Mortgages – new products

Well, the promised new rates are out and there are some great products available.

It depends a bit on how you view the future, but I think I’ve said before that whatever product you choose mark it in two ways.

1. Compare the product against it’s peers. So, if you really want a 2 year fixed rate, look at all the two year fixed rates.

Compare the interest rate and the fees to get an idea of the best deal over the 2 years.

Then – look at what happens next – does it return to a variable rate, or a tracker and at what rate?  Whichever – I favour trackers in this instance, but the range of ‘follow on rates’ is 3% with the best lender to 5.34% with one of the worst…there may be worse available.

Anyway, the point is this – in 2 years, if your house has fallen in value, or remortgages are just not available anymore, of only with massive fees, you’ll be glad to be on a good variable rate.

Of course, that’s a worst case scenario, but better safe than sorry.

Complaint to Richard Branson

This is hilarious

No light yet, but a mortgages are getting cheaper

It’s with interest that I note that GDP is the worst for 30 years.   The recession mentioned all the time is the one in the late 80’s/early 1990’s, but this measure takes us back to the Winter of Discontent.

It’s interesting to note that in 1979, the labour leader got a vote of no confidence and lost the ensuing general election.

You don’t sense that Gordon has lost the trust of the people yet, nor his party, which probably says more about the opposition than him -  consider a different scenario say = John Major in power, Tony Blair in opposition – you sense that Tony would be giving John a mauling.

Anyway – how about some good news? Well, I can offer potential good news on the mortgage front – I had a flurry of e-mails last week with news that on monday there will be new products on the market. I haven’t judged the hype – they are all saying wonderful things, but too often a drop of 0.25% on a product is cancelled out by a bigger booking fee or something.

So, I await my Monday software update to see the true winners and losers.

Best wishes

Adrian

Interesting article about the credit crisis

From Russia today – I’m not sure how credible it is, but it’s an interesting perspective and it’s sadly easy to see some of it turning out to be true.

Russia Today

Obama

I’m hopeful he’ll get to be able to do the things he wants to do but I’m worried that he will be powerless against the machine.

Mind you, if the machine is that powerful, it didn’t raise Bush’s game, so perhaps I should be more optimistic.

So, plus points:

He is aware of the existance of countries outside the USA

He is aware of life without a silver spoon.

He got into university on merit, not becuase his dad was a senator.

I get the impression he is less gung ho than Bush.

So, all those are pretty good things and although instinctively I am not on his side of the political fence, I think he is far superior to McCain/Palin for the USA and the rest of the world. Much as I felt Blair was needed at the end of the Conservative years. Lets hope Obama is better than he turned out to be.

I’m a bit concerned about UK banking shares though – presumably that’s more to do with disappointment at Gordon’s latest ideas that Obama’s inauguration.

Anyway, there’s the obligatory Obama post!

Names in your mobile phone…

This lady has changed her habit of how she lists her names on her cell phone after her handbag was stolen.  Her handbag, which contained her cell phone, credit card, wallet… etc…was stolen.  20 minutes later when she called her hubby, from a pay phone telling him what had happened, hubby says ‘I received your text asking about our Pin number and I replied a  little while ago.’

When they rushed down to the bank, the bank staff told them
all the money was already withdrawn.
The thief had actually used the stolen cell phone to text
‘hubby’ in the contact list and got hold of the pin number.  Within 20
minutes he had withdrawn all the money from their bank account.

Moral of the lesson: Do not disclose the relationship between you and the people in your contact list.  Avoid using names like Home, Honey, Hubby, Sweetheart, Dad , Mom, etc…..  And very importantly, when sensitive info is being asked through texts, CONFIRM by calling back!!

Also, when you’re being text by friends or family to meet them somewhere, be sure to call back to confirm that the message came from them..  If you don’t reach them, be very careful about going places to meet ‘family and friends’ who text you.

Along with that if you have an entry called ‘Home’ with your actual home phone number, it’s not too hard to do a reverse lookup on the number to find the address.  Now the robber has your home number, keys, AND address.  If you the the entry of ‘Home’ in your phone, you may want to consider changing that to something else.

I never thought about THAT

Good news for Mortgage Brokers

Here you get to see a bit of the ‘behind the scenes’ world of mortgage brokers.

We all know that bulk buyers can obtain discounts, it’s the same in the mortgage world, well, the same ish anyway.

Bulk buyers can pursuade mortgage lenders tro do special deals – special ‘unique’ not special ‘1% cheaper’ although the ‘right customer will benefit financially.

So, for individual mortgage brokers and smaller practices, those bulk business benefits are harder to come by, and so, in between the broker and the lender evolved the ‘Mortgage Club’ – the club negotiates the deal, and takes a small slice of our fee.

One of the major lenders – not sure if I should mention names, just in case it’s not public knowledge has decided to distrubute mortgages to brokers in one format, then with a slight variation for each of the main mortgage clubs.

For a mortgage broker, this is great – one of the major providers will have different offerings to brokers than to the public.

As another twist, most clubs ensure that brokers get heavily discounted mortgage software via the club, but also only list ‘regular’ and club products, not those of rival clubs.

So, an independent mortgage adviser, who was a member of many mortgage clubs, who pays alot each month for the top of the range independent software – he’d be useful, yes?

That’ll be me then. At the end of a phone near you.

Selling a house – 10 top tips

If you were selling your car – you’d give it a wash, make sure the wheels were shiney, hoover the inside and maybe pop down to your local garage for one of those things that make the car smell clean. Or a few drops on vanilla essense on the carpet does the trick too.

Your house is more valuable,  so it’s more important to give your house the same treatment – make it look and smell as good as it can.  The more keen the buyer is, the more likely he is to raise his price that extra £1000 or 2.  There is also more likely to be 2 or 3 people interested and that means, a higher price and an earlier sale.

1. The Price Pyramid. We all want as much as possible for our house.  If you imagine your house at a price of zero, there will be millions of potential buyers, and as you increase the price, people drop away until there are only a few, then only one potential buyer.

That is the value of your house.

That one person (We’ll call him Bob), is the person you need to appeal to and certainly not put off – if you put Bob off, you’ll need to price your house to sell the people further down the pyramid and you don’t want that.

What if you’ve priced the house to highly – as a rule of thumb, if you are getting no viewings you are well over, say, 10%. If you are getting viewings, but no offers, you are probably about 5% over. In this market, you need to deal with this quickly. In the old days the house value would catch up with your price, but not in 2009.

On the other hand, if you are too low, you’ll be swamped.

Presentation is key here.

2. The Estate Agent – The 1st step in the presentation process is with the estate agent. Remember the pyramid and more importantly our hero, Bob?

Bob is lazy and only looks on the main property website – so use an agent that will promote your house on there. From there, just in case Bob is old school, the agent must also be the top or second from top agent in your area – to assess this, take a look around and note the for sale and sold boards.

In these days of internet browsing, people want to see photo’s – interior and exterior. The exterior photo must have blue skies behind and not have cars in the drive, especially the estate agents own car. If there isn’t a photo of the kitchen or the bathroom, everyone will assume the worst, so the very minimum is to have those.

3. Storage - everyone says  ‘Ooh, plenty of storage’ when they see a decent sized cupboard. They won’t say that if the storage is rammed with junk, so give it a clear out – understairs cupboard, kitchen cabinets, everything – make it clean and tidy, so that the prospective buyer can imagine putting their things in there.  And don’t just stick it in the garage, that needs to be clear to, so we are talking about binning the stuff that needs binning and off site storage for the rest.

Oh, and excessive furniture has to go too, a cluttered room will make the rooms feel small.

4. Dogs. You need to remove any evidence whatsoever of pets from your house – smells, hairs, carpet stains and you know how labradors leave a kind of grease mark at knee level on everything – that too.  Bob doesn’t find all that appealing and that doesn’t make him a bad man. Clean and vacuum (remember shake and vac) before viewings – if you do this properly, there won’t be many.

5. Decoration. I know it’s dull, but it needs to be magnolia. Shades of magnolia are OK, but magnolia is where the money is – that’s why builders use it all the time and you’d they’d know wouldn’t you.  And, glosswork – white, or at least clean. If you are replacing carpets (with beige) then do the the skirtings while you are at it. If Bob doesn’t like green, then you need to move down the pyramid.

6. Personal stuff. Bob wants to imagine this house as his own. Your pants on the floor won’t help, your photo’s on the walls won’t help and your collection of fly fishing flies won’t help either. Clear it all away. This is Bobs house now.

7. Fridge and Oven. Clean them, properly. Anything that looks scientific or experimental needs to go.  Oh, and the black mould that grows in the bathroom? If you’ve got it find a way of getting rid of it – Bob will be washing in there and needs to think it’s nice and clean.

8. Outside. Bob will walk around your house. The outside is as important as the inside, so jet wash the patio slabs, clean, mow the lawn, get rid of the rusty barbeque, prune it, rake it (or buy some cocoa shells from the garden centre and pile it on the flower beds, it’s the easiest way)  and clear away all the kids plastic toys that have gone mouldy.   Clean up any signs of pets. Finally, if your home hasn’t been painted in a few years, spend the money and get it done.

As with the rest of life, first impressions are important here. Try this – park your car just down the road and walk to your house – tidy up everything on that journey that you can. Clean the step, sweep the path, polish the letter box, everything.

9. Damage. Repair or remove all broken or damaged items in your home, high impact things first – from the doorbell to lights, to cupboard doors.  If you can’t repair it don’t hide it. Nothing turns a potential buyer off more than finding damage that was hidden becuase they don’t know what else they haven’t found. It is easiest to just implement a weekly plan of repair and maintenance before you list your home, or even after. Just get them fixed one by one. If your lawn is bad, mow it every week, it will improve quite quickly in the spring and summer.

10. Timing. If you aren’t ready to sell your home, don’t. Also, if you can help it, avoid selling in December and early January and August.   Bob may not be looking.

Mortgage Express – existing customers

This press release from Mortgage Express

Mortgage Express (MX) is no longer able to provide any new lending and may not be able to offer competitive deals in the future. It understands that its customers may wish to reconsider their mortgage arrangements – either by selling a property, moving their mortgage to another lender or paying off some or all of their mortgage.

It also appreciates that those with an Early Repayment Charge (ERC) could be faced with a significant cost if they move their mortgage to another lender or make a capital repayment, which could be a barrier to considering these options.

So MX has made the decision to waive the ERCs for customers moving to another lender, selling or repaying some or all of their mortgage between 1st February and 30th June 2009.

It has written to borrowers with ERCs from 1st February to let them know about the waiver, and has advised them to contact their Financial Adviser to discuss their options.

Now’s the time to consider an offset mortgage.

Now that the difference between savings interest and mortgage interest is so huge offset mortgages are going to be worth considering again.

For everyone, it’s going to be a different calculation and I’d suggest contacting a knowledgeable IFA if you are worried.

Firstly, how do offset mortgages work.

If you have a mortgage of £100,000 and savings of £10,000 in the same bank you could look at the full picture and say you only owe them £90,000.

But, if they are charging you 5% on the mortgage and giving you 0.3% (£30pa) on the savings, you are losing out on the deal.

With an offset mortgage, they link the two accounts and don’t give you any interest on your savings, but, they don’t charge you interest on £10,000 of your mortgage.

That means you are saving interest at a rate of 5%, so saving £500 pa mortgage interest but losing £30pa savings interest. The £500 is untaxed too.

It’s a great deal.

So, how can you tell if an Offset Mortgage is for you.

You need to know what rate of interest you are paying now and are there any penalties for getting out of your mortgage.

How much do you have in accessible, low interest bearing savings?

Then you need to look for the best offset mortgage – rates start at 3.99%, but most of the deals are in the 4% – 5% range and you’d need to assess the best of these deals – as always it depends on the fees incurred, the rate you end up with after the deal has ended and the size of the mortgage you have – this is where your mortgage specialist can help.

Hope that helps a bit, contact me if you would like me to look at your circumstances.

Best wishes

Adrian