That’s certainly welcome news after the uncertainty of 2023 when rates were all over the place.

It created a lot of stress for clients coming out of a mortgage deal with a much lower rate.

Why Have Mortgage Rates Started to Fall?

I think there are two main reasons driving mortgage rate cuts:

1. There has been a reduction in swap rates.  These are the rates that lenders “swap” interest loans between each another and affects mortgage rates we all pay.
2. Many lenders are pre-empting these reductions and competing on price, which is great news for borrowers.

For example, one major high street bank has reduced the interest on their five year fixed rate mortgage deals, with a 60% loan to value, to below 4% which is an important level.

Of course, rates are always subject to change, but this may prompt other mainstream mortgage lenders to follow suit.

Will Mortgage Rates Continue to Fall in 2024?

Like me, your first reaction to this news is probably how long is this going to last?

No one really knows, but many industry experts believe interest rates have peaked and will keep falling in 2024 as inflation pressures reduce towards the end of the year.

Mortgage rate predictions are based on several variables such as swap rates, gilt rates, the Bank of England base rate, inflation, and GDP (Growth Domestic Product).

Inflation

The good news is that inflation has more than halved from a high of 10.1% at the beginning of 2023 to 3.9% today.

However, it’s still almost double the Government’s target of 2% so we still have some way to go.

Forecasts by the Office for Budget Responsibility show inflation falling rapidly between 2024 and 2026, reaching the 2% target by the end of 2026.

Base Rate

More reassuring news is that the Monetary Policy Committee have left the Bank of England Base Bate unchanged for the last 3 consecutive meetings.

This has given the mortgage and property markets confidence that things may settle down this year.

In fact, if inflation continues to fall, they will be under pressure for an interest rate cut.

House Prices

The housing markets seem to have ended on a high in 2023 which is another promising sign.

According to Halifax House Price Index, the average UK house price rose for the 3^rd consecutive month in December to £287,105.

This shows that despite a challenging 2023, the property market is resilient and has got off to a positive start in 2024.

What To Watch Out For

Despite lots of good news, there are some things to watch out for this year.

GDP shrunk in October and if this continues there could be a recession on the horizon. The Bank of England confirmed there is a 50/50 chance of a recession this year and expects zero growth for 2024.

There is also a potential general election this year that is likely to influence economic stability and interest rates.

Are You Prepared?

There are lots of variables that could affect the mortgage markets in 2024.  The important thing is to take advantage of the current trend and ensure you’re prepared for any scenario.

Now is a great time to review your mortgage affordability and borrowing options.

So, whether you are a first time buyer looking to get on the property ladder, a homeowner thinking of moving, or an existing borrower with a fixed rate deal ending this year — get in touch to book a free consultation.

The post What Will Happen to UK Mortgage Rates in 2024? appeared first on Independent Mortgage Experts Ltd.

Shopping online and using video calling to see friends and family has become the new “norm”. Although it has been hugely disruptive and a big learning curve for most people, learning to use this technology offers many benefits. It means that some normality can continue and at least some businesses can keep going albeit at a reduced capacity.

Here at Independent Mortgage Experts we are very much open for business and are continuing to offer expert 5 star advice to existing and new clients. We are offering advice via video link such as Zoom and FaceTime but also over the phone for clients who prefer this option. The advice and service you will experience is the same first class and reliable service you have come to expect so nothing on this front has changed. Because we have adapted our service to you we have been able to continue offering mortgage appointments and advice when you probably need it the most.

How does it work?

Once we receive your query via our contact form or email we will arrange an initial appointment so that we can gather more in depth information about what it is you need and whether we can help. This will either be as a video or telephone call. Please let us know which you prefer when you send us your initial enquiry.

If you have requested a Zoom video meeting you will receive an email from your adviser which will confirm the time and date of your Zoom appointment together with a “join meeting” link which once you click will enable you to access the meeting. This link will automatically take you to the meeting. You will need to select whether you want video access and audio access. Once this has been selected, a video will automatically pop up on your computer or your phone. To exit the meeting there is a button which you can click to enable to leave the meeting. Here is a link to access further video tutorials: https://support.zoom.us/hc/en-us/articles/201362193-Joining-a-Meeting.

Top Tip – when arranging a video meeting with your adviser ensure you are ready 5 – 10 minutes before to ensure your meeting starts on time.

Top Tip 2 – try to have the meeting in an area at home where you wont be disturbed to ensure you fully engaged in the meeting with your adviser.

What are the benefits of video appointments?

Learning to use new video tech may seem a bit daunting at first but once you get used to it you may find it will be your preferred way of attending appointments with your mortgage adviser.

Going forward this way of giving advice will be a common option with many firms. Of course we will always continue to offer face to face appointments as well but for some clients video appointments offer benefits over face to face or telephone appointments and these are:

• More convenient way of meeting your adviser over face to face meetings.
• Maintain more of a personal relationship with your adviser as opposed to telephone appointments.
• Your adviser can continue to certify your ID when submitting sensitive documents to your mortgage lender.
• Ability to maintain ongoing advice meaning you are always up to date with the latest developments.
• You can arrange a meeting with your adviser from anywhere even whilst you are on holiday or out of the country, as long as you have an internet connection.

If you need independent mortgage advice please contact us via our contact us page or email and we will be in touch.

The post How to have a successful mortgage appointment via Zoom appeared first on Independent Mortgage Experts Ltd.

The FCA have also issued new guidelines on how mortgage lenders should treat customers fairly.

This has given many peace of mind knowing that there will be some short term relief. However this has also created a lot of unanswered questions around how this actually works and whether there will be any negative impact to future borrowing ability.

Many high street mortgage lenders have recently set up the processes required in order to deal with customer enquiries however for some its still early days and are yet to implement set procedures. The CEO of UK Finance Stephen Jones advised:

“With enquiries to customer call centres at unparalleled levels, firms are also ensuring they are constantly keeping their websites updated with the latest information, including FAQs, which can help answer many customer queries. We would encourage only those customers who are facing an immediate issue with their finances to call their provider in the first instance. If a customer needs more general help there are a range of different ways to get in touch, including through online chat, social media and mobile and banking apps.”

Due to unprecedented volume of calls and enquires it may take longer than normal to get through to your lender at the moment therefore we have put together a frequently asked question section to help alleviate your concerns and answer as many questions as possible.

How do I apply for a payment holiday?

Although this is changing on a daily basis many lenders have set up a dedicated webpage on their customer site which will help provide some answers to your queries. Lenders are also encouraging customers to apply online rather than calling as the amount of enquires has increased substantially.

What is a payment holiday?

If you take a mortgage payment holiday, this means that you wouldn’t make mortgage payments for up to three months and the lender will add these payments onto your mortgage balance. As a result, your mortgage balance will increase and your monthly payment will be recalculated over your remaining mortgage term. Your monthly payment and the amount of interest you pay will increase for the remaining term of your mortgage.
If your mortgage is not in arrears, the mortgage payment holiday will not impact your credit rating, and you will not go into arrears on your mortgage.

If your mortgage is already in arrears, your options for a payment holiday may be restricted but you may be able to set up a different arrangement with your lender.

Will a payment holiday affect my credit score and my ability to get a mortgage in the future?

Mortgage lenders have confirmed that by taking a Payment Holiday your credit score will not be negatively affected, as long as you are not already in any arrears. Indeed the FCA also confirms that “Our guidance makes clear to firms that they should ensure that taking a payment holiday will not impact your credit score”.

Many customers are concerned about the impact that taking a Payment Holiday could have on the ability to borrow in the future. Although there has been no definitive answer from mortgage lenders about this, if you have been adversely affected by COVID-19 then any payment holiday you have taken should not affect your ability to borrow in the future. Please speak to your lender for more information.

Will the Coronavirus affect my mortgage application and could my mortgage offer be withdrawn?

Although a lender has the right to withdraw the mortgage offer this is highly unlikely. As the mortgage has already been agreed its likely the lender will honour this unless your financial circumstances change. For example if there is a significant change to your income and the mortgage is no longer affordable you should consider whether to continue with your mortgage application.

Assuming there is no change to your income, there should be no change to your mortgage application which will be processed as normal. However the situation with any new application is changing on a daily basis. If you have not yet applied then the situation could be different. Currently a select few mortgage lenders have decided to hold off accepting new applications for the short term to cope with the levels of enquires around the impact of Coronavirus. This should be a temporary solution.

My mortgage deal expires soon, will I be eligible for a payment holiday?

If you are “in between” lenders so to speak and have not yet switched, you can still apply for a Payment Holiday from your current lender. If you have recently changed lenders or about to, the usual standard criteria is that you need to have held the mortgage for a number of months usually 3 to 12 months in order to qualify for a Payment Holiday. Because the situation with the Coronavirus is unprecedented and very unique, lenders may have a flexible approach to this and may waive this requirement. In this situation please speak to the new lender to find out their specific criteria regarding this.

Should I reapply for my mortgage now that the Bank of England Base Rate has reduced?

The Bank of England Base Rate has recently reduced from 0.75% to 0.10%. Anyone with an existing tracker or variable rate mortgage will benefit from a reduction in the rate straight away. If you already have a fixed rate mortgage then sorry to say but you will not benefit from any reduction and your fixed rate will continue at the same rate.

If you have recently applied for a mortgage which has not yet started or completed then you may have the ability to change to a lower product and rate with the same lender. You need to check whether or not there will be any charges applicable to do this.

I am a Landlord and my tenant cant afford the rental payments. What are my options?

The Government has announced that residential buy-to-let landlords are entitled to the same three-month mortgage repayment holiday as residential homeowners if they have tenants struggling to pay rent due to Coronavirus (Covid-19).

The government has also announced that Landlords are unable to evict tenants if they are unable to pay their rent due to the Coronavirus pandemic. Landlords and tenants are encouraged to work together to come to an affordable payment arrangement.

Lenders such as BM Solutions (part of the Halifax group) and The Mortgage Works have already confirmed that they will pass on the 3 month payment holidays to Landlords.

What happens to my mortgage insurance premiums if I take a payment holiday?

Even if you are on a Mortgage Payment Holiday you should continue to pay your insurance premiums as these will not be waived. Your insurance premiums may be waived if you have “waiver of premium” option on your plan and the reason is due to illness which prevents you from working. If this is the case contact your insurance provider to discuss your options.

It is vitally important, particularly due to the risk of becoming ill that you do not cancel your policies or stop paying your insurance premiums as you may need your cover now more than ever.

If you struggling to pay your mortgage insurance premiums contact the insurance company straight away as they may be able to come to some alternative arrangement with you.

I don’t have any mortgage related insurances. Am I at risk?

If you have mortgage and you do not have any mortgage insurance then depending on your circumstances you could be at a higher risk.

Due to the heightened risk of contracting the Coronavirus, some insurance companies have changed their underwriting criteria to include questions around the symptoms of the illness. Please contact us as soon as possible to discuss your own individual circumstances to ensure you are properly covered and protected. If you have not reviewed your mortgage or family related insurances for a while now is the time to do so to ensure you and your family are adequately protected.

Has your service or advice changed since the Coronavirus Pandemic?

We will continue to offer the same efficient and reliable service you have been used to and we are still committed to providing you with the same first class advice going forward and that will not change.

We are following government guidelines closely and with that in mind we have decided only to offer telephone and video appointments going forward until we hear otherwise. When you send over an enquiry to us we usually offer an initial telephone appointment. Any additional appointments will be carried out over the phone or via video link. This will have no negative impact whatsoever as we can provide exactly the same efficient service and advice.

The post Coronavirus – What All Mortgage Customers Should Know appeared first on Independent Mortgage Experts Ltd.