Wonga under the spotlight again

Some say any press is good press. And that must be the belief of Wonga founder Errol Damelin. After exposure on Watchdog in September for not identifying fraudulent applications and the result it had on innocent victims, the spotlight continues to shine.
Consumer advice website Money Saving Expert challenged their claim that “repaying your Wonga loan does wonders for your credit rating” – and rightfully so. At Harvey Bowes we have not seen too many credit reports where clients have used Payday loans, but where we have, every client has repaid the initial amount back within the month, but had to approach the Payday loan again the following month. And this happens month after month once in the cycle, meaning massive interest costs, but also many credit searches which reduces one’s credit score.
On the 22nd November the Guardian reported that Wonga were forced to apologise to MP Stella Creasy over abusive tweets.
Again on the 24th more articles appeared about the relentless chasing of innocent victims of fraud, as Wonga pursued them for loans they had not taken out.
Wonga can’t really hit back so they talk to The Sun about a desire to arrange Wonga Mortgages. A great diversion but who could really pay back a Wonga interest rate on such a big loan?
But the last laugh will hopefully come from the regulator. After a surprise vote in the House of Lords, the Government will now give the new regulator powers to cap the interest rates charged by payday lenders, which may determine the end of 4000% interest rates!
So called Payday loans may seem like a great solution to a short term need for cash, but the interest rate is so extortionate that borrowers should consider all options (including whether such a loan is absolutely vital) before taking one. The issue experienced by many is that repayment of the loan and the huge interest costs leave them short of cash when trying to make repayments. Payday loans are normally repaid on the borrowers ‘payday’. But if someone has to repay in one go a large amount of money to repay their Wonga loan, then they leave a whole in next months cash flow and need to approach again for another loan.

A one-stop Bridging Buy to Let

Dragonfly Property Finance has launched a combined short and medium term loan, branded as ‘bridge-to-let’

This innovative finance solution offers a competitive bridging loan up to 70% Loan to Value for the first 7 months followed by a two or three year fixed rate mortgage.

Borrowers can either redeem the loan free of penalties within the seven-month bridge period or they can switch on to Dragonfly’s two or three year medium term loan.

Who will this loan appeal to? The minimum loan size is £1m, which does limit the market place to those looking at substantial loans for larger properties. Any property investors looking to purchase properties needing renovation or adjustments to title in order to secure to standard BTL mortgage (or HMO) should look at this product as an alternative to a two stage approach, having a bridging loan for the purchase and exit the bridge with an ‘off the shelf’ or commercial buy to let loan thereafter.

The key advantage is that there is only one process of underwriting and the exit route onto the BTL mortgage is clearly defined.

This means there is no further underwriting needed or additional documentation. Which in turn will assist in costing the deal accurately including the cost of borrowing from the start, as well as the peace of mind of a clearly defined longer term finance deal and the potential reduced costs typically associated with exiting a bridge and starting a new loan.

To find out more about bridging loans or commercial finance, please contact Howard Bowes from Harvey Bowes mortgages on 029 2115 6918

Your property may be repossessed if you do not keep up repayments on your mortgage

More big changes to Interest Only mortgages

Interest only mortgage harvey bowes mortgage broker cardiffCoventry Building Society and Natwest / RBS are the latest lender to withdraw from offering Interest Only mortgages to new borrowers. This applies only to residential mortgages, with Buy to Let still being available on either an interest only or repayment basis.

Many lenders have significantly changed their approach to interest only throughout 2012 and it is likely that changes will continue. It is just a few weeks since Nationwide announced they are no longer offering interest only mortgages to new borrowers and just a few months since most of the mainstream lenders made changes which certainly reduce the amount of interest only loans they will accept.

Is this the end of Interest Only?

Certainly not for now, but the future of interest only mortgages on residential properties does seem to be in question. At the same time, Santander announced an adjustment to its Interest Only criteria raising the acceptable loan to value from 50% to 75%. The amount of the loan that is above 50% must be on a repayment basis, however this is a positive step. It also demonstrates that there are still lenders out there with a more open view of interest only.

Aldermore will lend up to 80% on interest only provided there is a suitable plan for repaying the mortgage at the end of the term and there is still a choice of competitive lenders offering 75% loan to value, which includes Virgin Money, Woolwich / Barclays, Clydesdale, Accord / Yorkshire Building Society to name just a few.

HB_gears_003With of the aforementioned lenders, the criteria differs slightly as to what is acceptable as a means of repaying an interest only mortgage. Some will accept sale of the property at the end of the term provided there is going to be sufficient equity to make this realistic.

The need to use an expert to help with the minefield of the modern mortgage market is ever more clear to many homeowners. In many circumstances, a family’s home is the biggest asset they own and also the most costly. Talking to a professional mortgage broker is more important than ever.

To find out more information on Interest Only loans, use the search facility at the top of this blog page to bring up all of our recent Interest Only articles.

Are you looking for advice on an interest only or repayment mortgage, please contact the team at Harvey Bowes today on 029 2115 6918 or email theteam@harveybowes.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage 

Mortgage Lending Levels hit highest level since January

According to the latest Bank of England lending report, mortgage approvals rose again in October to 29,358 and the number of loans for property purchases went up to 52,982.

The total value of the loans increased slightly from £12 billion to £12.1 billion.

Remortgage approvals also increased to 29,358, significantly above the previous six-month average of 27,602, and new house purchases and remortgage levels increased for the third consecutive month.

What does this mean for the market place? Typically January sees a lot of activity for a variety of reasons and the remortgage market sees a comparative spike compared with other months of the year. It is therefore seen as a ‘peak’ month in the mortgage market. The market has also experienced a lull over the Olympic period which has probably filtered through during the months afterwards. Although this is likely the situation, it is still  a positive sign as the market is moving nevertheless.

To find out how you can benefit from reviewing your mortgage – or if you are looking to purchase a home, contact the team at Harvey Bowes on 029 2115 6918

Your home is at risk if you do not keep up repayments on your mortgage

NAEA – Estate Agent licensing is launched

A licence for estate agents has been introduced by the National Association of Estate Agents (NAEA) for the first time in a major push to raise standards in the industry.

The licence has been launched by the National Association of Estate Agents, who state that more must be done to protect consumers from unprofessional agents.

A licensed estate agency branch means consumers are guaranteed that at least one agent within that branch is qualified in residential property sales, either through a formal qualification or through length of service in the industry.

Currently, there is no restriction to anyone setting up and practising as an estate agent, whether they have industry experience or not. This new licence is not a legal requirement, which means that it is purely optional for an agency to join.

Therefore, while it is a positive step to have such a qualification available to the reputable agents who wish to substantiate their professionalism by obtaining the licence, it will fall on consumers to be educated that it is available and to choose whether this makes a difference in the agency they will choose to use for selling their home.

Many agencies, in these difficult times, may opt not to be licenced purely on a basis of cost. And the same applies for the rental market, where many letting agents are not members of any association (such as ARLA) which offers a code of conduct to adhere to in an effort to ensure there is a quality service to consumers.

Take a look at our blog for top tips on choosing an agent to sell your home.

Top tips on choosing an estate agent to sell your home

There are many agencies offering competitive services. From the online agencies to the independents and the corporate giants. The question is, in a tough market, how will you find an Estate Agent that will work hard to sell your property and give you good advice?

Firstly, some key points to be aware of:

1)      To win an instruction to sell your home, an agent may ‘high ball’ you. This is one of the terms used for persuading you that they can get a higher price for your property than even they think is realistic. The idea is just to win your instruction and while in the sale contract they will try to then persuade you to reduce the price. Certainly the corporate agencies specifically target staff to win instructions and then at a pre-defined time, maybe 4, 5 or 6 weeks later target them on getting a price reduction on your property. This may sound ridiculous, but I can assure you, having lasted a whole 3 months (I couldn’t take anymore of the tricks) working as a mortgage broker for a major corporate I watched this happening first hand.

2)      Agency fees are typically quite high. But so are the costs of selling your home. Rightmove alone is a costly form of advertising. Then there is advertising in local papers and other media. Time has to be paid for, in terms of accompanied viewings of your property etc. The thing to watch with fees is that some agents quote it as a percentage, but the sale contract you sign states a set fee. So if you take a reduction on your asking price, you’ll still pay the same fee to the agent as if you sold at full asking price. From our experience, not too many agencies try this one, but it is a trick of the trade to look out for nevertheless. The advantage of making sure you paying a percent of the house price and not a set fee is that it should encourage the agent to work that little harder to achieve the best price as it is also in their interest to do so.

3)      VAT – you should make sure you factor in the VAT at 20% (currently) on the agency fee quoted. The fee is often a percentage of the sale price plus VAT.  And if the agent you are using is not VAT registered, they cannot be selling a lot of properties, so beware! A savings of 20% of the fee is usually comparatively small compared with the value of a home – is it worth it to have a sleepy agency?

4)      Media advertising is key to selling a property in the modern age. Make sure the agent you choose is active on Rightmove, Zoopla and other online advertising tools. These generate significant enquiries – yet because of cost, some agents will only be active on one or the other. Yet the fees you may pay the agent will be similar to another agent who is active on all of them.

How to find a good estate agency

Top tips for finding the right agency:

1)      Look at their website and other advertising. What is the quality of the property descriptions and clarity of pictures? You can then gauge what your property might look like advertised by the agency.

2)      Do they advertise on all available property websites, especially the big ones like Rightmove and Zoopla. Do they also advertise in the property section of the local newspaper or house-sale magazine? If not, you’d hope the cost of selling through them would be less to reflect a lesser service.

3)      Mystery call them. It might sound bizarre, or a little frightening. If you are worried about it, get someone you know to call them up and ask about a property they have for sale. Do they have time to speak to you? Do they ask the right questions to ensure they are offering you the right type of property? This is a real-time gauge as to how hard they really work to sell properties and how well they know the properties they are selling. You might also try emailing them and see how long it takes them to respond.

4)      When they come to see you and assess your property, do they offer you advice on how to make it appear more appealing? Do they genuinely take an interest in the property and in any quirks or good selling points?

5)      Ask them for recent comparisons of properties they have sold in your area and price band. Then check it out on a website like Zoopla or Nethouseprices to confirm what those houses sold for.

6)      Code of conduct – are they members of an association such as the NAEA which encourages professionalism. You do not need any skill, experience or qualifications to set up an estate agent.

7)      Look at what instructions they currently have. Do the prices compare with similar properties online? How long have the properties been advertised for?

What questions to ask when they visit:

 

1)       How many similar properties have they sold? At what price?

2)       How many viewings and how long did it take to sell the properties?

3)       How many buyers are on their database currently looking for properties like yours?

4)       Are they a member of a professional body?

5)       What price would they market your property for? What house price would they expect you to get? What price would they value your home for a ‘quick sale’?

6)       Who will do the property viewings with interested parties?

7)       Can you have a copy of the agency’s contract?

8)       How and where will they promote your property? Which property websites will the property be advertised on?

9)       What are its charges (a full break down) – and when do you have to pay?

Do you want to know more?

If you are currently looking to sell your property, why not talk to Harvey Bowes today? We may be able to offer you more sound advice on selling your property and would be delighted to give any mortgage advice you may need. Contact us today on 029 2115 6918.

Another great deal from Santander – available for 7 days only

Another great deal from Santander – available for 7 days only

Santander have launched another highly competitive fixed rate deal for a limited payment only. The offer is at 2.89% (The overall cost for comparison is 3.9% APR)

This deal benefits from free valuation for both remortgages and purchases. There is a £995 fee that can be added to the balance and £250 contribution towards legal costs. Early repayment charges apply.

If you are looking at a repayment or interest only mortgage, Santander prove to be a good lender to consider. For those looking for interest only they prove have a flexible approach up to 75% loan to value providing there is a clear and acceptable repayment strategy. While may landers including Natwest, Coventry Building Society and Nationwide have recently withdrawn altogether from residential interest only mortgages, Santander have slightly relaxed criteria.

To find out if your qualify for this deal, or to review your current mortgage, contact Howard or Rachel from Harvey Bowes mortgages today on 029 2115 6918.

Your home is at risk if you do not keep up repayments on your mortgage

Lenders are lending!

Nationwide has reported a 15% increase in mortgage lending year on year. The new lending for six months ending 30th September is reported to be £10.2 billion. Out of this, £2.5bn was leant to first time buyers, which is double the figure of the previous year.

Nationwide has benefitted from £509m from the Governments’ Funding for Lending scheme and has reduced the deal rates for new mortgage borrowers as a result.

Another positive sign for the market is Nationwide’s announcement that they intend to start lending to SME’s from 2014.

Nationwide has also expressed an interest in the 316 branches of Royal Bank of Scotland which are currently seeking a buyer. Since it’s bail out in 2008 RBS has been ordered to sell, a deal was on the table from Santander but current reports state that they have pulled out. Virgin Money and JC Flowers are also reported to have an interest.

As a broker, it is reassuring to see even small steps in the right direction. And Nationwide does appear to have an ambitious plan for the future. To discuss your requirements with one of the team at Harvey Bowes mortgages, please call us on 029 2115 6918.

Your home may be repossessed if you do not keep up repayments on your mortgage

Buying your council home ~~ council right to buy

There is nothing like owning your own home. If you currently rent a home from a housing association, charity or local authority; they may consider selling the house to you at a discount. This process is known as ‘Right to Buy’. Normally the discount is based on how many years you have lived there, or at least with the same association even if not in the same property. This may be a great opportunity to buy your home, as you may be eligible for a discount on the property which is enough for the mortgage lender to take that discount as the deposit – meaning that you able to buy the property without finding money from your own resources to put down.

Normally, a tenant of this type of property only becomes eligible to apply to purchase the property if you have lived there for 5 years. With some housing associations and councils, you have to be a tenant for a minimum of 5 years, but it does not necessarily have to be in that house or flat – so if you have moved, the discount you have built up can still apply. The longer you have lived there, the more discount you can normally qualify for.

What are the first steps?

If you want to buy your home by way of a ‘Right to Buy’ mortgage, it is best to find out from your council or housing association if you are eligible. But before making an application to them, you should contact a mortgage broker to discuss the mortgage. This is because buying your home is a big committment, you have to be sure you can afford to buy it and that you are comfortable affording the mortgage payments. Your mortgage broker can also assess the viability if getting a mortgage and talk you though all of the steps involved. To do this, you will need to show your mortgage broker details of your outgoings and income.right to buy mortgage broker cardiff

After meeting your mortgage broker, if you are happy to enquire further, you can then ask the council or housing association for the relevant application form. If needed, you can ask your mortgage broker for help completing the forms – we see them frequently, but for you it may all be new. The council will then send a valuer around to find out what they think the value of the property is. They will let you know the value and the discount that they are willing to apply. If the discount is enough, you may not need to find any deposit to buy the property.

At this point, if you still want to proceed, your mortgage broker will make a formal mortgage recommendation and apply for the mortgage to the lender on your behalf. This will mean gathering all the required information from you and managing the process. Once the application is complete and a ‘mortgage offer’ is issued by the lender, you can then look to complete the transaction and own the home. There will also be two solicitors involved, one acting for the seller (council or association) and one for you. If you do not know a solicitor, your mortgage broker can recommend one.

Typically, for arranging a Right to Buy mortgage, Harvey Bowes will charge a fee of £600 or 1% of the balance borrowed, whichever is greater. All fees are always quoted up front and even if we have to do more work, we do not increase the fee we quoted at the start. This fee only applies if you proceed with the mortgage, so you will not pay a fee for all the advice your mortgage broker gives you to at the beginning.

To find out more about buying your home, contact Howard or Rachel at Harvey Bowes mortgages: 029 2115 6918

Think carefully before securing other debts against your home. Your home may be
repossessed if you do not keep up repayments on your mortgage

Advice for tenants & landlords as we approach cold winter months

As a tenant in a rented property it is your responsibility to make sure the pipes do not freeze and cause any short or long term damage. Speaking to Aaron Barker of Gordoon Barker lettings, his advice is to ensure that you have the heating on constantly, through the winter, albeit on a low level for the majority of the time and then increase the temperature when you feel the need. When pipes freeze they can cause a lot of damage and it can be a very expensive exercise to put it right, so ensure there is hot water flowing through the pipes on a regular basis.

The same applies to a landlord with properties that are empty over the winter period. Please ensure you have the heating on, at the very least, a couple of times a day to ensure there is hot water flowing through on a regular basis. Otherwise the first you might know about a frozen pipe is when your agent turns up for a viewing and swims down the hallway…

Contribution by Aaron Barker, Gordon Barker Lettings of Bournemouth.