Mortgages London | Mortgages in London

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Properties in London are notoriously more expensive to buy that anywhere else in the UK. House prices in the city can make it difficult for Londoners to buy a home in the area they have grown up in when they decide they are ready to invest in a property. Thankfully, new low rate mortgages from the Yorkshire Building Society might make London properties an affordable investment for cash strapped buyers.

The Yorkshire Building Society is the second biggest building society in the UK, and it has been cutting mortgage rates continuously this year in a bid to double the number of borrowers on its books. By making low rate mortgages more readily available, it hopes to attract more Londoners who are trying to get on the property ladder. The product launch means that a further 0.44% has been knocked off all fixed rate mortgages available from Yorkshire.

The new packages include two two year fixed rate deals, for which you will need a 25% deposit. One has a rate of 2.95% and an arrangement fee of £995 and the other has a fixed rate of 3.05%, and although it comes with the same arrangement fee, there will be no charge for valuation and legal costs. There are also two three year fixed rate mortgages available too, which also require a 25% deposit. Arrangement fees are the same as the two year deals but the interest rates are 3.89% and 3.99%, with the higher rate once again in lieu of free valuation and legal fees.

For anyone finding it difficult to stump up a deposit of 25%, the lender has also reduced rates on 85% LTV packages, offering two year fixed rate mortgages from 4.39%. The low rate mortgages will help boost the already booming property market in London and give both first time buyers and those who are ready to remortgage a chance to invest their money wisely.

The latest news about mortgages from London is that in the event of a hung parliament, which is an attractive option according to some voters, mortgage costs could escalate considerably. The prediction is being based on the results of a hung parliament back in 1974 when the stock market fell by 50% in the space of a year. However critics are keen to point out that the current economic and political situation is significantly different now and such a dramatic change in interest rates is highly unlikely.

Needless to say, it has still caused a stir in the industry, and with consumers -especially Londoners keen to secure a mortgage before the balance is potentially upset. The crux comes when we find out what the reaction is overseas to the strength of the GBP; if confidence is lost then interest rates on a mortgage could increase by as much as 10%, pushing the average mortgage repayment up by a noticeable amount each month.

Sensibility dictates therefore that homebuyers should look for a long term fixed rate mortgage, which can be found in the region of 4.5% for five years with an LTV of up to 80%. Although these interest rates are noticeably higher than tracker rates, which can be found for as little as 2% with an LTV of up to 80%, if rates rise as much as predicted it has the potential to be the better option for investors.

Speculation aside, the chances are that in the event of a hung parliament or a change of political party in power, interest rates will change. The affect this could have on those with tracker mortgages is unknown. Even if Labour does remain in power, no one can really know for sure if mortgage interest rates will remain low, or if they will have to be adjusted to narrow the margin of deficit the UK economy is currently experiencing.

There are now mortgages in London that allow Londoners to purchase a property with just 10% deposit. A new fixed rate mortgage from Newcastle Building Society has been launched that offers a 2 year fixed rate mortgage at 6.25% APR with a LTV of up to 90%. This means that to secure a mortgage for an affordable one bedroom flat in London a buyer may only need to raise £12,000 for a deposit.

The 2 year fixed rate mortgage has a 3% early repayment charge and a total of £695 fees which includes reservation and completion. A better deal can be struck with another new product that is fixed for 5 years at 5.39%, but it does require a deposit of 20%, bringing the amount needed for a down payment to £24,000 for a lower end property. The fees are a little more expensive too coming in at £995, and there is still at 3% early repayment charge.

Applications for mortgages in London have been increasing of late, but there are still many people finding it difficult to get the go-ahead after applying, especially first time buyers. It is hoped that these new deals will encourage more Londoners to apply for a mortgage, and hopefully see more accepted, especially with the new lower deposit deals.

First time buyers can also take advantage of the stamp-duty holiday which was recently announced in the budget, which is available on all properties less than £250,000. This is an opportunity to budget easily for repayments on a 2 year fixed rate mortgage without having to worry about stamp duty payments, ideal for first time buyers to ease themselves into a long term financial commitment.

Whilst budgeting for 2 years may help first time buyers, it is essential to prepare for what happens afterwards. If interest rates rise at the same time as being faced with other repayments, the less than prepared could face financial difficulty. It is important to remember that whilst some mortgage deals seem like a bargain, homeowners must prepare to budget differently once terms and rates change.

Home loan deals available to UK residents got off to a positive start in 2010 with both small and large lenders offering competitive deals for mortgages. London properties have therefore become accessible to many people who thought that getting on the property ladder was nothing but a pipe dream. The exclusive deals available to would-be home owners are a result of banks and brokers buying competitively priced mortgage deals and passing on those savings to the borrower.

This means that anyone applying for mortgages in London can arrange a deal to suit their personal financial situation. Whether this is arranging a 2 year fixed rate mortgage of up to 80% of the loan value at 3.6%; or a 3.49% tracker at the same percentage of the loan value but with much lower initial fees, it is up to you the borrower. Of course, before embarking on a finding the right deal available you need to be armed with the knowledge of what is actually out there.

There are several ways to find out the types of deal available. Newspapers, brokers, banks and online are the most common. All of these sources can give you an indication of rates and repayments for all types of loan for London properties, and once armed with this information, it is easier to strike a deal. Interestingly enough, there is another way to borrow money for a mortgage that is often overlooked by buyers, and that is arranging to borrow from friends or family. Ensure that you also speak to an impartial mortgage advisor as sometimes the best deals aren’t available directly.

This type of private borrowing can be cheaper for the borrower and offer the lender a better rate of interest than they are currently getting from a savings account. There are specialist legal documents that can be drawn up to ensure both borrower and lender have the same rights as would be expected in a regular mortgage agreement. A private mortgage of this type has a set repayment schedule, the lender holds lien to the property and can demand full settlement if the repayments are not kept up. In return, the lender cannot foreclose without good reason or demand an early repayment outside the agreed schedule.

To ensure that the deal you strike is better than deals from a bank or building society, use all the resources available to calculate a reasonable figure. This includes limited mortgage options available from banks, the best deals available from brokers and exclusive bespoke deals that can be arranged online.

With house prices currently at a reasonable rate, and job opportunities on the increase, it seems that the people of Britain have a lot to look forward to. During the recent economic crisis it seemed that becoming a homeowner was an impossibility for many due to lack of jobs and lack of lending from banks. According to recent reports however, things are on the up across the UK, and in the UK capital, London in particular.

This means that applications for mortgages in London have increased, a sure sign of the country coming out of the recession. House prices and available work are inherently tied in with the success of the economy, but after the recent faux pas performed by some of the most respected banking establishments, it seemed that hopes of becoming a homeowner were nothing more than a pipe dream for UK residents, especially those living in London. Property prices in the UK city were rising at an almost unbelievable rate, to the point where many Londoners felt they were unable to even consider getting on the property ladder.

As a consequence, applications for mortgages for London properties were either being declined, or worse still being given at such a high rate that going into negative equity in the case of a price crash was an almost inevitable fact for some. As we now know, the slump in the market became a reality, and many people ended up losing their homes, unable to keep up mortgage payments, and unable to sell due to the decline in property prices. Dreams of applying for a mortgage were dashed for most of the population, and for many it seemed like that would be the situation for years to come.

Thankfully, the economic crisis has turned around, and obtaining a mortgage has become a reasonable and achievable dream for UK residents. What is important however in the new light of day is that those who are applying for mortgages in London, and elsewhere in the UK, must remember to understand their own financial constraints. It has been proven that the moneylenders do not have homeowner’s best interests at heart.

The advice for anyone looking for a mortgage therefore is to get all the advice possible from mortgage brokers before considering taking on high payments for a dream home. The economy may be improving, but it will take the vigilance of the public as well as the money lenders to ensure that the future stays rosy for UK residents.