Mortgages

As new mortgage approvals hit the lowest levels since records began in 1990, we are now also seeing a further drop in the value of houses across the UK.

Halifax have reported figures are now down by 0.9% - however the average house price is still a  staggering £189,00.

Well, it looks like the borrowing boom of 2006/2007 is well and truly over in 2008.

First Direct Bank and the Skipton and Derbyshire building societies have all declared this week that they are no longer taking any new customers seeking a mortgage or remortgage.

The latest news according to Halifax’s details is that the price of houses is on a continual fall at the moment. And being the largest mortgage lender in the UK, they should know.

Prices of houses continue to fall month by month and are presently down by 0.3%.

It seems a bit unfair that people that aren’t married or in a relationship are singled out of the property market.

It is so hard to get a mortgage for houses today that are very expensive compared to the average persons salary in the UK.

You can now transfer mortgages from one lender to another. The main incentive is to get the cheapest deal possible to help you pay off your mortgage quicker or reduce your monthly repayments. However, it can also be a way of raising some capital too for things such as debt consolidation, home improvements or expensive purchases or events.

Also known as remortgaging or refinancing, switching your mortgage lender is a common practice for many mortgage holders. Just beware of charges that can be slapped on by your current and new lender and make sure the effort of switching will benefit you in the long run.

There was an interesting article on FinanceLocator last year, Foreign Currency Loans, which discussed about the new mortgage and loan fad that seemed to becoming very popular despite being very high risk.

The idea is that by taking out a loan or mortgage in a different currency of less value, will gain you additional funds to help you pay off your mortgage quicker.

I read in the latest news reports that at the end of December 2007, the number of mortgages being approved had dropped to 73,000, that’s the 7th month the rates of mortgages being taken out has dropped.

FinanceLocator wonders:

Whilst approval rates are dropping, could it just be that many people are opting to stay put or rent until the whole market settles down?      

News today shows that the market shares for beleaguered bank, Northern Rock, have dropped to their lowest value yet. A fall of 24% yesterday meant that each share was only worth 9.25p.

The reason? The news that the UK government may be close to deciding on the future of the bank.

Do we have a sub-prime problem in the UK too?

Last year 1 in 5 mortgages approved were classed as being ’sub-prime’. These included approved mortgages for people who had a bad credit rating due to a poor credit history, and self-cert mortgages where applicants essentially do not have to show any proof of income.

Probably the best Christmas present of all for homeowners with a mortgage. Two of the UK’s largest mortgage lenders have announced, that as of today they will be dropping their standard variable rate, to allow their customers to fully benefit from the reduced base interest rate that the Bank of England announced just yesterday.