Interest only mortgage better than renting by Finance News Bulletin
- Home
- »Interest only mortgage better than renting
Published: 21/02/07
Nationwide structure Society, the popular UK mortgage lender, today claims that taking out an interest only mortgage is still preferable to renting a possessions, despite increases in house prices House prices have continued to scale this year, with an average house price shape of £169,413 for September This shape sits £13,000 above last year’s: buying a house is receiving more luxurious year on yearNationwide, along with other mortgage lenders, lowered the interest rates on their fixed-rate mortgage loans earlier this month
They maintain that renting a possessions is still more expensive, even if base speed goes up to 7 per centThe group economist at Nationwide, Fionnuala Earley, said: "Just similar to the weather, the housing marketplace was unseasonably warm in September as August's interest speed hike did nothing to cool the rate of house cost inflation Therefore, the rise in interest tax has not deterred house buyers and Nationwide states that it "can still be cheaper to buy than to rent "Today's Most Popular Results Mortgage Enquiry Form require Life Insurance
------ Mortgages - Information Mortgages - Home ------ monetary Services - HomeNone of the information on this website is future to promote any specific mortgage manufactured goods or provide mortgage advice Mortgagescouk is a non-regulated trading name of monetary Services Net Ltd
[Terms & Conditions]more sites:car insurance| house insurance | cheap flights
Visit original article:Related Articles:
Buy-to-let is not dead - just much tougher - Published:14/12/07
When the dotcom boom fell separately at the beginning of the millennium, a flood of cash from private investors poured into property'It has become a buyers' market again and that is high-quality news,' says long-term landlord Jeremy Kent-BaguleyIn a tough market, it's vital to make sure your property can be a sound asset >> Take the buy-to-let testDaily Mail investigates: Buy-to-let schemes have left thousands of people out of pouch > Buy-to-let nightmareBritish mortgage lenders desire us to remove our new house price collide calculator Read more The Editor's BlogDisillusioned by boom and bust shares and encouraged by astound bottom interest rates, thousands hurried to climb aboard the buy-to-let bandwagon Many have made a fortune, but the credit chomp threatens the division Financial Mail examines what the future holdsBuy-to-let is not dead, whatever the headlines say about lessening property values and stricken amateur investorsThat is the loud message from landlord lenders, buy-to-let mortgage brokers and, fatefully, landlords themselves However, there are evilsJeremy Kent-Baguley, 41, has been a landlord since 1986 For the past 12 years he has done nothing but manage his properties, all of which are two-up, two-down Victorian terraced houses in Banbury, Oxfordshire, Oxford itself and Rugby, WarwickshireAnd he reckons that forecast are looking bright right now, for the first occasion in years, because the housing market is weakening'I wouldn't say prices are actually lessening in these areas,' he says 'But it has become a buyers' market again and that is good information I haven't bought any property for the best part of a year There was nothing that worked financiallyThe golden rule for me is that it has to stack up and until lately it didn't' By 'stacking up' he means that the rent from the property has to cover the cost of the mortgage, characteristically 85% of the possessions's valueRising possessions prices and mortgage rates have made that difficult for some occasion Though rents have risen, pushed up in part by demand from migrants and young personnel who cannot afford to pay money for, they have not kept pace with mortgage costsBut with a undecided housing market, opportunities are back, says Jeremy 'The marketplace's as flat as a pancake I know that because for the first time in ages I have agents buzzing me up asking me if I'd be interested in properties on their books I can go in and make low but serious offers and they might get conventional,' he saysLahrie Mohammed, a former shopkeeper from Sri Lanka, is raising money to add to his collection of 150 propertiesOthers inform similar stories Experienced landlord Lahrie Mohammed, 40, who in February told monetary Mail that he was struggling to find appropriate properties in his chosen area of east London, is much better-off now'Prices are not falling quite yet and the penny has still to drop with vendors, but the market is altering,' he says 'We've had signs of downturns in prices before, but they refuge't materialised This time it's for real'And Lahrie, a former retailer from Sri Lanka, is raising cash to add to his portfolio of 150 properties He says spring, when normal seasonal housing dealings resume, will unearth genuine weaknessLee Grandin of Landlord Mortgages, the biggest buy-to-let brokerage, says that for the history two years most of his customers have simply been remortgaging to manage their costs, rather than to release evenhandedness to fund new purchases'But we're seeing a change now, with more money pending out to buy novel properties,' he says He reports one client who this month finished the £150,000 purchase of a repossessed possessions that last year had been sold for £220,000'Experienced landlords who have been inactive for some time and who are session on large amounts of equity are waking up to this sort of opportunity,' he saysHowever, it is a dissimilar story with amateur investors who poured cash into heavily marketed novel properties, often in large developments in regenerated city centresThere is evidence that prices here are plummeting and there are growing fears that many properties were overrated in the first place most horrible of all, rents in this market are weak as clusters of alike properties, usually two-bedroom flats, are available for job simultaneouslyDevelopers have warned that they are struggling to put up for sale new flats and are having to cut prices This is not helping existing owners of similar homes As monetary letters has widely reported, landlords in this market have been badly burnt financiallyGrandin says: 'beginner investors in new-build flats are going to be squeezed Their hire incomes will suffer and their assets values are also likely to be down It's not a good place to be'In a certain sign of darkness, banks and building societies are also pulling back from lending on this type of property Britannia structure Society's landlord lender derivative Platform last month tightened the criteria on new-build lending Since September, UCB Homeloans, part of Nationwide Building civilization, has refused to lend to landlords of novel propertiesAnd auctioneers are reporting greater than before numbers of these properties on their books as lenders take control of properties The credit crunch that wrecked Northern Rock and sent spasms through the whole mortgage industry has hit property-owner lending Many specialist lenders, including GMAC, Kensington and Platform, have struggled to raise cash to lend to landlordsProperty sceptics are predicting a serious slump in the housing marketplace, but will there be a crashShares in Paragon, the quoted lending business that lends only to landlords, have slumped This is ironic because, as one of the most reliable sources of data on the buy-to-let manufacturing, the information from model's customers is positivemodel calculates monthly indices showing returns generated by its clientele, most of whom are professional landlords with more than ten properties to allow According to Paragon, average rents are up 7% in 12 months But yields - rental returns relative to property principles - have been under pressure from rising house pricesThey are averaging 6%, model says, but where prices are feeble, such as the West Midlands or Yorkshire, they are rising powerfullyI am confused by BLT calculations Only new flats are under pressure Then we have a BLT trade at a lower price than the last person I assume then it was now bought at the "correct" height But, if the market is going nowhere where is the gain comingOthers are seeing trade opportunities as they can ask for less on the asking price But in London (a safe refuge for BLT) prices (even if asking prices fall) are still too high ie rental fee not covering interest and no capital appreciation by eg £50,000 on a deposit and so even if the home price rises by speak 2% they make speak £6,000 Such leverage only works in a rising marketplaceLeading on from that, it is lazy investing at best foolishness if the assumption is for no price growth "but they are in it for the extended haul"), as without that leverage gain they are using their equity incompetently I suspect few economists did BLT as they in fact looked at the numbers Ponzi schemes and liquidity driven bubbles rely on ignorance and personalitySelect a loan term 12 months (1 day 24 months (2 years) 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 existencePlease choose a type of insurance Life insurance Home and contents Car Breakdown armed forces Health - medical Health - dental Travel.
Read More: Buy-To-Let Is Not Dead - Just Much Tougher >>Pay 0% On Your Purchases And Existing Debts - Published:27/10/07
The market for credit cards is certainly a competitive one, so you'd believe card companies would be doing everything they can to win your business It may seem surprising then that cards which accuse 0% interest on balance transfers and purchases over the same period are something of a rarityOf all the 0% balance-transfer cards which can be found in The Fool's self-governing credit card search, less than 40% offer interest-free periods on purchases that gauge upIn my previous article, Are 0% Balance Transfers Still Going physically powerful I explained that the interest-free balance-transfer era on some cards has been extended at the apparent sacrifice of evenly attractive 0% deals on purchases But you can still find some cards where the interest-free era runs for the same number of months on bothThese are a sensible option if you're planning to spend on your novel card as well as transfer your balance from an old one This means you won't inadvertently disburse more interest than you should because 'negative payment pecking order' doesn't apply to this type of cardYou may well have come across that term before, but here's a quick recapitulate: essentially it refers to the arrange in which different debts on your card are repaidYou could be forgiven for assuming that, if you have a credit card which charges 0% on your balance move and, say, 159% on your purchases, your monthly repayment would be second-hand to chip away at the most expensive debt first But the huge majority of credit cards don't And when I say 'vast' I denote all but one (Nationwide's)The rest use this costly small trick so your journal repayments are actually used to pay off the cheapest debt -- your 0% equilibrium transfer -- first This income the more expensive debt, the purchases one, stays on your card longer, costing you more interest while earning overweight profits for the credit-card company into the good dealHardly fair, I think you'll agree If you'd similar to to read more about this take a look at Be Careful With Your Credit CardSo to keep away from nasty negative payment hierarchy, here are the six most excellent cards around at the moment for both balance transfers and purchases:The interest-free periods are not quite as good-looking as you would find among the best cards for balance transfers only, and the fees also tend to be a smidge senior, but you won't be caught out by negative sum hierarchy as both sources of debt are dealt with in exactly the same wayThe most competitive cards will still allow you to keep away from paying interest on transferred balances and expenditure for a whole year, which can't be bad But don't not remember once the year has passed the higher APRs will take hold, which for the most excellent cards will typically cost you 14% to 16% in interest each day© Copyright 1998-2007, The Motley Fool Limited All rights kept This material is for personal use onlyput of Reg: England & Wales Company Reg No: 3736872 VAT Reg No: 735 7818 01.
Read More: Pay 0% On Your Purchases And Existing Debts >>House price inflation prompts rate warning for mortgage holders - Published:19/10/07
enlargement in house prices has moved back into double figures, sparking fears about a further base rate go up for mortgage holders, according to the latest statisticsinvestigate from financial services provider Nationwide Building Society has revealed that the standard property value grew by 102 per cent in the 12 months to April 2007, meaning the typical home price is now £180,314To put this rate into context, it is 09 per cent up on the 93 per cent growth reported in the day to March 2007Commenting on the potential ramifications of the news for obtainable mortgage holders, Fionnuala Earley, chief economist at the financial services provider, contended that the store of England's monetary policy committee is probable to increase the base rate"The Bank of England held off raising rates at the start of April, but the speeding up in house prices during the month makes a rate rise on the MPC's financial policy group's] tenth anniversary look like a certainty," she saidSince August 2006, the store has instigated a 025 per cent rate rise on three separate occasions, as many mortgage holders may be all too consciousToday's Most Popular Results Mortgage Enquiry Form Need existence Insurance ------ Mortgages - Information Mortgages - Home ------ monetary Services - HomeNone of the information on this website is future to promote any specific mortgage product or provide mortgage advice Mortgagescouk is a non-regulated trading name of Financial Services Net Ltd[Terms & Conditions]more sites:car insurance| house insurance.
Read More: House Price Inflation Prompts Rate Warning For Mortgage Holders >>