Category Archives: News

Bridging loans helping London prepare for the Olympics

Posted on by
Reply

London is gearing up for the Olympics, which are being held in London East End this summer.  This has resulted in property sales soaring in the area as development projects are taking off with vigour.

 

The Olympic Park is based in an area that has a large number of residential properties, which will be in demand over the summer season, as people flock to see the Olympic Games for themselves.

 

Due to the economic crisis, many investors don’t have liquid cash to get their foot into the Olympic door, so they are sourcing their funds elsewhere.  Many of these investors are turning to bridging loans as a way to secure their developments and investments.

 

The year ahead can expect increased sales in London East End along with a high number of these sales being financed through bridging loans.  This is a boost for the area, which can expect to enjoy higher property values as we get closer to the Olympics.

 

Using bridging finance for investments such as these is a sensible option, it helps when you don’t have the liquid cash in hand, enabling you to get your piece of the Olympic property boom.

Secured loans with no LTV restrictions

Posted on by
Reply

Whisper it quietly, but there are signs of “green shoots” in the loan market as we head in 2012. Towards the end of last year we saw many Secured loan lenders increase their LTVs and lending volumes markedly picked up from 2010. This year the tome has been set early on by a new entrant to the market, Evolution Money, and their new product with no LTV restrictions – yes, that’s right; as long as you are a homeowner, they will consider you for a loan.

 

There are four lending plans in their Secured loan portfolio depending on how much you want to borrow:

 

Plan 1

  • Amounts from £1,000-£3,000
  • Terms from 12-36 months
  • APR 59.6-100.3%
  • Candidate criteria:
    • Age 18-68
    • England & wales only
    • Must be employed a min of 16 hours p/week
    • No more than 3 months’ Secured loan arrears
    • No missed mortgage payments in the last 6 months
    • No default in the last 6 months
    • No more than 2 legal charges on the property

 

Plan 2

  • Amounts from £3,500-£5,500
  • Terms from 18-60 months
  • APR 54.3-84.7%
  • Candidate criteria:
    • Age 21-68
    • England & wales only
    • Must be employed a min of 16 hours p/week
    • No more than 3 months’ Secured loan arrears
    • No missed mortgage payments in the last 6 months
    • No default in the last 6 months
    • No more than 2 legal charges on the property

 

Plan 3

  • Amounts from £6,000-£7,500
  • Terms from 36-72 months
  • APR 45.4-63.5%
  • Candidate criteria:
    • Age 21-68
    • England & wales only
    • Must be employed a min of 35 hours p/week
    • No Secured loan arrears
    • No missed mortgage payments in the last 12 months
    • No default in the last 6 months
    • No more than 2 legal charges on the property

Plan 4

  • Amounts from £8,000-£10,000
  • Terms from 36-84 months
  • APR 27.9-40.4%
  • Candidate criteria:
    • Age 21-68
    • England & wales only
    • Must be employed a min of 35 hours p/week
    • No Secured loan arrears
    • No missed mortgage payments in the last 18 months
    • No default in the last 9 months
Speaking to Tina Edwards of Evolution Money she said the focus was to assist people who have had some credit problems in the past but who do now meet the affordability criteria for such a loan and are attempting to repair their credit record. This product will certainly bring many Borrowers in from the cold and already in January it is proving to be quite popular.
In addition, Evolution have also launched a Guarantor Loan product with amounts up to £5,000 available to non-Home Owners who can provide a home owning Guarantor.
We are an agent for Evolution Money and can offer these loans to our clients. Please call on 0845 126 0350 for more details.

Lowest 10 year fixed mortgage ever

Posted on by
Reply

I have to be a bit careful with the title of this piece because the way the market is going and the way interest rates are forecast to stay so low for so long (at time of writing, the CEBR expects Interest rates to remain unchanged until 2016!) it could well be soon out-dated, However, for now, the title is safe.

Norwich & Peterborough Building Society have stunned the market with the boldest move yet in long term fixed rate mortgages. With a fixed rate of 3.99% for 10 years, it means you do not need to worry about what Mervyn and the boys are doing at the BoE until 2022. At Choice Loans we’re calling it the ‘Sleepeasy’ mortgage. If you like fixed rate and ar ein variable, this could be one of the best remortgage deals you’re likely to see

 

Does it come with restrictions and at a cost? Well, you’ll be surprised to learn the terms are not that onerous:

  • LTV of up to 75% is available
  • Amounts from £25,001 to £350,000 are available
  • The Lender fee is just £295
  • Free legals and free valuation for remortgage customers/£200 cash back for Purchases
However, there are a few catches to be aware of:
  • Early repayment charges apply if you repay within the 10 year period or if you repay more that 10% per year (or £10,000) in this period
  • No self-build or conversions
  • To paraphrase one of their rival’s adverts: “Brand new customers only”
That said, many people will appreciate the security of knowing what their outgoings are so it’s reasonable to expect the good people at N&P will be kept busy with this one. If you need any assistance in discussing your mortgage options, give us a call on 0845 1260350 and we’ll connect you with one of our panel of qualified Mortgage brokers.

UK Buy to Let market developments

Posted on by
Reply

Lenders are improving their Buy to Let Mortgage Ranges

 

Some important factors that prove the buy to let UK market is on the increase are the great offers from various financial institutions including Woolwich, Yorkshire Building Society and Platform.

 

Woolwich is offering:

  • 75% loan to value fixed rates of 5.29%
  • 75% loan to value tracker rates at base of / 3.99%
  • 60% loan to value fixed rates of 3.98%
  • 60% loan to value tracker rates at base of / 3.49%
  • Fees set at £3,999 for each loan
  • Raised loans from 65% to 75%

 

YBS or Yorkshire Building Society is offering:

  • Buy to let loans across UK and Wales from 23 January 2012
  • Minimum property value of £100,000
  • Minimum age requirement is now 25 years old
  • Minimum annual income is now £20,000

 

Platform is offering:

  • Increased loan range of up to £500,000
  • 2 year fixed and tracker rates available up to 65% with a 1% arrangement fee
  • Fixed rate has been extended to 30 April 2014
  • Anyone buying a new home without selling current home can use this mortgage

 

Is The Buy to Let Market on the Rise?

 

As the lenders steer towards supporting the buy to let market, it is an indication that our poor economic climate is on a rise after our bad year last year. During the crisis there weren’t many companies offering potential landlords mortgages and best remortgage deals, but now there appears to be a demand as property prices are low and the market is filled with eager tenants.


 

Developer Jailed for Bridging Loan Fraud

Posted on by
Reply

It has come to light that property developer Franco Campagna and his conveyancer friend, David Kitching have been jailed on eight charges of fraud for misusing bridging loan finance.

 

Franco Campagna was using short term bridging loans to buy to let properties which he then sold onto his clients.  This was all going well until he faced financial problems when the economic crisis hit.

 

His clients then managed to secure themselves finance to pay off the short term loans, but Campagna managed to persuade David Kitching to use the funds to pay off loans on some of the other properties in his portfolio.

 

Campagna and Kitching had been friends since the late 1990’s and had done over 250 deals together, Campagna actually suggested Kitching to his clients as a conveyancer.  Kitching proceeded to produce false title certificates in order to get the funds released; this is believed to be a total of over £500,000.

 

To this day the misused bridging loan funds still haven’t been located, leaving Kitchings company facing over £700,000 in civil court claims against them.

 

Frank Campagna was sentenced to two years and four months jail time on eight counts of fraud, while David Kitching admitted guilt and was sentenced to twelve months in jail.

Poor Credit Secured Loan from Promise Solutions

Posted on by
Reply

We learned today that Promise Solutions have come to the market with a new Secured Loan product aimed at those homeowners with with poorer credit records. The features of this new Secured Loan products are:

 

  • Up to 75% LTV for loans up to £10,000
  • Up to 70% LTV for loans up to £15,000
  • Residential, Commercial or Council houses all accepted
  • Self Employed accepted too – even those without accounts or accountant’s reference
  • Any amount of CCJs, Defaults or Unsecured Arrears allowed
  • Benefit income accepted
  • Any amount of mortgage arrears accepted as long as you have made 4 of the last 6 payments
  • Get an even lower rate if you have made all of the last 6 months mortgage payments
Any new product has to be welcomed to the market but this one is particularly good as it opens up borrowing options to a whole new swathe of Borrowers. It’s no secret that the recession and economic climate has seen a large increase in the number of people with arrears and defaults but this new Secured Loan gives them a chance to not just borrow but also build their credit record.

 

As always at Choice Loans we strive to keep you up to date with the latest products in the market and make sure they are available to you. If you think this Secured Loan product or another may suit you then do either fill in the application form on the Secured Loan page here or give our Broker team a call to see what they can do for you.

Proposed EU Directive to change Buy to Let UK market

Posted on by
Reply

Changes to the mortgage market currently being debated in Brussels stand to have  a major impact on that most loved of British institutions, the Buy-to-Let mortgage, if they come into force in 2013 as is being mooted.

 

The main points of the EU Draft directive on Credit Agreements Relating to Residential Property are:

  • Buy To Let mortgages should to be regulated similar to other mortgages. Currently a Buy To Let is viewed as a commercial transaction and therefore not subject to the rigorous regulations of the mainstream residential mortgages.
  • When determining affordability for a Buy to Let mortgage, the Borrower will not be allow to include the rental income of the property meaning a Buy to Let landlord will have to have a separate income with which to justify their mortgage
It’s that second point that could have most impact. Without a Buy to Let bid in the UK housing market it is fair to say that property prices would not be as robust as they otherwise might be. Indeed, detractors from this particular change touted by the Directive would even go so far as to say that if this change comes in we will see a significant drop in house prices as the Buy to Let bid evaporates and existing landlords have to firsale thier properties when they are unable to remortgage them. Given that the very thought of a house rice drop is both socially and politically unpalatable in the UK, it is fair to expect some resistance from the UK’s elected representatives in Europe to this move and at the moment the cause is being championed by the Council of Mortgage Lenders who are suggesting that the UK Buy to Let market be exempt from the legislation.
There are a number of sides to this debate. On one hand we have to encourage the responsible lending ethos that this Directive is trying to encourage, though perhaps the method being used to achieve this could be descried as akin to “using a sledgehammer to crack a walnut” – there are other ways to achieve the same result by simply regulating other criteria such as rental-to-interest ratios. Also while the thought of a house price fall is sure to send the printing presses of the Daily Mail into meltdown, an argument could be made – often on a slow news day by that very same paper when short of something else to complain about – that house prices are too high now anyway and becoming increasingly unaffordable, especially for so-called “essential workers” of the health and rescue services. The reality though is that while everyone talks a good game on the fact that house prices for essential workers and young first time Buyers should be lower, they actually mean everyone else’s house price, not their own!
Whatever the merits of the debate the FSA seem to be in favour of regulating the Buy to Let mortgage market in the UK so it does seem some change almost certainly will come. Only time will tell what exact for that will take.

Buy to Let mortgages in the UK not to be regulated

Posted on by
Reply

While we are still some way away from a definitive resolution, according to the Council of Mortgage Lenders (CML) exemptions being added to the European Commission’s Mortgage Directive now seem to indicate that Buy to Let mortgages in the UK will not be regulated. Though these exemptions have yet to be published publicly, this news will come as a huge relief to many in the industry.

 

Last week the European Parliament’s Internal Markets and Consumer Protection committee (IMPC), one of two committees developing the directive, published its report on the EC’s proposals.In a subsequent Newsletter from the CML they agreed that a uniform approach to all lending and consumers was not appropriate and confirmed exemptions would be made. In their statement they said “The UK believes it is inappropriate to regulate buy-to-let under rules designed to protect consumers and we understand that amendments have now been laid that would exempt this type of lending from regulation under the directive.”

 

In addition some of the obligations on Lenders would also be lifted such as:

- the requirement to state why an application was rejected

- the requirement for advice to be based on a sufficiently wide range of products should be amended so that consumers must be told if advice is only being given on a limited range

 

In general this news will be welcomed by the industry but until the Directive is finalised there will still be a collective holding of breaths. It’s good to see though that he EC has recognised the different characteristics of the Buy to Let industry in the UK and elsewhere and the different calibre of consumer to the general mortgage market.

 

However, the Directive is not yet finalised and is due to be debated and voted on by the European parliament in the coming months.

Leeds BS offers 1.99% Fixed rate 2 year deal

Posted on by
Reply

Leeds BS has launched a new 2 year fixed rate deal at 1.99%, making it one of the lowest fixed rate deals in the market. The details are:

  • Rate fixed at 1.99 until december 2013
  • Max LTV of 70%
  • Fees of £1,999 for mortgages up to £500,000 and for mortgages over that amount it’s a flat 1%
  • Loan repayments of up to 10% are allowed in any year
  • Early Repayment charges are 3% in Year 1 and 2% in Year 2
  • Availability is limited
We felt this deal was worth pointing out as it is actually the lowest fixed rate that Leeds BS have ever offered in their 136 year history and is a sign of how the market is increasingly competitive.
If you are looking for a mortgage be it a First time purchase, a Buy to Let in the UK or just want the Best remortgage deals then do get in touch with us at Choice Loans and we’ll connect you with one of our panel of expert Mortgage Advisers.

Secured Loans – Finding the best Loan

Posted on by
Reply

The UK Secured Loans market is enjoying strong growth recently as many new lenders have entered the market providing borrowers with many competing options, even secured loans for bad credit borrowers. Among the most popular Lenders are names such as Blemain, Nemo, Prestige, Jigsaw and Tiuta; they may not all be household names yet like many of the high street lenders but their influence is certainly growing.

 

So, why are secured loans so much in demand of late? There are many reasons: Firstly the tightness in the mortgage market has meant mortgage lenders are not as keen to offer finance as before. Secondly, even if they are eligible for one, many people find themselves on competitive tracker rates and don’t want to remortgage and lose that deal. Finally too we note that the regulation in the Secured Loan market is lighter thereby making transactions easier.  All these factors have contributed to the rise in popularity of the UK secured loans market.

 

What does one need to know before borrowing in this market? A key point to note is that the best secured loans are not always the cheapest secured loans. Terms vary across lenders and what may appear cheap up front could have some painful Early Repayment Charges. These could come into play if your circumstances change and want to complete the loan before its natural term. Watch out too for Lender fees that could substantially change the APR on a loan, especially if it is over a shorter term. As with all things financial finding a reliable broker to advise you will likely pay you in the long term.

 

One of the most popular uses for this market is providing secured loans for bad credit borrowers. If someone with a less than perfect credit record needs to borrow but is not eligible for an unsecured loan, if they have equity in their property there will likely be a secured loan available to them which will both finance their requirement and provide them with an opportunity to rebuild their credit rating. Very often such loans aren’t the cheapest secured loans available but if the borrower maintains payments for, say, a year they can then switch to a better rate or may be eligible for a remortgage or an unsecured loan. In the long term, the best secured loan for them may well be the one with a high interest rate (albeit the only one available to them at the time).

 

Going for the best secured loans in the UK requires some effort. You could search yourself using Google and a secured loans calculator to find the best deal but in our opinion your time is best saved by asking a broker to find you the cheapest secured loans and deciding which terms suit you best from there. Yes, they will charge you a fee but this is justified if it prevents you from making the expensive mistake of tying yourself into an inflexible and expensive repayment plan. In the long run, that’s surely worth it!