Best Mortgage Deals

If you are looking for the best mortgage deals or remortgage deals at the moment it will pay to keep your wits about you and get out your calculator. What you’ll find is that most lenders are offering fixed rates or more commonly a fixed rate followed by a discounted rate. Add fees into the equation, many of which are around 2% and working out what the best mortgage deals are becomes difficult.

You need to compare like with like to work out the best mortgage deals or remortgage deals for you, but first a little general info:

For first time buyers, whereas 18 months ago you could get away with the odd small credit problem on your credit file and no deposit; today you are generally going to need a clean credit record and a 15% deposit. A few lenders are offering 90% mortgages, but you may find that they accept very few lenders at this ltv level.

For remortgages, again most deals start at 85% ltv with the best mortgage deals reserved for mortgages under 75% loan to value. There are some great remortgage deals around if you have at least 25% equity in your property, many of which include a free valuation and free legals. One thing that is catching people out here is that they don’t have a realistic idea of the current value of their property. As has been widely reported, property values as an average are down by 16% from a year ago, however new build properties, particularly flats have dropped in value by considerably more.

To work out which are the best mortgage deals for your situation, you first need to work out your loan to value (ltv) which is simply the amount that you need to borrow divided by the value of your property. So for example, if you require a mortgage of £150,000 and the property value is £200,000 your ltv is 75%.

Now decide on the time period for your mortgage deal (not the term of your mortgage itself, just this deal). Often you’ll find that the cheaper deals in terms of monthly cost are over two years, however you need to factor in that you’ll probably have another set of costs to deal with after the two years is up. Generally that doesn’t work out to be very cost effective, so I’d recommend looking at deals with a term of 3 to 5 years. Make sure that any deals you are considering do not have extended redemption penalties which tie you in to the lenders standard variable rate for a period of time after the deal ends.

Once you’ve made that decision, calculate the total payments including any fees (don’t forget conveyancing fees if there is no free legals package) over your chosen time period. Compare these totals to find the best mortgage deals.

Welcome to the mortgage blog. This blog is written and maintained by an active UK Mortgage Broker and I’m going to give you every piece of information possible to make the best choice for your mortgage or re-mortgage.

The uk mortgage and property market (for that’s what it is) changed massively in 2008 and will undergo further changes into this new year. One thing is certain, finding the best mortgage deal will remain as complicated as it always was.

Having worked in Financial Services for the last 15 years I thought that I had as good a grasp as anyone re. the ups and downs of the property market, but like everyone else I was surprised by the depth of the problems that began to unravel in August 2007.  Now we  find ourselves in a world where Northern Rock has gone from being the fastest growing mortgage lender in the country to basket case (and back to active lender again), the mighty Halifax reduced to getting out the begging bowl and once profitable mortgage packagers struggling to survive.

Here’s how I see the situation for 2009. UK property prices will continue to fall after dropping by 16% in 2008 taking the average house price back to 2004 levels. I’d be surprised if we didn’t see similar falls this year and less than surprised if the market saw a real crash.

The reason for continuing doom and gloom in the property market is the fact that the banks are unwilling to lend at more than 75% loan to value and I do’t blame them. If I ran a bank and thought that property prices would probably fall by 15% this year, even lending at 75% ltv means I’m really lending at 90% ltv by the year end.

Add to that the problem of a whole swathe of prospective property buyers called first time buyers who’ve effectively been taken out of the market due to the requirement for a 20% deposit and you have a property market that is unsupported at the bottom end.

Expect then another 15% fall in property prices in 2009 followed by a period of stagnation in 2010 asd perhaps the beginnings of an upturn in 2011.

Stay tuned for real examples of how to steer yourself through this problematical time and find the best mortgage deals for your situation.