The latest figures have shown a huge increase in the number of people applying for mortgages. In the year up to November, more than 40% more applications were filed than in the previous year. At nearly 90% of the total, by far the greatest number of applications were for short-term mortgages. That is, mortgages with a term of two or three years. During the month of November 2009, some brokers found the number of applications for two-year, fixed-rate and tracker mortgages increased by 10%. This has been attributed to the competitive pricing strategies employed by lenders. The same could be said for remortgaging activity, which also saw a substantial increase in applications; up by over 5% in November from the previous month.

Falling interest rates are making new mortgages increasingly attractive and that’s enticing more and more borrowers to remortgage their homes. Many people are finding that remortgaging offers a far better rate than the one which was on offer with their current mortgage’s standard variable rate. No-matter what the reasoning, it is clear that mortgage lenders are continuing to slash rates in an effort to entice new homeowners and those seeking to remortgage and that means there are a host of affordable deals on the market. Sadly though, some may not be in a position to take advantage of these great rates.

It’s understandable that a homeowner might want to free up a bit of extra cash from the equity tied up in their house. Even without all of those pressing expenses, having that cash available to cover any unforeseen circumstances makes life a lot less stressful when they do crop up. However, putting your hands on a large cash sum to cover emergencies and other sudden costs can prove to be extremely difficult, especially if your credit rating has suffered due to bad debts and missed payments. If you’ve been subject to even more serious debt problems and had to resort to severe debt solutions, like a bankruptcy or CCJ, it can be even more difficult to secure credit from a conventional lender. Your first thought should be to discuss your financial circumstances with a trusted, experienced debt advisor. Harrington Brooks are one of the longest standing financial institutions in the UK and an help you deal with your unsecured debts if you find it a struggle making payments to them.
The specialist debt advisors at Harrington Brooks will be able to give you expert advice on your debt problems.

Although a primary concern amongst individuals in debt is the threat of losing their home, the truth is that the vast majority of people who find themselves in arrears with mortgage payments don’t. In fact, a staggering 97% of homeowners who’ve fallen behind with their mortgage payments over the last two years, during the recent period of recession and credit crunch, actually managed to hold onto their homes and get themselves out of debt.
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New research from a nationwide survey on the mortgage market reveals that UK mortgage borrowers may be in for a rough period. There are fears that higher repayments and declining financial options may become the norm. Especially to one third of the UK population who have become key targets of their lenders and who are now repaying mortgages worth much more than three-thirds of their annual salary.

The researchers found that more than 30 per cent of these people were unsure whether they have proof of their income when they apply for a remortgage with a new lender.

Most borrowers will find it difficult to remortgage this year. The days of easy borrowing may be something of the past and very few lenders are prepared to offer deals to people whom they consider high-risk. These borrowers may have to accept whatever their present lender can offer them when their existing deal ends.

There has been an all-around tightening of lending criteria in the UK mortgage market. This is due to the global credit crunch that has had financial markets in a crisis during these last several months.

Some 30 per cent of respondents have borrowed more than 80 per cent of their home’s value. This is a big cause for concern. Another 15 per cent of respondents have borrowed more than 90 per cent of the home’s value, meaning that these borrowers would be very vulnerable to negative equity should house prices fall even more. Negative equity refers to an asset’s value that is less than the outstanding balance on the loan.

The Department for Communities and Local Government (CLG), Royal Institution of Chartered Surveyors and the Financial Times did research that all point to one thing: house price growth has been slowing down. Mr Richard Brown believes that “these figures shouldn’t be interpreted as scaremongering”.

A small percentage of respondents admitted they might miss mortgage payments during the coming year. A bigger portion – 22 per cent – are prepared to use credit if it means they will be able to meet the mortgage payments.

A recent study attempted to find out how many mortgage products there are. The findings surprised some as there are fewer deals around.

The credit crunch does not bode well for mortgage products, 10,000 of which have been withdrawn. Last summer’s offerings included 15,000 products, but the study revealed that there are now only 5,000.

In recent weeks there has been a withdrawal of nearly 500 fixed and variable-rate mortgages, which means that consumers now have far less choice since the start of the turmoil in the money markets.

Borrowing criteria are being tightened and borrowers are raising their rates. These conditions mean that many households would be unable to remortgage. This will create problems for those households due to come off their fixed-rate deals during the next year. This might force them to stay on with their previous lender, and possibly at a higher rate.

The Newbury, Melton Mowbray and Tipton, all small building societies, mentioned they will only deal with local people.

Sellers who refuse to lower their prices may be to blame for unsold houses that are still on the market. Last month saw an increase in the average house price. However, Rightmove, a property website, confirms buyers were waiting for an average drop of 10 per cent in the asking price. Their commercial director, Mr. Miles Shipside, noted that sellers who enter the market might be ignoring other unsold properties as strong competition, and that they are oblivious to the challenges homebuyers now face.