Hunting For A New Mortgage Is Far Harder Today Than A Year Ago.
With mortgage rates currently falling so rapidly, you might be wondering if now is the time to swap mortgages to see if you can get yourself a better product, which over the long term will save you money. But is this as simpe to do as it was a year ago? Keith Lunt looks at how complicated this has now become.
Frankly, no. It is now far from easy to find yourself a new mortgage deal. The lenders have reacted to the current credit crunch by making it far harder to obtain a remortgage and at the same time many of the lenders themselves are finding it harder to obtain the money they need for lending to customers. If they can’t get the money, they then have to further limit what they lend.
Many of the big lenders have now taken away their easy going remortgagesand are instead making it much harder for potential borrowers to take out a mortgage. They are putting huge boundaries around their mortgage deals that potential customers have to be able to climb before they stand any chance of obtaining a new mortgage.
Aside from the fact that a lot of the banks have increased the basic mortgage charges, making remortgage far more expensive just to take out, many have taken away deals that would appeal to the home buyers the building societies are now worried about not being able to keep up repayments. They are securing themselves for the future by only accepting mortgage requests from those home buyers that they are convinced will always be able to pay back their remortgage. They are protecting themselves from the gamble they once used to take of risky lending in return for a high rate of return.
An example of this that is clear to see is the removal by the building societies of the 125% mortgage. Now you would be struggling to find a building society willing to give you 90% of the building value as a loan. And in a lot of cases, even securing more than 75% of the building value has become extremely difficult.
So what can you do if you want to change mortgage and find a new remortgage rate to save you some cash, and take a benefit from falling mortgage rates? Well you can compare mortage rates yourself and see what is about, but many of the rates on offer are only available for certain types of home buyers. It is more efficient to approach a local mortgage broker and get them to check mortgage rates for you instead. This need not be a difficult search. Many websites offer this contact service, so you can still effectively do the search over the internet. And by using a free service, you are saving yourself time, and hopefully cash.
Remortgaging Does To Be A Money Saver, But Not For Everyone.
Mortgage offers are falling to a low and the bank’s base rate is predicted to hit an all time low. Is this the time to be hunting for a remortgage?
Well, it all depends very much upon your own personal financial circumstances. If you are tied into a mortgage with redemption penalties then looking for a new mortgage might cost you more that it would save you. But if your current product is approaching the end of the penalty term, or has finished any lock in periods, then it might be worth trying to compare mortage loan rates to check if there is a better product out there on the market.
There is also, sadly, another group of people for whom finding a remortgage rate might not be an easy or a cheap option. If you are unlucky enough to have bought your property within the last couple of years, then with the plummeting house prices currently seen in the market, it’s possible that at best your house is worth only what it was worth when you bought it. At worst, for those that bought at the peak of the property prices, it is probably that you have lost quite a large chunk of what you paid for the home.
The problem here is that you could find that your current mortgage borrowing is too high for the lenders to be happy to lend to you. For example, if they were happy to lend you 90% of the value when you bought the home and it has now dropped in value by 10%, although the amount borrowed would be the same, the amount as a percentage of the house value has shot up to 100%. Many banks are now dubious about such high lendings, in a lot of cases charging more to those who are borrowing more than 75%. So although your borrowing might have seemed OK to the banks when you took out your current deal, now they might not touch you with the proverbial barge pole.
And it’s not just those that have suffered property price drops that are in this difficult position. Until recently some lenders would actually lend up to 125% of the property’s market value. If you were in this position when you took out the mortgage, unless your property value has risen by almost 40% or more, you would still be looking to borrow more than 90%. This would leave a lot of building societies unlikely to be willing to help you.
If you are stuck with an expensive product and want to move to a cheaper one, then the mortgage market can be a mine field. Make sure that you contact a mortgage advisor and let them compare remortgage rates for you, to see if they can find some good products for you.
Keith Lunt writes on behalf of the comparemortgagerates.co.uk website, where you can find useful information about mortgage rates and contact a local broker who may be able to assist you in finding a new mortgage deal.
The Key Steps To Claiming Unfair Bank Charges. Background To Reclaiming Your Bank Charges
The first step to reclaiming your bank charges is very quick – write to the bank and request your money back! Yes, really!!! The letter, using a standard letter layout (your address etc at the top) should give a reference of your bank account and include the date it was written.
Then, tell them that you are asking for a refund of all charges applied to your account in the past 6 years. Remind them that Under the Unfair Terms in Consumer Contracts Regulations 1999 fees must reflect administration costs and cannot be punitive. Then list the charges you have incurred and the amounts involved in each, stating that you do not believe the amounts to reflect the true cost to the bank.
Next, state the total amount that you have been charged and request that they refund it to you.
Finally, ask them to return the money in full within 14 days, otherwise you will initiate a claim against them for the entire amount, plus interest and costs. If you are at all unsure, plenty of websites show sample letters and include calculators to calculate what you are owed.
You have given the bank 2 weeks to get back to you, so if it doesn’t send a reminder and phone them. They might try to delay by offering a reply at a later date. In this case, write & phone telling them that you are allowing them a further 14 days before starting court proceedings.
Another trick the banks use is to tell customers that they are mistaken and cannot claim refunds or that the fees are not unfair. In this case, you are probably still at the point of a second letter and then start court action.
If they reply offering the full amount then you have won. If they offer a partial refund then you have to weigh up whether it’s enough or whether you want to continue. If the amount of fees involved are low or the proportion they are offering to repay is high, then the effort of continuing a reclaim might make acceptance worth while. But if they are offering a very low offer, there might be good rewards in asking for for the full amount. Only you can decide.
If you haven’t got the result you want through writing, then it’s time to resort to bluffing your bank with court action. If your claim is for under £5,000, then you can go through the small claims court, even using the online system! If your claim than £5,000, then see if you can reduce the claim, either by not including all fees (for example if the claim is £5,001) or if the fees relate to more than one account, make multiple smaller reclaims.
At this point you then need to check how much a claim is going to cost you to start (you can reclaim for costs if you win / the bank does not defend the case). Then you can start the proceedings. But that is beyond the scope of this small writeup!
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