As announced last month, financial claims firms have begun targeting the mortgage market, with their sights fixed firmly upon mis-sold interest only mortgages as a paramount opportunity for a case. But as these firms ramp up their advertising process this week, the Financial Conduct Authority has raised concerns that many would-be claimers may not even have a valid case or could quell their fears through cheaper means.
Over the past 12 months, a substantial market shift towards fixed rate mortgages has picked up, with variable rate options gradually losing their previous attraction. Several factors have added to this movement in activity: the introduction of the Funding for Lending scheme has allowed lenders to vastly reduce the levels they offer to secure mortgage finance. In addition, industry-wide calls to further reduce the base rate have all but dried up since the turn of the year, seemingly leaving one direction for tracker rates to go when the base rate next moves.
Contractor Mortgages Made Easy (CMME) are delighted to announce that there will soon be contract-based mortgage options for all contractor professions, including those with low deposits.
Senior management at CMME have been in extensive talks with a major UK lender at Director level regarding an equal playing field for any Contractor occupation, and have successfully agreed that the same rates and low deposit options currently afforded to IT Contractors only, will be made available to contractors in all professions.
Towards the end of 2012, and into the first quarter of 2013, mortgage lenders have begun to restrict the ability for borrowers to access interest only mortgages as a repayment option for their loans. The move has been made as a reaction to new rules the Financial Conduct Authority (FCA) are planning to implement from 2014, which will see stricter guidelines for mortgage affordability checks employed by the lender.
Figures released this week by Halifax, the largest contractor-friendly lender in the UK, suggest that contractors who have a mortgage have the ability to achieve financial freedom quicker than those who are currently renting.
The figures are based upon the average contractor devoting their entire earnings so far this year towards their minimum mortgage payment. If the average contractor who were renting were to do the same towards their rent, it would take one month longer for them to achieve financial freedom from the ‘roof over the head’ cost for the year.
The credit referencing agency, Experian, has released data that they suggest clearly shows a consistent rise in the cases of fraudulent applications made for mortgages and insurance products during 2012. The figures show that for every 10,000 cases submitted, 38 of these included falsified information, a figure that has increased from 35 in 2011. Perhaps most notably, the number of fraudulent cases has doubled in comparison to that of 2007 when, prior to the credit crunch, there were 18 fraudulent cases recorded per 10,000.
The Bank of England has again held the base rate of interest at 0.5%, maintaining the lowest rate in the history of the base rate for over 3 years. This announcement follows an interesting piece of news coming out of the Bank this week around predictions over what may happen with mortgage rates in the coming three months.
Companies currently marketing themselves as PPI claims experts are reporting that they will aim their sights on the mortgage market, and particularly brokers, whom they believe have sold interest only and sub-prime loans when their clients would have benefited from alternative options. With the interest only method consistently in the public eye at present, due to pressures from the FSA to restrict lenders offering the option on a wider basis, the companies believe that many people will be keen to find out whether they have a valid claim.
Bold steps to relax the regulatory process, allowing new banking institutions to enter the UK market have been introduced this week by the FSA and Bank of England. The aim is to make the process to apply for a banking license far easier than is presently the case. The regulators jointly claim that the proposed alterations to regulatory legislation will help to diminish any existing pressures that new banks may face when applying.
26th March 2013
Help to Buy Scheme & Clydesdale Bank give Contractors low mortgage rates
In his budget last week, the Chancellor announced the most revolutionary boost to the UK housing market since Thatcher’s Right to Buy in the 1980s. The Government has launched an initiative that commits £130 billion worth of mortgage lending to the housing market.