After a long period in which it was impossible to find a mortgage with no deposit, Aldermore has come on the market with its 100% mortgage offer. Good news – it is going to be available to all those who want to acquire a property, including first-time buyers. Bad news – this no-deposit mortgage is going to be available through Aldermore registered brokers, and not directly from the bank. But there are still some conditions that one has to satisfy to be able to qualify for this offer – let’s see what they are.
Mortgage providers are getting tougher by the day about the rates and conditions on which they agree to lend, especially to the first-time buyers.
What is worse, some of them are trying to change the conditions of the already existing mortgages, or failing to respond to the reasonable requests, leaving the customers in a very tight financial corner. But there are ways of fighting back.
Most common abuses that banks and building societies tend to be guilty of:
- cancelling offset facility
- refusing to transfer a mortgage when customers move homes
- making extra borrowing obligatory
- refusing interest-only requests from customers, experiencing financial difficulties
According to a research, carried out by Clydesdale and Yorkshire banks, 84% of first-time buyers are forced to ask their parents for financial support in order to be able to get onto the property ladder. It’s more than double, compared to 2005. Another tendency is that almost half of all first-time mortgages are now taken jointly with a partner or a friend.
Santander’s latest offer in the field of mortgage lending is a switch-to-fix mortgage that allows the customers to take out a tracker rate loan but with a possibility to change to a fixed-rate option later. The change happens without any early repayment charges for the borrower.
With current base rate at its lowest, borrowers are right to try to get the maximum from low interest rates that go with tracker mortgages, but when rates start to rise some time later this year, a fixed-rate option, available without any additional costs, is going to look quite attractive.
Interest rates of fixed-rate mortgages are predicted to fall even further following the news that the Bank of England base rate remains the same for the 26th month running and that a rise is not expected before December of 2011.
Fixed-rate mortgages, offered by major providers, have gradually begun to become cheaper. Compared to March of this year, two-year fixed mortgages have already dropped by 0.08% on average and five-year fixes are now 0.04% cheaper than two months before.
Northern Rock has just announced cutting interest rates on its mortgage deals by as much as 0.57% and ——-, acting through its lending branch Woolwich, has followed suit reducing interest by up to 0.1%.
Experts predict that during this week a number of bigger banks and building societies, as well as smaller lending organizations will also slash their rates in order to compete on the mortgage market.
Those who are looking to remortgage are advised to wait and see what better deals are going to become available in a few weeks. If the most optimistic forecasts turn out to be true, it might be possible to bag a five-year fixed mortgage with interest rates below 4% (current best rates for five-year fixes are around 4.39%).
