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Finding Best Loans & Mortgage Providers

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Before you begin, there are important issues that you need to understand:- how mortgages are regulated and sold. There are some things you need to know and consider before you can go out looking for a mortgage.
It is a requirement of Financial Services Authority, the regulatry body in UK, where lenders have to provide you a document or fact sheet, namely keyfacts. It is adviseable that you read the keyfacts prior to entering into a mortgage contract and/or choosing a mortgage broker/financial advisor. The keyfacts outlines the features of the mortgage product, the cost and type of service you are being offered. This document will also assist you to compare mortgage products or services from different lenders. Also, ensure that the company you are dealing with is authorised by the FSA. If they are not authorised you will not have access to complaints procedures and compensation schemes if things go wrong.

Basics to consider when choosing a mortgage lender: -

Reputation, customer service and trust
After all, you have to deal with this lender for many years to come! - Use recommended sources of potential mortgage lenders or brokers - Publications - Many publications (newspapers - especially Sunday papers, magazines, internet articles, ezines etc) these days publish financial and money editorials. Read and refer to them as many times they rate mortgage and loan deals from various banks and lenders. One such magazine we can recomend is Which? magazine. 30 Days Free trial to Which? magazine - Click Here.

Mortgage
A mortgage is simply a loan with your house as security. How much you can borrow depends on your income (or incomes, if there's two of you) and your regular outgoings. So start by working out what leaves your account every month.

Type of Mortgage
There are two basic types of mortgages: repayment and interest-only. With a repayment mortgage your payment to the lender gradually pays off the amount you've borrowed plus the interest. Your mortgage is guaranteed to be paid off at the end of the mortgage period. With an interest-only mortgage you just pay off the interest over the term of the mortgage, which means you need to have a way of paying off the capital (the amount you originally borrowed) at the end of the mortgage period. Usually, you plan to build up a fund in parallel (like a stocks and shares ISA) that will do this. In the past, a popular way of doing this was through an endowment - a low-cost savings plan - but poor returns on these have put them out of favour.

Interest Rates
Are they competitive? The other major factor is the interest rate you pay.

Standard Variable Interest - Most lenders follow what's called a standard variable interest rate (SVR), which rises and falls in line with the base rate (the interest rate set by the Bank of England for lending to other banks). The SVR is usually about 1% above the base rate. To attract you, most lenders offer special deals at better rates, usually for a set period of time. You can compare these deals by looking in the money sections of newspapers (especially Sunday papers) and on mortgage comparison websites. These deals take different forms: - Discounted rates. The lender's SVR is reduced by a set percentage for a fixed period. So if the deal is 2% off an SVR of 6.75%, you pay 4.75%
Base-rate tracker - The interest rate you pay is set at a margin just above or below the base rate and moves in line with it
Capped Rate - The interest rate is guaranteed not to go above an agreed capped rate, so you know your maximum monthly repayment. If your lender's standard rate goes lower than the capped rate, you'll pay less.
Cashback - The lender gives you money back in a lump sum or regular payments. This can be handy for moving costs but may not get you the best interest rate
Fixed rate - Most lenders also offer fixed-rate mortgages, where the interest rate you pay is set for an agreed period such as two, three or five years. The advantage is that you know exactly how much you'll repay each month, so it's easy to budget. But if the base rate falls below your fixed rate, you won't see the benefit.
The offset option - Current account and offset mortgages link your current or savings account with your home loan, so any money in these accounts goes to reducing your mortgage and interest debt. They're worth considering if you're very organised with your money, have savings, and aren't likely to want to keep switching mortgages to get the best deal.

Other Costs
Other costs like mortgage fees, early redemption and penalties. Lenders don't want to make it easy for you to run off to another special deal as soon their offer period is over, which is why they often impose penalties on borrowers looking to remortgage. Always check the small print to find out what you'd pay if you wanted to switch or repay the loan early. Some lenders offer penalty-free mortgage deals, but the pay-off may be a less competitive interest rate. It's also worth comparing set-up charges, since many lenders offering special deals charge an arrangement fee/application fee/reservation fee of up to £700.

Insurance - Do you need it?
Mortgage payment protection insurance (or accident, sickness and unemployment insurance) offers peace of mind by guaranteeing that your mortgage will be paid off if you can't work following an accident, sickness or unemployment. Rates vary enormously so shop around; don't just opt for your lender's policy. Most policies only pay out for a limited period, usually 12 months, and then only to a set maximum amount. If you have enough savings to cover a year's mortgage payments, or if you would get decent sick pay from your employer, it could be an unnecessary expense. More here.....

Remortgaging

A mortgage is probably the biggest financial commitment we'll ever make, but once the deal's signed it's tempting to forget about it for good. Yet lenders are constantly creating new mortgage products and there are some fantastic offers to be had. Whether you're remortgaging to get a better long-term deal or to free up some cash, we have outlined below some points that may assit you in checking that your mortgage is a good deal and how to change it if it isn't.

Documents
Gather all documents like your latest mortgage statement, the terms and conditions document etc. Make a note of your lender's phone number, too. Sometimes it's easier to call them than to dig through the small print. You'll need your account number handy when you speak to them.

Your current deal

From the documents in front of you, write down the following numbers:

The interest rate
The balance on your mortgage
The time left on your mortgage
The expiry date of any fixed or discount rates

If you're paying the standard variable rate on your mortgage (which is likely if you've had it a while), there's a good chance you could save some money by remortgaging.

Similar mortgage

Do you want the same type of mortgage? You don't have to replace your mortgage with the same type. If your circumstances have changed, perhaps you want to be able to pay off lump sums, or predictable monthly payments have become more important, take the opportunity to look again at your options.

Hidden cost

Check the hidden cost of switching. Many mortgages come with early repayment charges, to put you off moving. This will often be a certain number of months' interest, or a percentage of your mortgage balance. For example, a 1.5% charge on a mortgage with £100,000 left to pay would be £1500. Your existing lender can send you a redemption statement (some will charge for this). This tells you how much it would cost to pay off your mortgage on a particular date, including charges. This is the amount you'll want to borrow on the new deal. Your new mortgage will also come with some fees. When you work out your costs, include:

Arrangement fees
Valuation fees
Any higher lending charges Some lenders will waive arrangement fees for people who are remortgaging, and might also offer to pay your legal costs.

Time it carefully
Early repayment charges are usually highest in the first few years of a mortgage: check to see if waiting a couple of months could mean you pay less, or avoid them altogether.

Other better deals

Use online mortgage tools to see if you can get a better deal. Don't just look for lower monthly payments; the interest rate is the key figure for long-term savings. Make a shortlist of two or three deals that look good and get the lenders to send you more information. You haven't committed to anything at this point.

Refer to your current lender

If you've got a pretty good mortgage deal already, then congratulations! Even if it isn't quite the cheapest, you might decide that avoiding early repayment charges and a bit of paperwork means it's not worth switching just now. If you've tracked down a better deal, it's always worth talking to your current lender to see if they'll match it. They might even offer to move you to a cheaper product of their own and waive the fees if it means keeping your business.

Finally, first steps towards saving money

If if have chosen a new mortgage, the go ahead and complete the application form from your preferred lender and wait for them to send you a formal offer letter. If you're happy with the offer, sign and return it.

Buy-to-let mortgages

A buy-to-let mortgage is a loan you take out to buy a property which you intend to rent to tenants. The mortgage might be a second charge on your own home or, more usually, it is secured against the property to be let. It is a long-term investment which you hope will generate an income from rents and a capital gain when you sell the property. But there is no guarantee that you’ll make a profit on your investment.

Amount you can borrow

The maximum you can borrow is usually linked to the amount of rental income you might expect to receive. For example, a lender might require the projected rental income to be 30% higher than your mortgage payment. Typically, you’ll need to pay a deposit of around 20% of the value of the property.

Types of mortgages available

You can have either a repayment or an interest-only mortgage. If you choose an interest-only mortgage, you should think about making capital repayments when you can afford to do so to reduce the amount you’ll need to repay at the end of the mortgage term. You might feel this is unnecessary if you intend to sell the property to repay the mortgage. However, bear in mind that, if house prices fall, you might not be able to sell for as much as you had hoped. And you will have to make up the difference if the property sells for less than what you owe - a risk that increases, the higher the percentage you borrow. If you sell for a profit, you may have to pay capital gains tax. Don’t forget that with a variable rate mortgage, your costs will rise if interest rates go up, eating into - or even wiping out - your income and profit.

Some risks of buy-to-let

Costs rise unexpectedly
Property is empty for longer than you had expected
House prices do not rise as much as you had expected, or fall
Poor location Property is in poor condition
Bad tenants

How it might affect your buy-to-let investment

For example, the mortgage payment rises, you have to make major repairs to the property, you employ a property manager and his/her fees rise, and so on. As a result, your income and your profit are reduced.
Your total rental income for that year is lower than you had expected. At the worst, you may receive no income for several months and have to cover your mortgage payments and other costs from your savings.
The after-tax gain you make when you sell the property is less than you had planned or you even make a loss. At the worst, the proceeds from the sale might be too low to repay the mortgage in full.
There is little or no demand from tenants in the area where you buy, so it stands empty for long periods or the only way to get tenants is to charge a lower rent than you had planned. Either way, your income is reduced.
Tenants do not want to live there or you have to spend large amounts bringing the property up to an acceptable standard. Either way, your income (and so your profit) is reduced.
Tenants may damage the property, fail to pay rent on time, or upset neighbours. This may increase your costs, reduce your rental income and lead to a need to evict the tenants.

What You can Do

Consider a mortgage with a fixed rate. Your payments will not go up even if mortgage interest rates rise
Be realistic: when planning whether the project is feasible, build in a margin for extra costs and maintenance
Be realistic: when planning whether the project is feasible, build in an allowance for empty periods
Consider employing a letting agent to find tenants. Do not take on a bigger mortgage than you can afford
Be aware from the outset that there is no guarantee you will make a profit when you sell the property
Be prepared to put off selling the property so you can ride out any slump in prices
Take a repayment mortgage, so that you are paying off the loan as well as paying interest
Do your research before you buy - for example, talk to estate agents, visit and check the distance to shops, local schools, public transport
Employ a letting agent to recommend suitable properties - tenants won’t necessarily want the same type of property as owner occupiers
Do your research before you buy - get a survey of the property - bear in mind older properties have higher maintenance costs
Employ a letting agent to recommend suitable properties and give you an idea of the rent you might expect
Vet potential tenants, including taking up references. If you do not have time to do this yourself, employ a letting agency
Let the property under an assured shorthold tenancy. This lets you evict tenants on two months’ notice with a minimum of fuss. Most lenders will insist you use this type of tenancy agreement.

Further information about buy-to-let

Council of Mortgage Lenders
Tel: 020 7440 2255; www.cml.org.uk Buying to let; Thinking of buying a residential property to let?

Office of the Deputy Prime Minister
Tel: 0870 122 6236; www.odpm.gov.uk
Booklet 97 HC 228 B Assured and assured shorthold tenancies: a guide for landlords

Inland Revenue Local tax offices (see Phone Book) www.inlandrevenue.gov.uk
IR150 Taxation of rents - a guide to property income CGT1 Capital gains tax - an introduction

The Association of Residential Letting Agents Tel: 0845 345 5752; www.arla.co.uk

Residential Landlords Association Ltd Tel: 0845 666 5000; www.rla.org.uk RLA Information Pack

Second Mortgages, Secured, Unsecured & Bridging Loans

Many banks and lenders are happy to lend money for certain purposes secured on the colleteral of your home by way of a second charge. The rates vary from lender to lender and offered on longer term basis, up to 25 years. A prudent lender like banks may want to know the purpose of the loan. It could be a business loan, or to buy car, holiday etc. Some lenders lend for any purpose or for to repay expesive borrowings like credit card debts, often termed as debt consolidation. Most lenders tend to restrict the overal total borrowing, i.e. first and second mortgages, not to exceed 70% of the value of the house. Say, your house is worth £250,000 and you have a first mortgage of £100,000. The maximum you can borrow by way of a second mortgage is £75,000. There are other lenders who may lend higher, however, their interest rates do not come cheap. Remember, before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Unsecured loans or personal loans are loans where lenders have no colleteral security. These loans are offered on higher rates, and in UK there are many lenders. All these lenders have websites and in most cases you can apply on line.

Bridging Loans

This is a short term Bridging Loan. In the event you need to acquire a property (commercial or residential) immediately before any property dealer grabs it, such loan is handy. You have no cash and to generate cash you have property to sell, for which time is the essence. Until the time your property gets sold, a bridging loan is made available in order you can aquire the new property. The loan is secured by lender on the property you already own and is for sale. Usual lending criteria is 65% of the bricks and mortar value of your property. Due to shorter duration of loan, commonly up to 6 months, higher interest rate charge is payable. Many lenders offer such facilities and therefore, it is advisable to compare different loan packages to obtain lower interest rates. There are no monthly installments involved and only interest is paid during the bridging loan duration. When your property is sold, the principal amount of the loan is repaid. Such short term bridging loans can be made available to the needy borrower within 24 hours. Quick and fast decision is one of the prime attraction feature of the loan. In conclusion, such bridging loans provide the required finance at the right time when you are looking to secure an acquisition of a new commercial/residential property. Also such loans can be useful to cater for auction purchases, capital raising, Investment, Refurbishment, Refinancing and speculative deals. You can find many Bridging Loans providers on the internet. Spend time to surf and visit many such wesites. Make comparisons as regards to interest rates and other conditions. Get the the best.

Bad Debt Bridging Loans

Bad debt bridging loans are secured form of loans. The collateral here is the property being sold. Lenders are ready to accept the following as the collateral:

residential properties
commercial & semi-commercial properties
auction properties
development sites
buy to let properties
retail shops
land with planning permission.

If the sale process is already initiated while applying for the loan, the loan will be termed as closed bad debt bridging loan, otherwise it will be called as open end bad debt bridge loan.

Borrowing is restricted to 70 % of the bricks and mortar value of the property being sold. If your property is already mortgaged, the amount of debt is deducted from this amount. The repayment period goes up to a maximum of 2 years for a bad debt bridging loans. These loans allow the people with bad credit to easily get the approval as these loans are no credit check loans. Individuals and companies, CCJ's and arrears, discharged bankrupts, IVA's, self-employed etc

Mostly used for buying property, a bad debt bridging loans can be used to cater any of your personal but immediate purpose which could be acquisitions, auction purchases capital raising investment property, refurbishment refinancing and/or speculative deals. You can search through dozens of online loan websites that may offer you free online quotes. Many sites have comparison tools that could help you in finding a loan deal and you can easily apply for the bad debt bridging loan. .

Repair Credit Score through Bad Credit Car Loans

Credit problem is common these days. If you are one of the victims of bad credit and also facing problem in availing loans from the financial market to buy a car, in such condition bad credit car loans is best option for you. Bad credit car loan is the product of the bad credit market fund which is especially designed to cater all people facing debt problem. Bad credit car loan also help the people in re-establishing their credit score by making duly and timely payments.

Important:
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Disclaimer:
Information provided here does not constitute financial advice and should not be used as such.

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Welcome to Shainik Financial Services, United Kingdom

Finding Best Loans & Mortgage Providers

Compare Mortgage Deals

Second Mortgages, Secured, Unsecured & Bridging Loans

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