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  • Mortgages & Finance

    Latest finance news ... courtesy of Resident Broker

    John Simpson of Resident Broker has given me kind permission to reproduce his blog here:
    Welcome to another property finance newswire – for news and views on the buy to let mortgage market.
    No surprise last week that the base rate was put on hold – in fact it passed with little comment.
    I had been invited this week to a mortgage strategy summit with the top players within the mortgage industry (to my surprise). It was a bit like the G20 summit but for mortgage brokers, and it has given me a fantastic insight into the current state of the market from both a lender’s and broker’s perspective.
    If I can summarise 2 days into 30 seconds, then I would as follows:
     Don’t expect any new lenders coming into the market for the next 2 to 3 years.
     Loan to values will not increase until the market stabilises.
     General consensus is that property values will bottom out within the next few months
     Once properties have stabilised lending criteria should ease.
    I’m not sure there were any particular surprises within this list. However the overall mood was that the worst had been avoided and it would be a steady climb back up the hill.
    Here’s our product pick this week for mid-May:
    BM Solutions
    Interest rate: 5.29%
    LTV: 75%
    Product Detail: Fixed to 01/07/2011 at 125% rental calculation
    Arrangement Fee: 2.5%
    Early Redemption Penalties: 3% until 01/07/2011
    Our thoughts: Still the most efficient and quickest. Remember you can only have a total of 9 properties within the Lloyds group.
    Coventry/Godiva Mortgages
    Loan to Value: 60%
    Interest rate: 5.40%
    Product Detail: Fixed until 30/06/2014
    Arrangement Fee: Flat £1749.00 (Booking Fee £250, Free valuation)
    Early Redemption Penalties: 4.00% until 30/06/14
    Our thoughts: A low fixed rate with a set arrangement fee rather than a percentage. For high value mortgages this is a good option.

    Tip of the week again – Want to cap your mortgage payments?
    Are you concerned about what interest rates may do in the next couple of years? If so then read on:
    If you had the chance to:
    1. Cap your current variable rate at just 2% above your current rate – in other words if rates rose beyond 2% you wouldn’t pay anymore than the initial 2% rise.
    2. Have no legal or valuation fees and no credit searches.
    3. No minimum loan to value – in other words even if you were in negative equity you could have this capped product.
    4. Pay an arrangement fee of no more than 1.5%.
    • You can use this for buy to let, residential and commercial.
    • For just one or all of your properties.
    • Use it to hedge interest rate rises across your portfolio.
    Well, we do have such a product available. It’s certainly not for everyone (eg you cannot raise any extra capital) but call us on 01424 205 373 and we can explain how many investors are using this product right now.
    Call one of our advisors today for more information on any of these deals 01424 205 373
    Good hunting!
    Your Resident Broker
    John
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