Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi I'm with C&G and I have had all the rate cuts passed on to me every month, I'm on a variable, Melanie advised me of this in Sept 08 when I came out of my fixed rate. I have seen the benefit my mortgage is £300 per month cheaper and I have converted it back to repayment for interest only.
My IP is aware or this and is great. The rate cut balances out other cost which have increased.
I know some people must feel very negative about the cuts but its helped me and my family. Its sad when people use such negative energy when it does not suit there circumstances. I have no wish to offend but found some comments on the forum quite strong on what is usually a really positive. [:I]
On the slow safe road to success. Personal thanks to Melanie Giles Kallis Skippy Elv5 and all the other wonderful forum friends.
If your additional expenditure is coming from your saved mortgage interest that's good for you.However, OAPs or savers (ratio of 7 to 1 to debtors)who saved all their lives and who don't own any money are taking a a savings hit. I have sympathy for that group as they did not have any part to play in creating the credit crisis but are 'victims'.
Its is a fact that as mortgage interest rate drops so does savings.Banks have to square the profit books.People who did not own money like OAPs should not be overlooked.
Bear in mind that if we want a sick economy for life and live on deflation then 'Yes' wish for 0% for live. Not a choice I would vote for and would vote against
For once I am able to give a bit back here! I'm a mortgage adviser and many mortgages are now on bank rate trackers. These mortgages will see an almost immediate reduction as it's part of the mortgage contract. For those on discounts and Standard variable rates most will see a reduced reduction because the actual "swap" rates at which lenders lend to each other haven't come down as much, and probably won't. Mutual Building Societies also have to balance the needs of the borrower and the saver.Those on annual review mortgages won't see any effect until the financial year end and, of course, fixed rates are unaffected.
The main problem with the market is that lenders are being very cautious and there are very few deals attractive (or even available)to the first time buyer unless they have a substantial deposit. This has killed the movement of property as every chain needs a ftb or an investor. Until the market is stimulated with new lending the market will be stifled, building work will stay dormant, home improvements will be put off and banking/broking/building supply/diy/estate agency(etc etc etc)businesses will stagnate or go bankrupt.
In terms of remortgage deals that market is struggling too. Unless theres 30-40% equity in the property I am finding that most mortgagors are actually better off staying on Standard Variable, or the equivalent follow-on tracker rate, than include arrangement fees into a new deal which might be worse or only marginally better than the rate they would otherwise be on.
Bottom line, banks are hanging on to the business they have and aren't seeking out any but the very lowest risk new business and that's killing the market and costing jobs.
What the government/Bank of England are doing grabs the headlines, makes it look like they're pulling out the stops but in fact it's futile. The power is with the lenders and only when they get their respective houses in order will there be any improvement.
I get knocked down
But I get up again
You're never going to keep me down
That is a great post Robert - the first bit of information about all of this that I have actually read that I understand!
From a purely personal position, do you think that tracker mortgages will stay around? I have a fantastic deal with IF at the moment, but it is due to expire in September this year - apr of 1.54%, and I would love to move to a similar product. Any chance do you think?
Hi Melanie. Thanks for your advice in other posts they have been really helpful.
With that APR are you on an offset deal? They are still around and the overall cost is affected by how much the offset facility is used.
For what its worth, there may well be tracker deals about, but the trend has been to increase margins. For example 18 months to 2 years ago it was possible to get trackers BELOW bank base rate, now even with a sizeable amount of equity the margin is more like +2% with arrangement fees up to 2% of balance (for a mortgage of £150,000 thats £3,000).
This low bank rate won't be around for ever so September might even be a good time to consider fixing.
However if you are offsetting that would be worth continuing whether it be on a fixed or a variable rate deal.
Last edited by robert25 on Fri Jan 09, 2009 9:42 am, edited 1 time in total.
I get knocked down
But I get up again
You're never going to keep me down
As you are a Mortgage adviser, I like to ask you a question that I am sure many on this board would like to know.
With the demise of subprime lending,what are the chances of getting a cheap mortgage after an IVA in the next 2 or three years.And which banks do you know are still offering these deals or set to open up these deals?? Would having a deposit remove the bias?
My fixed rate comes to a end in the next few months. As I did a F&F IVA it will be on my file for some years yet but I have been told my a few brokers/lenders that once it has been completed a year it will give me a better chance of getting a good fixed rate. Still have a fair bit of equity in the value of my home. So once I manage to find a new fixed rate I let everyone know. As always the rate you get depends on your credit file and how much you want to borrow ect.
Hi kalla.
Sorry to say the sub-prime market is almost non-existant at the moment. With a 25% deposit/equity and a 3 yr old IVA you might get a deal with Birmingham Midshires but rate wold probably be around 9%. That would of course depend on overall credit rating and other factors.
The bigger the deposit the better the deal is the usual rule of thumb.
Last edited by robert25 on Fri Jan 09, 2009 11:54 am, edited 1 time in total.
I get knocked down
But I get up again
You're never going to keep me down
