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Mortgage lenders and property agencies have just released their latest figures for the UK housing market displaying some conflicting results but the overall mood from analysts appears to be one of optimism for improvements in housing market activity.

Property prices are on the rise again according to the latest survey by the Rightmove property agency website. They reported the largest average monthly house prices rise in two years during February to leave the average residential house asking price in England and Wales at 201,600.

In their report, Rightmove put the record asking prices down to a shortage of sellers and increasing demand, especially a return of buyers at the lower end of the market which should have a knock on effect further up the property ladder.

However Miles Shipside, Rightmoves commercial director, sounded a note of caution, Sellers must not get too ambitious or the recovery could run out of steam as affordability is over-stretched again.

The Rightmove findings seems to stand in contrast to the figures recently released in the FT House price index, which shows that the, recovery of house prices since the Autumn has been extremely muted and did not gather pace at the start of 2006. The FT also reported that two other separate sets of secured loans data published about the same time, showed mortgage lending for January was down on the previous month but higher than the figure for January a year ago.

The FT house price index shows a subdued market rather than the more buoyant figures from Rightmove, or the lenders, the Halifax and the Nationwide. The FT believes that their figures based on Land Registry data provide an accurate representation of the market, with the figures from the lenders bouncing around, in ways most unlikely to reflect reality.

Many of those who are currently seeing a restrained increase in the market figures are looking towards possible future Government action through the Bank of England to increase sales. Howard Archer, the chief UK economist at financial analyst Global Insight, feels that an interest rate cut is on the cards in the early part of 2006. Mortgage comparison site Moneynet believes that a widely expected Bank of England base interest rate cut will lead to the housing market, getting a shot in the arm with many people looking for the right mortgage package to get them on the housing ladder.

Independent mortgage adviser from John Charcol, Ray Boulger, feels that an interest rate cut which will help the housing market is on the cards. “I expect to see at least two quarter point reductions in base rate this year and house prices to rise by about 5.5 per cent.

The Council of Mortgage Lenders most recent figures indicate mixed results with gross mortgage lending in January up by 32% to 23bn compared with the 17.4bn recorded in January 2005, however this was down from Decembers high of 26.9bn.

Although the recent reports appear to show contradictory and inconclusive results, Howard Archer commented that, Although the British Banking Association showed some slowdown underlying mortgage lending in January, this followed a particularly strong performance in December. Overall the data indicate the marked improvement in housing market activity – borne out by the latest report from Rightmove.

Disclaimer:

All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.

You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

Useful resources:

Financial Times house price index – http:news.ft.comcmss1d089640-fb60-11d8-8ad5-00000e2511c8.html
Moneynet mortgage comparisons – http:www.moneynet.co.ukmortgagesindex.shtml

Purchasing a house has been a vision for many. But it is impossible for an average man to possess a huge sum of ready cash to procure the property; the only remedy here is, going for mortgages. Mortgage can be defined as a loan which will provide monetary help to purchase any real estate property. The borrower can make his payments regularly to the lender. In this kind of arrangement the property itself acts like a collateral security, so the lender has full rights over the property until the borrower has finished his payments. If the borrower does not pay the loan properly and if he becomes a defaulter, the lender can repossess the property and sell it to someone else.

Mortgage debts arise when the borrower fails to make his regular payments; these failed payment amounts accumulate and rise up as a mortgage debt. The mortgage debts can be categorized under the priority debts list, because you will lose your valuable property if the debts are left unpaid.

It is rightly said that a man in debt is a slave to it. Mortgage debts are no exception, and the finances involved in this debt are more when compared to all other kinds of debt. And mortgage debts tend to be very complicated too. So to get rid of this debt it is necessary to finish it of by making regular payments.

Nowadays borrowers tend to elongate their period of debt. And studies have reported that some borrowers have no idea of repaying, and some others have an idea of reselling their property. People should not possess such negative attitude towards mortgage. So to avoid such critical conditions, borrow only an affordable amount, which can be repaid. Borrowing huge sums of unaffordable money could only be disastrous. It is best to pay a decent down payment amount.

Do not fall a prey to the misleading services offered by the lender, like the cashbacks, where a small percentage of your borrowed amount is paid back once in a year. The lender may attack you with high interest rates and other kinds of mishaps.

Mortgage debts are increasing because; sometimes due to unavoidable circumstances borrowers become defaulters. To avoid these conditions choose the best mortgage plan which will suit your requirements, avoid the interest-only mortgages where you pay the interests first in installments and then later you pay the capital. The plan is not very amiable because after you finish your interest payments you will still have lumps of money to be paid as capital.

To escape from the mortgage debts follow the traditional regular payments and do not fall for the high rated home loans. Thus lead a debt free life.

A big part of getting approved or rejected in the mortgage process lies in your ability to make rational, unemotional decisions. It’s essential that you separate yourself from the emotional issue of getting a house and approach the whole process like a business.

People get a bit goofy when it comes to money especially when it comes to their money and in the case of the getting a mortgage you’re talking about the most money anyone will ever spend. As a result, if you can take the emotion out of the equation your chance of making the right decision will increase dramatically. If not, you could be in for a tough road because people who make mortgage decisions based on emotion – make mistakes.

Mistakes = Emotion + Money
Those who take their time and make decisions based on the reality of their individual situations enjoy much greater success when you look at their overall financial situations.

The following questions are designed to help you determine how long you expect to be in a prospective new house or hold a mortgage. They should also help you to do the necessary soul searching “before” you make such a huge decision. In fact, the length of time you keep a mortgage may be the most important financial question you need to answer because how you answer it will determine the strategies you need to follow when selecting and paying off a mortgage.

The bottom line is that only you can make the decision because only you know your position in life now and only you can make the decision on what direction to take your life in the future.

Personal Questions
1. How long did you live in your last house? Why did you move and is that a recurring factor in your life?
2. Are you expecting any major life-style changes?
3. Any major health concerns in your life?
4. Is this going to be your last house before retirement?

Family Questions
1. Are you expecting any new family members (i.e. children, elderly parents, etc.)?
2. When will your children be moving out?
3. How stable is your marriage?

Financial Questions
1. Am I expecting a promotion or job transfer? Am I transferred at regular intervals?
2. How is my overall job stability?
3. Are you planning on retiring soon or are you just entering the work force?
4. Is this an investment property with long term rental potential?
5. Instead of selling this house when we move, could we rent it out?

Economic Geographical
1. Are property values going up or down in the neighborhood?
2. Is the local school system acceptable?
3. What are the property taxes?
4. What is the overall economic condition of the area – city, county?
5. Are there any long term changes expected such as roads, schools, malls, etc.?

Location Neighborhood
1. How long will this house meet our needs?
2. What is the condition of the house? Any major repairs needed?
3. If this is a starter home will it be too small in a few years?
4. How are the neighbors?
5. Does the overall condition of the neighborhood appear to be improving or deteriorating?
6. Are you buying this house only because it’s all you can afford?

Of course, there’s many more questions that could be asked but for purpose of this article let’s take a look at some examples that will demonstrate how answering particular questions will help you in determine what type of mortgage to pursue – 30 year fixed, interest only, 228 ARM, 15 year fixed and so on.

Example 1 – If you lived in your last house for about 10 years and the house before that for about the same amount of time, odds are you’ll live in the next one for lengthy period of time also. Therefore, you should accordingly and thus you may want to look at either a 15 or 30 year fixed mortgage.

Example 2 – If this is your first house and you plan on moving out as soon as you can afford it then plan on the best mortgage for being in a house for a short period of time. An interest-only or 228 ARM mortgage may be the route to go. The 228 ARM is fixed for two years and then the rate goes up (it’s adjustable) but if you plan on moving quickly anyway the first two years is will be lower than a fixed rate mortgage and thus it will save you money. Interest-Only mortgages are usually amortized over 30 years, just like a 30-year fixed but since you are only paying the interest the payments will be lower. Therefore, if you would like to lower your payments and possibly use the extra money to save for a down payment on your new home then an interest only mortgage may be a good option.

Logical Decisions + Effective Planning + Money = Success
Although it’s difficult, if you remember to approach the purchase of a new home as a business decision and not as an emotional one the odds that you’ll make the right decision will be greatly enhanced.

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A mortgage is a kind of an agreement made to pay the money, which was loaned, to a person by keeping the house as collateral. Mortgage is a promise made to pay the debts by putting it in writing basically. Mortgages have terms and interest rates which are either adjustable or fixed.

Mortgage terms:

Mortgages are designed in such a way that they can be paid in installments for a certain period. The time frame which allows the person to pay back his mortgage is called the term. The term may be 10 or 15 or even 30 years. The length of the term determines the amount of money to be paid, which is actually spread in installments.

Mortgage interest rate:

The interest rate depends on the percentage to be paid on the mortgage loan amount. The interest rates vary according to the credit score of the person. If the credit score of the person is very high, the interest rate and the amount of monthly installments are lower. If the credit score is lower then the interest rates and the monthly installment amount are higher. Hence a good credit score will help getting lower interest rates to the debtor.

Types of mortgages:

Mortgages – Adjustable rate of interest

Under this type of mortgages, the interest rate changes from period to period according to the fluctuations of the market. The degree of change of mortgage interest rate is directly associated with the index to which it is tied. Since index will differ as they may be tied to a foreign bank rate of interest in certain cases, it is good to ask to which index the adjustable rate of interest is tied to. Usually they are fixed for a period of 1-5 years and then become adjustable.

Mortgages fixed rate:

The interest rate of the loan amount is fixed in the case of fixed rate mortgage till the end of the term regardless of the market fluctuations. The debtor will never have to pay more than the fixed interest rate at any cost. The only means by which a fixed rate mortgage can change is through Refinancing.

Refinancing:

It is a process of changing the existing mortgage terms of agreement. The debtor can go for refinancing when the interest rates are lower so that he can save money qualifying for the lower rate of interest. The length of the term can also be adjusted to be either long or short using refinance option. Care needs to be taken when going for refinancing of mortgages as it entails for new closing costs. Fees and closing costs are involved in this method.

Appraisal:

The crucial part of mortgage is the appraisal. Before going for a loan from a bank, the value of the house must be assessed properly. An appraiser can determine how much the house is worth actually by inspecting the features of the house and by comparing it with the neighborhood houses. If any addition or embellishment is made to the house, it can raise the value of the house, but may require to appraise the new value of the document.

Mortgage – Provides you the Best Deal against your home

You must have read or heard about the word Mortgage, but dont know what it means or stands for and how it can help you to make the best use of your property. So keep reading.

The word Mortgage refers to a contract in which borrowers can pledge their property as a security for a loan. Each group has a different need that they desire to fulfill through mortgages.
Mortgage caters to diverse group of people.

With the infinite number of mortgage options available in the finance market, you should choose the loan that is most appropriate for you because in case of mortgage your property is at stake.

A number of mortgage options are available in the market, few of them are: -

Council Right to buy mortgage – This mortgage is available for use by public housing tenants who wish to purchase their property under the Right To Buy Scheme. This scheme enables tenants to buy their homes at a discount price.

Buy-to-let mortgage – This mortgage is appropriate for people who wish to let their home on hire and gets rentals from the tenants. They are now available from plenty of mortgage lenders such as banks, building societies and specialists.

First time buyer This mortgage is available to first time buyer who wishes to buy home for the first time.

Self cert mortgage This mortgage requires borrower to disclose his income statement and the lender verifies for its accuracy. It help borrowers consolidate all their debts into one low monthly payment.

Pension mortgage – This is a tax efficient way of buying a property. It involves building up of pension fund and use of it in future to repay the debt.

Flexible Mortgage This mortgage allows you to vary your monthly repayments, you can over-pay or under-pay on the mortgage without incurring charges.

Reverse Mortgage This mortgage is usually taken by retired homeowners as a method to supplement their income

You can look for the lenders in the newspapers or Internet. You can derive information from Internet and can look for online lenders. What you need to do is to shop, compare and negotiate. You can browse through various websites and can also avail loan assistance and guidance from experts, thus minimizing the risk involved.

You can take a loan by mortgaging your property even if you have a poor credit history, a low credit score, no bank account, a history of payment arrears, defaults, county court judgements; mortgage arrears and even those who have been declared bankrupt. Your negative credit report cant refrain you from taking a loan.

The rate of interest charged in mortgaging your home is much lower than as in the case of taking an unsecured loan.

Mortgage works wonder. What you need to do is to look for the best deal, which you can find by shopping, comparing and negotiating among various lenders. Last but not the least the rate of interest charged in mortgaging your home is much lower than as in the case of taking an unsecured loan. So make the best out of your property.