Mortgages & Home Finance Finding And Managing Your Mortgage

Date Published:

15/01/2009

It’s a frustrating time for anyone wanting to remortgage or take out their first mortgage. Lenders continue to impose high rates on borrowers who don’t have big deposits and ‘ration’ their more attractive deals. But the consensus is that there are decent remortgaging deals available for those with at least 25 per cent or more of their property’s value.

Getting A Mortgage

Remortgaging?
If you are planning to remortgage in the near future, finding ways to increase your equity will make you more attractive to lenders. Melanie Bien of Savills Private Finance, a mortgage broker, says: ‘With house prices falling, a lot of people are finding the equity in their homes is also declining. If you’ve got spare cash every month because your mortgage is coming down, it makes perfect sense to me to try and reduce what you owe.’

Check for early repayment and administration fees if you are thinking of remortgaging. ‘It's a particularly difficult and confusing time for those looking to buy or remortgage. Deals are being repriced and terms and conditions revised almost daily, with some lenders relaxing criteria while others continue to toughen them,’ says David Elms, Impartial.co.uk.

First Mortgage?

If you are a first time buyer looking for a mortgage, unless you can get your hands on a significant deposit, then your solution may lie with co-ownership, like joint ownership (buying with friends or family) and shared ownership or co-financing (multiple loans or gifts to help you on your way). Contact your local council for details of schemes available in your area and check out www.firstrungnow.co.uk for a round-up of the first time buyer scene.

Running Into Trouble?

If you are struggling with mortgage payments, act now! Talk to your lender. You may be able to find ways of cutting your monthly repayments (such as by extending the loan term or deferring payment of interest).

Get free advice. Contact Citizens Advice (08451 264264); CCCS (0800 138 1111) or Community Legal Advice (0845 345 4345).

Avoid going to a ‘specialist’ poor credit broker or commercial debt advice firms. They often charge high fees. Most normal brokers deal with sub-prime mortgages.

The Government has introduced new measures to help those struggling with their mortgages:

Support for Mortgage Interest benefit has been extended to include mortgages up to £200,000 - double the previous limit. The scheme provides mortgage relief to those who are already receiving a means tested benefit, such as income support, pension credit or income-based jobseekers allowance.

A second scheme, aimed at helping people with joint mortgages where one is made redundant, is being finalized to allow householders to defer a proportion of their mortgage interest payments for up to two years.

For information about what schemes are available in your area, contact your local Jobcentre Plus.

Finding A Good Mortgage Deal

Finding a good mortgage deal and persuading a lender to give you a mortgage is likely to get harder still through 2009. If you are looking for a mortgage, use an independent, ‘whole of market’ mortgage broker. It may also give your mortgage request more clout. Visit www.unbiased.co.uk to find local firms.

Do your own research online to check you’re not letting any great deal fall through the net. But be aware that not all lenders operate through brokers and that some use brokers but also offer different deals direct. Some financial websites offer best buy tables (www.moneysupermarket.com; www.moneynet.co.uk) and others offer more interactive comparison services (www.moneyfacts.co.uk and www.moneymadeclear.co.uk).

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