Mortgage rates fall on worries about global economy

So far this year, the 30-year-fixed has averaged 4.46%, down from 4.54% in 2018

Rates for home loans fell in line with the bond market as a slowing global economy increasingly sent investors to the perceived safety of fixed-income assets.

The 30-year fixed-rate mortgage averaged 4.41% in the February 7 week, mortgage guarantor Freddie Mac said Thursday. That was down from 4.46% in the prior week, the only period in which the popular product has managed an increase in 2019.

The 15-year adjustable-rate mortgage averaged 3.84%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.91%, also down 5 basis points.

Those rates don’t include fees associated with obtaining mortgage loans.

Mortgage rates track the 10-year U.S. Treasury note TMUBMUSD10Y, -1.42% . Bonds have become more attractive over the past few weeks as global growth concerns have persisted. That’s good for borrowers: bond yields decline as their prices rise.

Still, there are headwinds in the housing market beyond the cost of financing a home. Brooke Anderson Tompkins is president of upstate New York-based 1st Priority Mortgage, which had what she describes a “record-breaking” 2018. Between the government shutdown and the Polar Vortex, the new year has gotten off to a much slower start, but Tompkins calls herself “cautiously optimistic” about the rest of 2019.

1st Priority tries to differentiate itself by offering innovative products, like the “Buy Before You Sell” program, which acts like a bridge loan for homeowners who are ready to make an offer on a new property before having closed on the sale of the existing one. Another, “Lock and Shop,” allows consumers to lock in a mortgage rate even if they don’t have a signed contract to buy a home.

In a housing market deeply constrained by lack of inventory, and dogged by the specter of rising rates, Tompkins told MarketWatch that “offering customers alternatives instead of saying ‘we have nothing’ is something that gets us excited.”

Source: By  Andrea Riquier

Head of Saudi Arabia’s SRC: ‘Ask Banks for a Mortgage, and we will Refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.

Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”

Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply.

Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs.

If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.

Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.

Source: Arab News

Rising rates now affecting purchase mortgage application activity

Purchase mortgage applications, which until now were unaffected by the recent rise in interest rates, fell by 4% on a seasonally adjusted basis from last week, according to the Mortgage Bankers Association.

The MBA’s Weekly Mortgage Applications Survey for the week ending April 19 found that total application volume decreased 7.3% as the refinance index decreased 11% from the previous week.
Mortgage apps slide
“The 30-year fixed mortgage rate has risen 10 basis points in three weeks, and is now at its highest level in over a month,” said MBA Chief Economist Mike Fratantoni in a press release. “Borrowing costs have recently drifted higher because of ebbing geopolitical concerns, as well as signs of strengthening in the U.S. economy, including the recent data pointing to robust retail sales.”

Over the past three weeks, refi application volume fell 28%, Fratantoni said. Even with the week-to-week change in purchase activity, on an unadjusted basis, the purchase index is 3% than this time last year.

“The strong economy and job market is keeping buyer interest high, but rising mortgage rates could add pressure to the budgets of some would-be buyers,” Fratantoni said.

The refinance share of mortgage activity decreased to 39.4% of total applications from 41.5% the previous week.

Adjustable-rate loan activity decreased to 6.4% from 6.6% of total applications, while the share of Federal Housing Administration-insured loans increased to 9.9% from 9.4% the week prior.

The paper takes a look at how digital solutions are poised to help lenders fight their way through tough times ahead.

The share of applications for Veterans Affairs-guaranteed loans decreased to 11.3% from 11.6% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 2 basis points to 4.46%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 2 basis points to 4.35%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 6 basis points to 4.49%. For 15-year fixed-rate mortgages, the average increased 3 basis points to 3.87%. The average contract interest rate for 5/1 ARMs increased 4 basis points to 3.92%.

Source: By Glenn McCullom

The death of buy-to-let property is a useful cautionary tale for all investors

Life has become very tough for amateur landlords in recent years.

Tax changes, tighter regulations, lending restrictions – you name it, the buy-to-let property sector has been hit by it.

But one entity is very happy indeed about the squeeze on landlords: the UK government.

How George Osborne killed the buy-to-let property market
When George Osborne was chancellor, one of his most consequential policies was to tax landlords – and property investors in general – a lot more heavily. We’ve written about the measures taken a number of times (you can read the details here, for example). But the outcome was that it became far less profitable, and potentially even loss-making, to own rental property with a mortgage.

This was smart politics for several reasons.

Firstly, it was clear that high house prices had become a potential political liability. For the first time in decades, access to the market was becoming more important than ever-increasing prices to many voters.

Secondly, landlords form a relatively small voting contingent and they don’t tend to generate much sympathy from the wider population. So if, as Jean-Baptiste Colbert, Louis XIV’s finance minister, reportedly put it, “the art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least amount of hissing”, then they represent a very attractive target group.

Thirdly, the move could even be said to be compatible with Conservative political philosophy. If you want to create or maintain a home-owning democracy as opposed to a nation of renters, then you have to stop landlords from competing with first-time buyers. By eliminating landlords’ tax advantages, Osborne levelled the playing field, or perhaps even tilted it back towards first-time buyers.

However, it was also smart on an even more basic level. The changes have helped HMRC to rake in a bumper chunk of tax – not just on landlord income, but on the gains made by those who have now decided to abandon the market altogether.

Yesterday we learned that in the 2018/19 financial year, capital gains tax (CGT) receipts rose by nearly a fifth on the previous year, going from £7.8bn to £9.2bn. That is a hefty boost. And, reports the FT, a lot of that is down to sales by landlords.

You see, by scrapping the ability of landlords to claim tax relief on mortgage interest, the government created at least some forced sellers – people whose rental income simply no longer covered the cost of the property. Meanwhile, other landlords, seeing the change in the political mood music, have decided to get out before the rush.

Yet when they do sell out, they also get caught by higher rates of CGT.

CGT is payable on any profits made on the sale of an asset. You have an annual CGT allowance of £12,000 (so you could sell shares for a £12,000 profit, for example, without having to pay any CGT). But once your profits go above that, you have to pay 10% or 20% (depending on whether you are a basic-rate or higher-rate taxpayer).

But if you sell a second home, the CGT rates are 18% and 28%. And unlike shares, you can’t sell a house in stages. Nor can you keep it in a tax-efficient wrapper (mostly).

So, all in all, a crafty move. Who’d have expected a Conservative chancellor to introduce a wealth tax and get away with it? I’m sure Osborne is kicking himself that he’s not in power to enjoy it, and is instead reduced to editing a local newspaper and juggling seven or eight other jobs just to make ends meet.

One key lesson investors should take from the plight of the landlord pariahs
But anyway. Straight after the changes were introduced, we warned in MoneyWeek that buy-to-let property had effectively been killed off as an appealing investment for amateurs, and that appears to be exactly what’s happened.

There’s also no sign of the landlord crunch slowing down – we haven’t seen the full effect of the tax changes yet, while regulations targeting landlords are only growing more onerous.

What does this mean for you, assuming you aren’t a buy-to-let property investor? Well, the exodus of landlords from the market is one of the key factors behind the current slump in the housing market.

House prices are driven mainly by the amount of money available to buy property (physical supply and demand matters a bit, but nowhere near as much as you would think).

Landlords can no longer afford to pay as much for property, while first-time buyers have fewer resources. So you’ve knocked a chunk of demand out of the market on that front, while on the “sell” side you’ve added – at the margins – a group of near-forced sellers, keen to offload no longer profitable properties.

While it’s still hard to see a house-price crash in the absence of rising interest rates or surging unemployment (these often go hand in hand, in any case), it’s equally hard to see any obvious reason for a massive resurgence if residential property is no longer regarded as a good investment.

I don’t see this as a bad thing, to be clear. We’d be better off with stable or declining house prices – property bubbles and busts are among the most destructive and least productive financial manias.

So that’s one point – if you were still thinking of buy-to-let as a future investment option, I really would let it go.

There’s a second, slightly more philosophical point. I realise that amateur landlords don’t attract a lot of sympathy. But let’s remember that in the early 2000s, having some of your savings in property seemed like a perfectly valid way to invest for the future. Few expected to see the tax or political tide shift so drastically against them.

What’s my point? Never ignore political risk. Governments say that they want us to save for the long term. But every six months to a year (depending on how much of a show-off the chancellor of the day is), they will happily change the rules governing our savings without warning, and without any sense of continuity.

Sometimes these changes are justified, but more often they’re motivated by little more than political mood swings.

It’s one reason that we always suggest that you should have some savings in an Isa, as well as a pension. Either tax wrapper could be targeted by a future government, but at least an Isa is easy to withdraw your money from in a pinch.

Remember: all of this has happened under a centre-right government. What happens if we get a government that doesn’t even claim to be pro-wealth creation?

It’s worth staying informed. Forewarned is forearmed. So on that cheery note, may I suggest you subscribe to MoneyWeek magazine. You can get your first six issues free here.

Source: By John Stepek

House price inflation weakest since 2012: Hometrack

Prices in the capital have marginally risen in the year to March 2019, increasing by 0.1 per cent. Meanwhile, the remaining six southern cities covered in the analysis have all recorded their lowest growth rates since 2012.

The largest yearly decline across all the cities in the analysis was Oxford, falling 0.6 per cent. This was followed by Aberdeen, which declined by 0.4 per cent.

In contrast, Liverpool saw the greatest rise, increasing by 5.7 per cent on a yearly basis. Leicester saw the second largest increase, rising by 5.3 per cent.

Further data shows that average sales volumes were down by 13 per cent on 2015 across the southern cities in the analysis – with both London and Cambridge down by 20 per cent.

In contrast, sale volumes were up to 19 per cent higher than in 2015 in regional cites, according to the report.

Benham and Reeves director Marc von Grundherr comments: “The weakest rate of house price growth in just over six years demonstrates the current difficulties faced by many residing and selling in our major cities.

“City living will always command a higher price premium and while these markets are more susceptible to the influences of Brexit doom and gloom at present, they will also be the first to see a sharp revival.

“While a larger degree of buyers remain on the fence for the time being, the capital continues to be the pinnacle of UK property investment and homeownership, and a prolonged period of political uncertainty will not change that.”

Springbok Properties founder and chief executive Shepherd Ncube says: “It would seem a real-life property fable of the tortoise and the hare is materialising across the UK market.

“The cities to have registered more notable price growth levels since the market crash are now seeing this pedigree subside, whilst the less inflated regional cities are demonstrating some stamina to come to the forefront of the price growth rankings.

“Prices are holding firm for the large part and this shows promise for the market beyond Brexit, if we will ever see such a thing.”

Source: By Jake Carter

Mortgage Body a Tipping Point for Home Financing

Quoting the most recent Central Bank of Kenya’s annual mortgage survey, the high cost of housing units and limited access to affordable long-term finance remain the leading housing market constraint.

It is not surprising then that in a country with more than 46 million people, the survey shows there were only 26,187 mortgage loans as of December 2017, a slight improvement from 24,059 accounts by the end of the previous year.

This represents an 8.8 percent growth or a paltry 2,128 increase in loan accounts.

More worryingly, the number of institutions offering mortgages dropped to 31 in 2017 from 35 in the previous year, which is partly due to the acquisition of two banks but there were two other commercial banks which decided to stop offering the loans altogether.

This is not a position of pride in the 21st Century, and more so for Kenya, which prides herself as being the economic powerhouse of East Africa, a fact that calls for urgent intervention to change the narrative.

Promisingly, the government is shifting its attention to the big housing gap with the Big Four agenda and the plan to add another 500,000 affordable houses is most welcome.

This is indeed a timely proposition and as a leading financial institution, we strongly support it not only because of the opportunity it accords us to grow our mortgage business but also for the resulting social impact as we contribute towards the achievement of sustainable human settlements.

Further to the above statistics, it is important to delve deeper into the reasons as to why we are where we are.

In Nairobi, for instance, developers have mostly concentrated on the high-end areas such as Lavington, Kilimani and Westlands — to mention but a few — to the exclusion of the affordable segment.

In mortgage financing, we are guided by the demand and supply economic principles.

Over the years, however, it has become crystal clear that the supply side of the equation is where the challenge lies, primarily because there have often not been enough units, or the ones available were far too expensive.

Conservative estimates indicate that Kenya is dealing with a backlog of two million housing units, with the deficit growing by 150,000 units every year due to several factors including the limited mortgage and developer finance.

As a bank, for instance, our mortgage offering is based on a customer qualifying for certain limits, but the challenge has always been that while most clients across the industry qualify for houses costing under Sh5 million, they are not available.

These would be ideal for the average working Kenyans paying rent of up to Sh30,000 a month.

The industry has grappled with this dilemma for years and the government’s focus on affordable housing, therefore, presents a much-needed breakthrough, with the winds now shifting downwards to the untapped bottom of the pyramid.

Through the Kenya Mortgage Refinance Company (KMRC), an initiative of the Treasury and World Bank, the government will support the affordable housing agenda by providing secure, long-term funding to the mortgage lenders, thereby increasing the availability and affordability of mortgage loans to Kenyans.

Using the demand-supply ideologies, the KMRC will play on the demand side, while on the supply side, we have the government through the Ministry of Housing, the National Housing Corporation and the private sector developers who will put up the houses.

As financial institutions, we are plugging into the demand side to provide long-term mortgages to Kenyans who qualify to buy these houses.

Over the last two years since the introduction of the interest capping law in September 2016, there has been an increased demand for mortgage loans due to perceived affordability. Under the KMRC, mortgage loans will be priced at below 10 percent, down from the current averages of 13 percent. This is expected to drive demand to unprecedented proportions.

Currently, the main funding source for banks is their customer deposits, which are generally very short-term in nature, restricting the bank’s capacity to lend long-term.

The KMRC is going to remove this liquidity mismatch by providing long-term funding at attractive rates while ensuring sound lending habits resulting in greater availability of fixed-rate mortgages and longer available loan terms.

This will improve mortgage affordability, increase the number of qualifying borrowers and result in the expansion of the primary mortgage market and home ownership in Kenya.


Stakeholders Kick as CBN Raises Mortgage Banks’ Capital

Stakeholders in Nigeria’s housing sector have expressed worry over the fate of the nation’s Primary Mortgage Banks (PMBs) following the N13 billion new capital requirements set for them by the Central Bank of Nigeria (CBN).

Their anxiety stems from the fact that most of the primary mortgage institutions are still struggling to cope with the previous N2.5billion capital base, which had been in existence since 2013.

It was reported that the Central Bank of Nigeria (CBN) would be raising the capital requirements of the PMBs by 73.3 per cent to a total of N13 billion from N7.5 billion in 2013.

A breakdown of the financial requirements of the sub-sector shows that operators of national category of the PMBs are required to shore up their capital base to N8 billion, which is an increase of 60 per cent compared to N5 billion it stood in 2013.

For regional licence (formerly state), operators are expected to increase their financial base by 100 per cent to N5 billion from N2.5 billion six years ago.

The stakeholders that flayed the new capital requirement include Managing Director of OPIC, Mr. Jide Odusolu, President of Real Estate Developers Association of Nigeria (REDAN), Mr. Ugochukwu Chime and Lead Promoter of Abuja Housing Show, Festus Adebayo, who doubles as Managing Director, Fesadeb Communications.

President of Mortgage Bankers Association of Nigeria (MBAN), Mr Niyi Akinlusi and the immediate past President, Mr. Femi Johnson, neither responded to phone calls nor text messages sent to them by our correspondent.
For instance, Affordable Housing Advocates, on their Social Media WhatsApp platform, have not stopped commenting on this issue.
Managing Director of OPIC, Mr. Jide Odusolu, stated that most PMBs had failed to raise the base to N2.5 billion, wondering what would happen now that CBN unilaterally wanted them to double it.
“We will probably end up with maximum of two or three PMIs,” he said.

Chime said that placing a very huge burden on an already risky and unprofitable sector such as the mortgage sector would be counterproductive.

“The day will come when you will look for PMBs to do your transactions and you may find none,” he warned.
He pointed out that policy makers have refused to work on the structural underpinnings of the housing industry, but chose the populist and cosmetic initiatives that compound the industries problems.”

According to him, major challenge was that the mortgage sector was risky and unprofitable; with undefined entry/exit and high regulation, among others.

“Why would any sane investor, after a comparative analysis of other investment outlets, choose the mortgage sector with all its problems overregulation and very low return on investments?” he asked.

“Until government collaborate fully and sincerely with the investors (private sector who take the risk with their lives, time and resources), to undertake a significant restructuring of the transaction dynamics, costs in the real estate sector, resources will continue to exit the sector, and we will continue to give lip service to a self-inflicted malady.”

Corroborating Chime, Odusolu said he realised that a large part of the problem centred on policy makers, who he said were “clueless when it comes to housing.”

By Dayo Ayeyemi

U.S. Mortgage Applications Post Biggest Fall in Four Months: MBA

NEW YORK (Reuters) – U.S. mortgage applications to buy a home and to refinance one recorded their steepest weekly decline in four months as some mortgage rates increased to one-month highs, in step with higher bond yields, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group said its seasonally adjusted index on home loan requests to lenders fell by 7.3% to 425.6 in the week ended April 19. The drop was the biggest since a 9.9% decrease in the week of Dec. 21.

“The strong economy and job market (are) keeping buyer interest high, but rising mortgage rates could add pressure to the budgets of some would-be buyers,” MBA’s chief economist Mike Fratantoni said in a statement.

Interest rates on conforming 30-year mortgages, with loan balances of $484,350 or less, averaged 4.46% last week, marking a one-month peak and edging up from 4.44% a week earlier, MBA said.

Other mortgage rates MBA tracks on average increased from 2 basis points to 6 basis points.

Mortgage rates rose in tandem with Treasury yields last week as investors scaled back their safe-haven bond holdings amid encouraging economic data in China and the United States.

“Borrowers remain extremely sensitive to rate changes, which is why there has been a 28% drop in refinance applications over this three-week period,” Fratantoni said. “Purchase activity also declined, but remains almost 3% higher than a year ago.”

MBA’s seasonally adjusted gauge on refinancing applications fell 11.0% to 1,293 last week. Four weeks earlier, it climbed to 1,786, its strongest since November 2016 when mortgage rates fell to their lowest levels in over 14 months.

The share of refinancing requests versus total applications contracted to 39.4% from 41.5% in the prior week.

The group’s index on purchase mortgage activity, which is seen as a proxy for future housing activity, retreated from a near nine-year high last week.

The purchase index decreased for the first time in seven weeks, slipping 4.1% on a seasonally adjusted basis to 269.3.

MBA’s weekly survey, which began in 1990, covers more than 75% of all U.S. retail mortgage applications.

By Richard Leong

Saffron introduces Limited Company Buy-to-Let mortgage

Saffron Building Society has launched a Limited Company Buy-to-Let mortgage aimed at landlords with multiple properties.

Recent tax changes mean that some private landlords will be better suited to running their investment properties through a limited company. As a result the need for a mortgage to accommodate this situation is set to increase and has inspired Saffron to meet this demand.

The product is for purchase or remortgage up to 75% LTV, can be taken as capital repayment or interest-only and is fixed at 3.17% for two years until 31.10.2021.

Minimum loan is £30,000 up to a maximum of £1 million and the product has a 2% arrangement fee. Overpayments of 10% can be made each year penalty free but there is an early repayment charge of 2% over the two years.

Anita Arch, Saffron’s head of mortgage sales, commented: “With interest rates predicted to remain flat for the next 20 year (according to the Bank of England), many investors continue to see buy-to-let as a solid method to receive a good return on investment.

This said, landlords could be negatively impacted by the current changes in tax law and receive a reduced income as a consequence. Our new Limited Company Buy-to-Let mortgage creates a new option for intermediaries to consider and introduce to their customers to address this.”

Source: By Joanne Atkin

10 ways to get the best mortgage deal – from the experts

Maximise your affordability and bag a great deal by following these top tips

For many first-time buyers and home movers the first question they ask is ‘how much can I borrow?’. It’s often followed by ‘which is the best deal?’

And the answer to either isn’t straightforward.

In today’s mortgage market your affordability is carefully scrutinised, meaning what you can borrow doesn’t just depend on your income. Instead, lenders will carefully check your credit record, your spending habits and your financial commitments.

As for the best deal, it depends on your finances and preferences, as well as your attitude to risk and your life stage.

But with some careful budgeting and the right advice before you apply for a mortgage, you can boost your borrowing power and ensure you get the right deal for your needs.

One mortgage broker – One77 Mortgages – has published its inside tips for homebuyers to secure a great mortgage.

Managing director, Alastair McKee, said: “The mortgage market can be a minefield of jargon, small-print and confusing figures, so it’s no surprise that for many homebuyers and first-time buyers, in particular, the mortgage product they opt for isn’t always the best suited for their situation.

“But with a little bit of research, there are plenty of things you can do to secure a much better deal and make your mortgage work for you, not the other way around.”

Top tips to max your mortgage

Deposit thresholds 
Increasing your deposit by just a small amount can boost you into the next Loan to Value band, meaning a better rate and even potentially less onerous credit scores with lenders. Always work on 5% increments as these are where the best deals are for your price band so based on the current average house price, rather than borrowing 9% (£20,533), stretching the additional few thousand more to a 10% deposit of £22,815 will be far more beneficial in the long run.

Get your personal details in order
If you’ve failed to update documents to your married name, or you aren’t registered to your current home address, the lender’s computer will literally say no as it won’t be able to find you. This is a shortcut route to having your application declined.

Electoral roll
Once your details are correctly registered, register for the electoral roll. You might not know it, but this has a huge bearing on the scoring system of lenders credit. If you aren’t registered it’s another minor little detail that can see you fall at the first hurdle of a mortgage application.

Forward your post
The £60 it costs to have your mail forwarded for a year will be the best money you’ve ever spent without even realising it. This doesn’t necessarily apply to your mortgage but it will save you money. All too often a client moves house and ended up with a default notice on their phone bill or credit card as they’ve not received the reminder and forgot to pay it.

Don’t forget life cover
With the cost required to get on the ladder, many of us can be forgiven for skipping the add ons a broker may suggest. If there’s one cost you don’t want to skip on, it’s life cover. Understandably, many of us today can only get on the ladder with the help of our partners as a joint income is required. However, if the worst were to happen and illness or even death strikes, the lack of any form of protection cover can result in the whole deck of cards coming crashing down immediately. This is the last thing you need in this situation, so make sure your life cover is in place and up to date.

Overpay where you can
If your mortgage product allows overpayments – make them! You would be surprised at how much even a small overpayment can make on a monthly basis when it comes to the total interest over the lifetime term of your mortgage.

Lock it in
We’re currently in the middle of an artificially low, interest rate cycle and mortgage product affordability is close to record lows. Great news but make sure you lock in on a fixed rate mortgage to make the best of the current climate. However, be aware of any 10 year plus fixed rate products. The fee might be great but over the years we’ve seen best-laid plans fall by the wayside and clients are then hit with huge early exit fees if they need to move or pay their mortgage early.

Working overtime
Any overtime worked can be beneficial towards mortgage eligibility but try to ensure that this overtime is consistent as possible. If there are drastic swings in the hours worked, lenders will often work from the lowest figure when deciding your position in the market.

Knock them down
It’s a buyers market at the moment and if you have the confidence, income and deposit, now is the time to get a great deal on a property by negotiating as hard as you can. As many buyers remain sitting on the fence, sellers are having to adjust their price expectations and the best way to reduce your mortgage costs are to get the property you want for a lower price in the first place! The average reduction is about 10% of the asking price, so use this as a benchmark and push for 15% or more.

Credit score
If you’re looking to buy right now and your credit score is no good, then you’ve probably already had a few lenders slam the door in your face. Your credit score is everything to a lender in this day and age and poor payment history or a low score will put you at a severe disadvantage from the offset. Do all you can to cultivate a healthy score starting NOW and as most lenders base their judgement on Experian, it’s worth the small investment to make sure your reading from the same hymn sheet rather than one of the free credit score providers.

Source: By Christina Hoghton

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