AToM Mortgage Blog

A customer visited AToM last week to arrange a mortgage for their new property purchase. We obtained an agreement in principle, subject to the lenders normal underwriting, and the clients left ‘very happy’ with the speed at which this agreement was obtained. However, they still had to sell their own property. Most lenders “agreements in principle” are valid for anything between 30 and 90 days. The client left the office content in the knowledge that they had a new mortgage in principle and could confirm this to the vendor’s agents. Their own property was placed on the market the same day. This is usual practice and we then awaited the clients further instruction with regards to proceeding, once sold. The following afternoon, we had a call from the customer confirming that they had received four viewings that day and had accepted an offer nearly ten thousand pounds more than the asking price! One day on sale, two offers and one accepted! Proof, locally, that the market is returning especially if the property and, more importantly, the price is right. Consumer confidence is rapidly on the increase, a lot more properties are on the market and as mentioned above, they appear to be selling!

I attended a product launch in London last week and one of the points of particular interest was the predictions on where the Bank of England Base rate will be in the next 12 to 18 months. Some large banks and building societies contributed to the predictions, including luminaries such as Goldman Sachs, HSBC and Nationwide. The general consensus was that, as we expect, BBR will rise in this time period. The lenders in-house specialists, economists and analysts have predicted that by the end of this year, the BBR will be 1-1.5% rising to around 3.5% by the middle of 2011. Interestingly, despite the same people being unable to predict (in advance) the recession or duration of the ensuing market turmoil, these predictions may just be worth taking note of and maybe a short term tracker rate is worth a look after all….

Labels: all types of mortgages, bank of england, consumer confidence, mortgages

The snow invaded and the UK ground to a halt! Although good fun and great to see, the underlying effect amounted to some £3.5bn in lost revenues to businesses, experts have predicted. Add this to an increase in insurance claims (myself being a snow accident statistic!) and you quickly realise it’s been an expensive week. But at least some are spending; the sale of 4x4 vehicles locally seems to have increased!!
More positive movements over the last week with a noticeable expansion in 'sold' signs around the local area and a further Bank of England Base Rate(BBR) reduction to an all time low of 1%. The latter greeted with both applause and despair! Great news for those on tracker mortgages, but bad for the economy. With lenders Standard Variable Rates decreasing, those coming to the end of their fixed rate periods need not move mortgages or lenders. However, we need this to happen so money moves between lenders to get the economy flowing again. Plus, the banks aren’t always passing on the full base rate cut; one rather large (government owned) institution only reduced their rates recently by 0.19% and not the full 0.50%!
Don't ‘panic buy and move’ your mortgage. You may be on a fixed rate and eyeing up some superb tracker rates on offer, but will it put you in a better position? Your current fixed rate may have a redemption penalty, so will cost you to change. It is also likely that a new tracker rate will have a large arrangement fee and tie you in for a few years. It’s unlikely that BBR will remain low for long as there’s the small matter of £228bn lent to the banks, that needs paying back. Guess who’s going to be hit for that!? Thus, check before you do anything abruptly. For free mortgage advice, speak to AToM…

Labels: AToM, bank of england, lenders, mortgages