Are there adequate parking spaces available for staff? Is there a kitchen facility for staff? If improvements need to be made, can this be done within a reasonable budget?

Once you are confident that you have found a suitable property for your business then it might be a good time to make an offer. Where a mortgage is required to purchase the commercial property, a written offer in principle from the lender should be in place before an offer is made.

A conditional offer will usually be made after a comparison has been made with a similar property and the price is established as appropriate. Any offer will be subject to a number of conditions such as a full buildings survey and planning permission granted where appropriate.

Bad Credit Remortgages Explored

2008-06-28T12:46:00.003Z

A bad credit remortgage is simply a term used to describe a remortgage for a borrower with a poor credit rating. An individual's bad credit rating can relate to a number of different factors including single incidents and an accumulation of different ones - County Court Judgements, Credit Card and Store Card defaults, Mortgage and loan arrears, mortgage default, hire purchase default, an Individual Voluntary Arrangement (Or trust Deed in Scotland), or even a previous bankruptcy.

There are many lenders within the United Kingdom today who will consider lending to those individuals with bad credit. Up until a few years ago, this segment of the market was serviced primarily by specialist, or 'sub-prime' lenders however more recently many of the major banks and building societies have also come on board to provide such mortgages.

The sub prime mortgage industry is still booming despite the recent well documented troubles within the United Kingdom mortgage industry. To many lenders, bad credit remortgages offer a very lucrative business proposition as it is common for the interest rates applied with these types of mortgages to be a great deal higher than their prime counterparts. Up until the middle part of 2007, many people regarded bad credit remortgages as being very easy to obtain - Regardless of how severe a borrowers credit history was. As long as they were able to satisfy the lender's affordability criteria and as long as there was sufficient equity within the property then more likely than not there would be a bad credit remortgage product to service the individual.

However in the wake of the Sub Prime mortgage crisis in the United States and the subsequent 'credit crunch' that has been brought about; many lenders have closed their doors to certain bad credit remortgage products narrowing the amount of bad credit borrowers that are able to obtain them. The focus within the industry today is very much on responsible lending.

All mortgage lending is based on strict set of risk assessment criteria. The general rule of thumb is quite simply that the higher the lending risk involved then the higher the interest rate applicable. Risk does not solely relate to a borrower's credit record however this does play a large part when underwriting an application. Equally important is the security offered for the mortgage - In most cases this will be the borrower's property in question. This relates to many different factors including the location of the property, housing market conditions, whether the property is situated in a high risk flood area, the condition of the property, the future saleability of the property.

A Brief Overview On Unit Trusts

2008-06-17T16:40:00.005Z

With so many different types of investments around today, each with differing levels of risk; it can be difficult when deciding which ones to choose.
On talking to a professional such as a financial adviser it is likely that you will hear names of many different types of investments being banded around without realising what they all mean.

A unit trust is one such investment type which is 'pooled' and created under a trust deed - The trust deed places certain obligations on both the manager of the unit trust and of the trustee.

When an investment is referred to as 'pooled', the meaning arises from the pooling together of investments from a large number of individual investors. A unit trust offers a way of contributing to the fund either via a lump sum, through regular contributions or a combination of the both. Each unit represents a fraction of the funds total assets.

Within the finance industry, a unit trust is referred to as 'open ended' in respect of the unit trust manager being able to create more units in response to demand.

What is the function of the unit trust manager?
A unit trust manager is obliged to buy back units from an investor wishing to sell. They will generate their profits by charging annual management fees and the actual dealing of the units themselves.

The manager is responsible for a number of different functions including:

The day-to-day managing of the trust fund.

Offering the units for sale.

Valuing and fixing the price of the units.

Purchasing the units back from the unit holder.

What is the function of the trustee?
The trustee will have an important policing role to ensure that the manager complies with the terms of the trust deed, and ultimately to ensure consumer protection. In most cases, the role of the trustee will be carried out by a clearing bank, merchant bank or life company.
The trustee will have the main responsibility of overseeing the unit trust. The trustee's main duties will include:

Holding and controlling trust assets.

Collecting and distributing income from trust assets.

Issuing unit certificates to unit trust investors.

Approving possible adverts and marketing material.

Types of unit trusts
There is a wide selection of unit trusts, many relating to the nature of their investment objectives. There are however two broad types of unit trusts being 'accumulation and distribution'.

Accumulation unit trusts
An accumulation unit trust can be particularly attractive to many higher rate tax payers who are looking for capital growth rather than income. The objective of this type of trust is simply the pursuit of capital growth. Any income received from the underlying assets is immediately poured back into the fund - resulting in an increased value for each unit.

Distribution unit trusts
This type of unit trust has an altogether different objective - they are primarily geared to produce a high level of capital growth, as well as producing a certain amount of capital growth. The income is then distributed to unit holders as dividends.

Helping a Friend or Relative With Their Mortgage

2007-10-22T13:01:00.000Z

Do you have a friend or loved one who is thinking about getting a remortgage, but is in the dark about how to proceed Do you want to help him or her make a change that will affect his or her future Then why not be the kind-hearted soul you are and help him or her with a remortgage decision Here, well look at some of the best ways you can be of assistance:

1. Offer to Do Exploratory Research

Many times, folks who are considering a remortgage dont really know where to begin with their research, even though the first step usually involves investigation into re mortgage opportunities.

As someone who cares about their friends, why not offer to do some exploratory research on various remortgage quotes via the Internet and the telephone That way, your relative or loved one wont have to take the initiative and you can pave the way.

2. Learn All You Can about the Remortgage Process

Dont assume that the person in your life considering a remortgage understands much about it. In fact, he or she may have just watched a program on TV about it or seen a quick blurb online. Therefore, you could be a wealth of knowledge.

However, youll have to learn about the remortgage loan yourself before you can be an instructor for someone else. So read up about the process, compiling a list of FAQ frequently asked question answers so youre armed and prepared for your remortgage teaching role.

3. Learn All You Can about His or Her Current Mortgage

Its tough to help someone if you dont have all the information you need. So if someone you care about is considering remortgage as a solution, its a good idea to understand what your friend or loved ones current mortgage looks like.

Check on items such as the monthly payments, the payment schedule, the interest rate, the principle paid thus far, and the present property value. All these numbers can be beneficial and will allow you to help your special someone make sound remortgage decisions.

4. Be with Him or Her When the Remortgage Deal Takes Place

Whether your relative or companion decides to use a remortgage lender online or a brick and mortar business down the street, be there with him or her during the whole process or as much of it as you can.

That way, youll hear the same thing he or she hears, youll be able to respond accordingly, and youll be able to give honest, pertinent remortgage feedback.

5. Dont Say I Told You So

Finally, if, despite your best remortgage efforts, your friend or family member decides to take out a remortgage with an organization in which you do not have confidence OR doesnt take out a remortgage after all, never say, Youre crazy. After all Ive done for you. In fact, dont turn your back on them at all. Thats the true test of a friendship or a relationship just be there for the future without passing judgment.

Getting Secured Loans Online

2007-10-17T13:48:00.000Z

Do you need a loan in a hurry If you do need money, you may want to think about getting a payday loan online. Getting secured loans is relatively easy. As long as you have a property or other forms of securities that you can use as collateral, you can already get a secured loan. When you apply for secured loans, your credit history is really not that important.

Even if you have poor credit history, most companies will still give youre a secured loan. Most companies that are offering secured loans will only check your credit rating to determine how much loans they will give you so you can breathe easy.

One of the most popular short term secured loans in the country today is the payday loan which is secured by the salary of the employee. If you are an employee and you need cash for a family emergency, you can always get secured loans using your salary as security. The good thing about getting a secured loan is that you have around 95 pecent chances of getting your money within the next 24 hours.

Getting Secured Loans Online

There are many lending institutions that are currently offering secured loans online. The good thing about applying for a secured loan online is that you will not go through the hassle of going to the office of the lending company and then wait in line just to file your loan applications. If you apply for a loan online, you simply go to the lending companys website and fill out the application forms for payday loans.

In most cases, it will just take just a few minutes to fill out all the required forms of the company. Once you are done filling up the forms, hit the submit button and then wait for an email telling you that you secured loans application have been approved. In most cases, you will receive an email about the approval of your application in just a matter of hours.

Finding The Right Lending Company

The best way for you to find the right lending company is to ask referrals from your friends and colleagues. Ask your friends and colleagues if they have tried applying for a secured loan online. If somebody has tried it before, talk to that person and ask for directions.

In the event where you cannot find anybody who could help you, you might as well just go online and find the website of a lending company that you know. Since most companies in the US are already accepting online transactions, your favourite lending company will probably accept online applications as well.

How Secure Is An Online Transaction

If you transaction with a reputable company, you can be rest assured that your transaction is safe. Always remember that you will only get scammed online if you deal with those unknown companies. Of course, Web security is always being researched and made better, so there is little to worry about anymore.

Self Employed Loans for Homebuyers

2007-10-10T09:16:00.000Z

If you’re currently renting or leasing a residence, you probably often think about how wonderful it will be to actually own a place of your own. You could finally paint the walls that shade of beige that you love, remove the shaggy carpet and replace it with laminate, and not have to worry about every scratch your cat makes in the paneling.

Additionally, it’s no secret that renters essentially throw away thousands of dollars every year without getting the benefits (such as tax breaks) afforded to homeowners. But what if you are self-employed and make only an estimated salary? What if you’re a self-described “freelancer” or consultant? Never fear! There are self certification loans geared just for you!

Self cert loans are offered by many financial institutions as a way for the self-employed (or those who cannot prove income for the past three years) to borrow funding to pay for homes or other items. After all, without official “pay stubs”, many banks and lenders will not even consider a loan application; thus, self certification loans open the door (perhaps even the FRONT door to a new home!) for persons of all ages, backgrounds, and experiences to afford their own lovely digs.

With a self-cert loan, the customer or loan requester is expected to basically “self certify” how much he or she makes annually. (Remember the “honor system” in school or with friends? It’s a similar process.) For a self-employed man or woman, this is accomplished by mathematically developing an estimate of expected income flow.

Of course, some individuals who choose the self employed loans routes also ask for the assistance of a professional accountant to help verify income amounts and expectations. This eases the burden of trying to come up with a figure themselves, and some lenders who offer self certification loans may decrease the interest rate slightly as a result. Though it costs a bit of money (professionals never work gratis!), it’s a good investment if a self certification loan is your goal.

Speaking of interest rates, interest rates accompanying such loans are notoriously higher than average interest rates. However, this is completely understandable, as self cert loans are a bit riskier for the financial institution. It’s rather like the “honor system”, and whenever such a system is put into place, there is room for chicanery.

In the end, if you’re interested in pursuing loans, don’t hesitate. Even if you’re not quite ready to move, it’s a great time to investigate self cert loans so you have all the information beforehand. The time has never been better to take out loans, and global competition has lowered rates considerably (thanks to the Internet.)

Never allow your incorrect perceptions (“I could never own a home and I’m going to be stuck as a renter forever. I don’t have any pay stubs, so no financial institution will even consider me!”) to become your reality. You CAN own a residence, whether a condo, townhouse, apartment, single family dwelling, or even house boat!

Are You Having Mortgage Problems

2007-10-08T13:01:00.000Z

If you are having problems with mortgage arrears, you know that there is no other debt that will cause so much headache, anxiety, and panic. After all, you can live without cable television, you can deal without having you nice new Toyota and just go back to driving your old Chevy, you can even live without the credit cards and the morning latte or the spa visits but you cannot live without having a roof over your head. While it is ideal to head off mortgage arrears before they happen, once you are facing them you will need to deal with them quickly and decisively.

Since the lending industry has been exploding, there are a wide variety of different kinds of lenders who are currently holding a mortgage. Arrears are treated differently by each lender. The reputable ones will gladly work with the individual borrower to see what can be done to help her or him get the mortgage arrears caught up and current, while some of the not so reputable ones will simply want to bide their time until they can sell off the paper to a foreclosing agent. Find out which category your lender falls into by giving them a call to see what they can do for you.

If your lender is willing to work with you, you may be able to go ahead and make interest only payments for a couple of months until you get back on your feet. Conversely, you may be able to extend your mortgage loan by the number of payments that you are behind. If your lender is not willing to work with you, then you will need to seek ways to supplement your income to make bring the mortgage arrears current.

While in the short run this might mean not paying other bills so as to pay your mortgage first, in the long run you may need to look at finding another job or even a second job. However, most lenders are very willing to work with the borrower. Many banks have special departments to deal with this topic alone. After all, if they work to help you, they will get paid more in the long run.

One misconception that has proven detrimental to a great many borrowers is the notion that a bankruptcy will help you to get out of your debts and keep your home. This is not the case. While you may be able to not have the home foreclosed on if you are current, you may have to give the bankruptcy trustee your homes equity.

Similarly, if you are behind in your loan or if you have liens against your property by those whom you have not paid, you will most likely have to face a foreclosure sale. Thus, a bankruptcy for the sake of bringing mortgage arrears current is not a good option.

Whenever possible, you will need to deal with mortgage arrears quickly to prevent them from building up. Stay in contact with your lender and be open to solutions even if they do not appear attractive at the time.

Cheap Secured Loan

2007-05-02T14:24:00.000Z

So you are looking for a cheap secured loan. You want something that holds the best value for you but allows you to pay the least cost possible for it.

The best way to get that cheap secured loan is to take as much time as you must to comparison shop all the options possible, and the best resource for doing so quickly, efficiently and inexpensively is through the use of the Internet. You might also enlist the help of one or two mortgage brokers to help narrow down your choices.

Cheap secured loans are generally designed especially for your own financial needs and situation. The one important thing to keep in mind, of course, is the definition of a secured loan and what that will mean for you.

To have a secured loan, nearly always the cheaper when compared with the unsecured loan, means that you must put something of value down as collateral. With larger loans this is almost inevitably your home. So, in your efforts to acquire a cheap secured loan youre going to risk losing your home.

It is very important, for that reason that you borrow only what you need and what you can pay back on the schedule agreed to. It wont do you any good to get a secured loan that is cheap only to lose the roof over your head because you did so.

A secured loan is a cheap loan as compared with a signature loan because the lender assumes less risk. That financial institution knows if you dont pay them they will have a house that they can turn around and sell to get their money back. One way or the other you will pay them.
Some of the lenders who say they offer a cheap secured loan really dont however. Their interpretation of cheap is lower cost of entry and lower interest rate.

Both may be true but if your reduced fees up front and your lower payment only mean that you make a huge balloon payment at the end or that you spend another five years paying the loan back, you end up with an allegedly cheap secured loan that is ultimately more expensive than the standard.

A cheap secured loan is generally used for a vacation, home improvements, buying a new vehicle and so forth. Some borrowers see cheap secured loans as a great way to consolidate debts from credit cards with high interest rates, paying them off and leaving themselves with one lower-interest rate cheap secured loan. A cheap secured loan in the UK is quite variable. You can borrow as little as 3000 or as much as 50,000. You can take anywhere from five to 25 years to pay it back. Much depends on how much your collateral is worth and the amount you need.

While borrowers can always walk into the various local banks and mortgage firms in their hometown the best way to look at all the options and read all the fine print - always read the fine print - is to do their hunt for their favorite cheap secured loan on the Web

Car Loans

2007-04-27T15:36:00.000Z

Getting a car loan with bad credit does not have to mean a hassle or incredibly high monthly payments. You do not have to search for one of those high priced buy here, pay here lots. Even with bad credit you can get an affordable car loan. For a lot of people having a car is very important. It is the only way they can to get where they need to go. When a borrower has bad credit, it can really put a strain on getting a car loan. It helps to know some pointers for securing a car loan with a bank that wont cost an outrageous amount.

The first thing to do when trying to secure a car loan when you have bad credit is to be honest. It is very important to tell dealers up front that you have bad credit. Also make it clear that you do want multiple credit inquires. When companies access your credit report it causes a drop in your credit score. By having too many requests your credit could be damaged further, making it harder for you to get a car loan. If you are honest with dealers up front this should avoid too many inquires as they will only go through lenders that are open to bad credit lending.

The next thing you should do is have all your documentation ready. It is likely the bank will want all financial information from you about your income sources. You should have tax returns for the previous year, especially if you are self employed. You should have two months worth of pay stubs. Try to have as much documentation as possible since this will show the bank you can afford the loan.

You also have to be reasonable. If you are wanting to buy a car with adverse credit then it is highly unlikely you will be able to get anything brand new. You should look at something at least five years old. This way the cost will be cheaper and the loan smaller, so the bank will be more likely to approve the loan.

It helps to shop around, but as mentioned, do not let your credit report get checked too many times. Shop around and talk with dealers about whether they can help someone with bad credit. T helps to know your credit score so you can be upfront and tell them exactly how bad your credit is. This way they should be able to say whether they can help or not. Additionally, shopping around helps because you will have more options in vehicles and prices. If you are a homeowner then do not forget to investigate the rates on secured loans.

Be prepared with a good down payment. If you have a trade in that helps, but you should also have a nice chunk of money to put down as well. Banks like to see borrowers put up some of their own cash towards the purchase.

Getting a car loan with bad credit is not going to be easy. You have to work a little harder then someone who has good credit. In the end, though, you should be able to find a loan. You may not be able to get the car you wanted and you may have to settle for what you can get, but once you finish paying the loan you will have improved your credit and be very likely to be able to secure a different car loan with your good credit.

Secured Loan UK

2007-04-12T16:39:00.000Z

A secured loan is one of the easiest types of loans to get. Lenders are much more likely to offer a secured loan over other types of loans because they are lower risk. So, a borrower looking for a secured loan is not likely to have to look too far. However, the ease of finding a lender may just be a bad thing. Many people forget that lenders are not created equal and when it comes to loans you have to shop around.

Getting the best secured loan UK is about shopping around. A borrower should not be so quick to accept the first offer extended to them. Doing so could be costly. Rates and fees will vary form lender to lender. When you borrower money you are not just going to have to pay back the amount you borrowed, but you have to pay back interest.

Interest is how the lenders make money. Basically they are charging you to loan you money. Interest rates are the biggest thing a borrower has to look for when shopping around for secured loans UK.

Of course, the interest rate alone is not going to be the deciding factor. A borrower has to make sure the lender will loan them the amount they need, offer a good payback term and not have demanding conditions. Some things to think about are penalties and service fees. Many lenders tack on unnecessary charges or penalties and it is very important to understand before getting a loan.

The ideal loan will have a low interest rate, no hidden fees and be for a reasonable term. The exact details of the loan are going to vary form lender to lender and with the borrower. The borrower will be very influential in the specifics of the loan.

The borrower’s credit history is going to be one the main factors used to determine the interest rate. The lower a borrowers credit score, the higher the interest rate will be. Additionally, if the borrower has credit problems then the lender is likely to impose restrictions upon the terms of the loan.

The best way for a borrower to really check out different lenders is for them to understand their own credit history and how it will influence the lenders decisions. They should approach each lender and be able to give them a general idea of their financial situation. It also helps to get quotes in writing because once the lender runs a borrowers credit they may decide to completely change the deal.

Working with a lender can be challenging. Lenders are out to make money off lending money. The bottom line is they want to see how much they can make off the loan. Besides wanting a borrower who will pay back the loan, they want a borrower who is willing to pay fees and interest. A smart shopper will be someone who can get the lender to take a pay cut and get a secured loan UK that is affordable and fair.

Secured Loans

2007-04-11T13:19:00.000Z

Secured loans are loans that a borrower secures with collateral. Collateral is something that the lender can seize to use to pay off the debt should the borrower default. Lenders prefer secured loans since there is some safeguard that no matter what they will get at least part of their money.

The two most commonly recognized secured loans are home loans and auto loans. In both cases the loan is secured with the item being purchased. Should the borrower fail to pay the lender will take ownership of the home or auto and then resell it to recoup their money.

Getting a secured loan is much easier because the lender does not have to assume as much risk as with an unsecured loan. They will still check credit reports and require borrowers to meet certain criteria; however, the whole process is much easier than with an unsecured loan.

Lenders also like secured loans because the borrower has something at risk too. Instead of the lender assuming all the risk, the borrower now shares in that risk and so they are more likely to honour the contract. The borrower is fully aware should they default that they are at risk for losing their collateral.

Also if you suffer from credit problems, such as county court judgements, bankruptcy and defaults then it is a lot more difficult to obtain unsecured credit. But as said previously with a secured loan the lender has security and will be more willing to lend on this basis. The same is true if you are self employed and have trouble proving your income.

Secured loans can be obtained for any purpose. However, as mentioned home loans and auto loans are the most common. These things, though, can be used as collateral for other loans. With homes, they build equity, which is essentially the value of the home minus what is still owed on it.

Homes go up in value over time, so home owners can borrow against their equity. This is still using their home as collateral. Autos on the other hand depreciate, or go down in value as time goes on so they are usually not acceptable for use as collateral except for the case of an auto loan.

Other things can be used such as investment moneys, expensive jewellery and other things of value, as long as the value meets or exceeds the value of the loan and the item is not going to go down in value.

People get secured loans for many reasons. They get them to make home improvements, consolidate debts and buy new items. As long as the loan is secured with collateral and the borrower pays according to the contract, the secured loan is a great resource.

Secured loans can be risky for borrowers, but they are also good because they are easier to get. However, the borrower must always keep in mind that they have risk involved in a secure loan.
Lenders are not hesitant to take collateral should the borrower default. As long as a borrower intends on honouring the contract then there should be no problem with a secured loan.

Second Charges And Second Charge Loans

2007-04-05T11:04:00.000Z

Many secured loan providers will not be prepared to lend money against a property as a third charge, following a first and second mortgage - Hence why these types of secured loans are often referred to as second charges.

A second charge is another term for a secured loan, or second mortgage. Any first mortgage or subsequent secured loan will be arranged by way of a legal charge that is secured against a property. On completion of a second charge loan, the lenders solicitor will make arrangements for the charge to be registered at the land registry department, following that of your first mortgage.

It is perhaps a common misconception by many borrowers that as long as the repayments on a first mortgage are kept up to date, their property is not at risk from being repossessed following missed payments on a second charge loan - This is in no way true. A second charges provider will pursue court action, and ultimately possession of your property subject to the Court order being granted, if you do not keep up your repayments on time.

In the event that a property is repossessed and subsequently sold; the proceeds from the sale will firstly be used to pay off the outstanding first mortgage and then the balance of any further charges, in order of registration at the land registry - Any funds left over will go to the borrower.

Second charges exist within the finance industry as a flexible and viable capital raising option for many homeowners. They can offer a fast solution to a borrowers finance needs and can be used for any purpose. In most cases, loan sizes are made available from 5,000 to 100,000 over terms ranging from 5 years up to 30 years.

The appeal of a second charge loan to many borrowers is the speed in which the finance can be arranged, the competitive rates of interest on offer, the minimal charges applied on early redemption, the accessibility and flexibility. For those borrowers with a poor credit history or limited proof of income; the lenders security over the property can result in a more accessible route to their finance requirements.

Credit Card Consolidation - Do It Today And Save Thousands

2007-04-04T20:13:00.000Z

Credit cards are of the top reasons for credit problems and debt. Credit cards can be easy to abuse and the debt form credit cards can easily get out of hand due t the high interest rates and fees associated with them. That is why credit card consolidation is a handy thing to understand.
There are two main ways to handle credit card consolidation. You can either find one card to transfer all debt to, thereby paying off all other cards or you can get a consolidation loan to pay off all cards.

When using one card to carry all the debt it is essential to understand the risk. You will want a card with the lowest rates and fees or else you will simply be building up more debt which in the long run could cause even bigger problems. You may have to search out an entirely new credit card in order to get rates that are reasonable. The risk with this, though, is to avoid introductory rates that will go up in time.

You should also take advantage of free balance transfers. Many credit cards offer no fees on transferring balances. However, watch for hidden charges here too. The most important thing about consolidating credit debt to one credit card is doing the math and ensuring it will not end up costing more in the long run.

A safer alternative is getting a consolidation loan. You get a loan to pay off all credit card debt. This leaves you with just the loan payment. The benefits of doing it this way are that these loans often carry much lower interest rates are not as many fees. They can be difficult to get, though, if you are having credit problems. Even though they are cheaper it is still wise to shop around and look for the best deal possible.

If you are a homeowner with equity in your property then a secured loan can provide a quick and cheap way to consolidate your debts. You will be able to use the available equity in your home in order to clear off your credit card debt. You can spread the payments out for up to 30 years, this means that you can achieve an affordable monthly payment and secure a lower rate than you were paying on your credit cards.

No matter which method you use you have to understand that you are still going to be paying financing charges. You have to make the right choice or you are going to end up with even more debt than you started with.

Sometimes it can be helpful to seek advice form a financial expert who may be able to suggest alternatives or help you formulate a repayment plan. They can also point you towards lenders who can give you a good deal on consolidation loans.

Credit card consolidation is almost essential when you have racked up a large amount of credit card debt. With their high rates and fees paying off a credit card can take years. That is why wiping out too much debt can be very beneficial. You just have to do it in a smart manner that ensures you are really doing the best thing for your finances.

What Is A Loan With No Credit Search?

2007-04-03T16:35:00.000Z

For someone with bad credit, getting a loan can seem impossible. There are no credit check loans out there, though, that can help a person who has bad credit get the money they need.
However, finding a no credit check loan is not easy. Additionally, there are plenty of scams out there regarding no credit check loans. Before you decide to sign for a no credit check loan, you should get to know more about them.

A no credit check loan may seem ideal. If the lender does not check your credit then they will never know you are a liability. Of course, the lender is well aware of the risk they are taking. That is why most no credit check loans are set up as if every borrower has bad credit. The loans come with high interest rates and many times require a co-signer.

Lenders are aware that by not checking credit they are likely going to get applicants who have bad credit. People with good credit would just go get a traditional loan because the terms of the loan are better. With a no credit check loan the bank is going to set the terms to be high interest and usually a short payback time.

They may also bee especially critical of your finances, including how much income you make per month and your average monthly expenses. They are wanting to make sure that you could afford the loan payment.

One of the most popular no credit check loans is a payday loan. This type of loan is a short term loan, usually no more than two weeks. It is basically an advance of your paycheck. The lender will look over your recent pay stubs to determine the amount of the loan. With these loans, though, the interest rate is typically very high, much more so then with a traditional loan.

When you are shopping for a no credit check loan it is important to look at a few different places. Shop around and try to find the lowest interest rate and the best terms. Dont just settle for the first lender that offers you a loan. It is important to keep in mind that the higher the interest rate, the more you will pay back in the end.

No credit check loans can be a lifesaver for someone who needs extra money, but has bad credit. They are not a good idea for someone who has good credit, as the alternatives are much better. A loan with no credit check should be used responsibly and handled as you would any other extension of credit.

Always read all the information given to you by the lender to ensure you completely understand the loan terms. No credit check loans often have many fees associated with them, along with the high interest rate. You do not want to end up paying too much for your loan.

Fast Remortgage

2007-02-22T18:03:00.000Z

Click Here To Remortgage Fast

We live in a fast paced society where peoples need to have instant gratification is prevalent. Whether it is instant access to download music at the click of a button or a 2 minute microwaved dinner, people what their goods and services instantly or they go elsewhere or lose interest and move on.

Managing your personal finances is also heading this way. Banks and lenders are at the cutting edge of technology offering sophisticated online banking, automated telephone banking and the ability to arrange mortgages and loans without leaving your house. All of this is making managing your finances a lot easier and quicker whilst making personal finance more accessible to the masses.

Consumers need for speed has also spread through to the remortgage process, a process that traditionally could take up to two months before the funds clear. But the lenders use of technology and desire to give the customers what they want has meant that this process has now been cut right down and a remortgage can complete in a matter of weeks.

One of the easiest and simplest ways to save money is to remortgage to get yourself a better interest rate. But in years gone by when you needed to free up some cash quickly a remortgage would not have been the fastest option. This is no longer true, remortgaging to another lender or product can provide you with a quick way to raise money. Although depending on your circumstances you maybe liable for an early repayment charge, which is a penalty for breaking the deal with your mortgage lender.

Click Here To Remortgage Fast

The recent developments in technology have seen the increased usage of automated valuation systems or AVMs in the mortgage application process, which means that almost instant offers are now available.

AVMs utilise electronically stored data about house prices so valuations can be carried out in real time as opposed to having to send someone out physically to carry out a valuation. This means that cases can now be completed in a matter of weeks or less.

For those cases where an AVM can not be used it will automatically instruct a physical valuation and automate the whole process save lots of time and administration costs.

This is great news for those borrowers that need a fast remortgage. With all those Christmas debts to pay off and the sharp hike in interest rates many homeowners have fallen into debt.
With many homeowners failing to keep up with their mortgage payments and sinking further into debt a remortgage is a great solution to pay off any outstanding debts, clear arrears and switch to a new lender for a better deal. Now all of this can be done very quickly, in a matter of weeks. This is great as it stops the homeowner falling further into debt and facing the prospect of repossession.

If AVMs are adopted by more lenders at the start of the application then you will be able to remortgage to a deal of your choice in a matter of days.

But don’t forget to make sure that remortgaging is your best option, as sometimes a further advance or secured loans will be more cost effective. Speak to your mortgage broker before you decide.

Related Links: Adverse Credit Remortgage Mortgage Arrears Commercial Remortgage

Buy to Let Schemes

2007-02-22T09:43:00.000Z

Buy to let schemes have become increasingly popular in the last few years and many mortgage lenders are now more than happy to finance a buy to let mortgage on most sound investment properties. This is due mainly to an increasing number of people wishing to take advantage of the continuing rise in property prices and the shortage of property for rent in the private sector.

To the potential buy to let investor, the prospect of rental income and a possible capital gain on disposal of the property is an extremely enticing one. This factor coupled with poor stock market performance in recent years has added to the property investment boom.

The fierce competition in the marketplace has now meant that the rates have become almost comparable to that of owner occupier mortgages. Traditionally interest rates have been higher for buy to let schemes and although this is still the case; the gap has significantly reduced in recent years making these schemes evermore viable for investors. A buy to let mortgage presents a greater risk to the lender because:

# There is no guarantee as to the consistent availability of tenants. Any periods during which no rental income is being received will affect the borrower’s ability to keep up the monthly repayments.

# The borrower may adapt a different attitude to the buy to let mortgage than if the property were his own.

# The value and saleability of the property may be adversely affected if it is badly treated by tenants and not maintained properly by the landlord/borrower.

Many buy to let mortgages are now available on a fixed or discounted rate. The terms and conditions of the mortgage will be similar to those of a conventional mortgage. They will usually contain a lender’s arrangement fee and an early repayment charge.

The main difference when applying for a buy to let mortgage, to that of a conventional mortgage, is the method of deciding suitable affordability/deciding how much to lend the applicant. The amount of the permitted advance is usually calculated on the basis of the expected monthly rental income being around 125% of the monthly payment of the loan – This is as opposed to using income multiples.

It is possible to arrange buy to let mortgages for up to 80% of the property value. The investor must first ensure that the rental income would cover the mortgage repayments and also the running costs.

The lender will ensure that a suitable form of tenancy agreement is used so that it is not prevented from obtaining a possession order in the event of default.

Potential buy to let investors will need to consider the following points:

# The location of the property. This is a very important consideration as different areas will have different demands for rental property. There are areas around the country where there is an abundance of property for rent, and not enough potential tenants to match the supply. On the flip side of course, there are hotspots around the country with limited rental properties available, which could produce a higher rental yield by investing there.

# The type of property. Many investors believe that one bedroom flats are easier to rent out than two bedroom flats. They will appeal to a range of tenants from couples to single professionals. It is important in this case to research the different areas to see where the demand lies.

# Property management. Often buy to let investors will use the services of a letting agent. The services of a letting agent will include sourcing and qualifying tenants along with the maintenance of the property. The letting agents will charge a fee for there services and this must be taken into account when working out the rental yield. The fee is usually worked out as a percentage of the rental income.

# The type of tenancy. An assured short-hold tenancy is the most effective lease. This will allow the landlord the right to take possession of the property at the end of the lease.

Along with the initial planning requirements, it is also necessary to consider the potential disadvantages associated with buy to let investment:

# The quality of the tenant can never be guaranteed.
# The availability of tenants again, cannot be guaranteed.
# House prices can fall as well as rise.
# Regular investment must be made as fixtures and fittings will be subject to wear and tear.
# Property is not a liquid asset. If the investor wishes to realise his capital, this cannot be done without first selling it.

Beacon Homeloans Mortgages Kensington Mortgages Rooftop Mortgages Platform Mortgages

Mortgage Regulation

2007-02-22T09:30:00.000Z

Since 31st October the sale of mortgages has been overseen by the Financial Services Authority. Prior to this time, regulation was undertaken on a voluntary basis under the terms of the Mortgage Code. The Mortgage Code was a code of practice which was established by the council of Mortgage Lenders (CML) and overseen by the Mortgage Code Compliance Board.

The role of the FSA is to oversee the regulation of the financial service industry in the UK and which incorporates most of the mortgage market. The FSA and the subsequent regulation brought forward have essentially come about by the need to offer a more efficient safety net for consumers.

Anyone who wishes to sell mortgages, whether they are estate agents or mortgage brokers, must be directly authorised by the FSA or must become part of an FSA authorised network.
Under the FSA regulatory regime there is a very important distinction between information and advice sales. The sales process must distinguish between on one hand cases where advice is given; and on the other hand those where information is given and a series of pre-determined questions are used in order to act as a filter through which a client can narrow down the selection of mortgages.

If you proceed with an information only sale then you will receive solely information about that particular product or range of products – no advice or recommendation will be included. An information only sale is usually only suitable for borrowers who are certain of the type of mortgage that they require. Only individuals who proceed with an advice-based sale can seek redress through the Financial Ombudsman service.

The scheme is designed as a safety net for borrowers which aim to offer compensation when financial firms go bust. In addition borrowers will be able to take their complaint to the Financial Ombudsman Service (FOS) The Financial Services Compensation Scheme in relation to Mortgage advice and arranging will cover the following:

# Claims against firms involved in mortgage advice and arranging: 100% of the first £30,000, plus 90% of the next £20,000. (A maximum total of £48,000).

Where an advised sale takes place, it must be based not only on a consideration of which mortgage best suits the client’s needs, but also on the affordability of the scheme for that client - An increasingly important factor which must be considered in an effort to stem irresponsible lending.

At all points of regulated mortgage sale, borrowers will now receive a ‘Key Facts’ document. This summary document outlines the key features of the mortgage product which will include:

# The fees and costs associated with setting up the mortgage.
# The interest rate applicable and monthly mortgage payment amounts.
# The commission payable to the seller from the mortgage lender in the event of mortgage completion.
# The overall cost of the mortgage for every pound repaid.
# Early Repayment charges (if applicable).
# Overpayment charges (if applicable).
# Any additional features - such as a cash back special offer.

For the borrower, The Key Facts (KFI) document primarily acts a tool to compare different mortgage products on the market. It also aims to make the overall process of shopping around more transparent.

It must be understood that not all mortgage contracts are covered under the watchful eye of the Financial Services Authority. For example, Buy to let commercial mortgages are not covered unless 40% of the property (including the land) is being used as a residence by the borrower or a direct family member.

Key Changes

A "Key Facts" document summarises details and allow consumers to compare mortgages easily Price information in any advertising and marketing material must be clear Both the pros and cons of the mortgage deal must be given in any advertsWhere advice is given, firms must ensure consumers are given a "suitable" mortgage.

Both lenders and advisers have to consider whether consumers can afford the mortgage if factors, such as, interest rates changed Charges must not be excessive.

New standards are being introduced to improve the treatment of consumers with payment difficulties or facing repossessionAdvisers must undertake specialist training.

This is aimed at helping people shop around and making the process more transparent. Salesmen are required to disclose any commissions they are getting and, whether they deal with the whole market or just one lender.

At the point of all sales, consumers now receive a summary document which illustrates the key features of the mortgage, known as a "Key Facts" document. This is aimed at helping people shop around and making the process more transparent.

GMAC RFC Chelsea Building Society Firstplus Loans Endeavour Personal Finance