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Blog and News -
Mortgages
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Written by John Angeletta
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Monday, 05 July 2010 10:59 |
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France ~ 100% loans PLUS Stamp Duty Paid!
Some French mortgage lenders have just entered the market with 100% Loan-to-Value mortgage product and with the new incentive of Stamp Duty paid and tax concessions you can save up to 8% on the property purchase. Add to this our 25%BMV deals and we predict an imminent boom in French property purchasing by us Brit's. For example, we have listed a 4-bed, 3-bathroom townhouse, overlooking the river Aulne in Finisterre, Brittany, for 75,000 Euro (£62,000 at 1.21 euro to the pound), saving 25% of Market Value before the NEW incentives are applied.
If you are interested in buying in France, check out your status first with Alan Ward at Award Mortgages T:07980-275209 or email
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. For the 5th consecutive year, International Living magazine has reported France as the NUMBER ONE (out of 30) country to live in taking into account such factors as safety, lifestyle, cost of living, and house prices etc. so whether you are looking for that second home in a tranquil countryside or beach setting or, the bustling metropolis, France offers just about everything. Brittany for example, is the land of a thousand legends and France's most westerly region. With easy air and transport links you are no more than a few hours away from the UK as passenger or driver. The countryside is full of little cottages built of stone and slate with the gray granite walls enhanced by the golden splash of heady-gorse or the cloudy blue of a mop-headed hydrangea.
But it's not just the architecture that suggests Brittany (Bretagne) is a land apart. With the peninsula thrusting into the Atlantic like the head of some bizarre sea monster, this is where France seems to fade out and the bewitching Celtic world takes over: if you like Cornwall, you'll love Brittany! No place in the department (region) is more than an hour's drive from the ocean, which offers clear, aquamarine seas, stunning rock formations, secret bays, huge expanses of sandy beaches and, little harbor towns, which in a former lifetime were feared as pirate strongholds. You can go inland and enjoy lakes, forests and moors. Or, as you meander down lanes, you are taken back-in-time as you visit numerous secluded villages and hamlets always greeted with traditional hospitality.
In this time-lagged land you will feel the easy, carefree pace of your childhood, enjoy the warmth of the local people and partake of Kouign Aman (a sweet sticky traditional Breton cake) with strong French coffee. Lay back, stretch, and breath in lungfuls of fresh, clean Ozone. Do call to chat your options through.
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Blog and News -
Mortgages
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Written by John Angeletta
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Tuesday, 25 May 2010 12:56 |
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Buy-To-Let Market Is Fighting Back
The number of Buy-To-Let mortgage approvals has grown significantly since its lowest point in Sept '09. According to Moneyfacts, the number of available BTL products is up 41% to 304 available schemes. Two major lenders returning to the BTL market during the past two-weeks.
Darren Cook, spokesman for Moneyfacts.co.uk, said: This is encouraging news for investors, especially those who were locked out of the market as the maximum available LTV fell. Competition has returned to the market, as lenders make cuts to their new borrowing rates.
Yet, Cook warned that the predicted changed to capital gain tax (CGT) could put the BTL sector's recovery at risk. He said: Government sources predict that CGT on non-business assets, including buy-to-let properties, could rise from 18% to a figure that could be as high as 40%. In a separate blow the annual exemption limit for CGT, currently £10,100, may come down to as low as £2,500. This will bring hundreds of thousands more people into the tax net.
One possible consequence could be an increase in the preferred investor properties on to the market as people scramble to take any current gains. The changes could spark a downward price spiral, but could create opportunities for both homebuyers and potential landlords [underline added].
What We Say ~ The figure of 304 current BTL products represents c.10% of the total number of schemes available in Aug '07, and we feel it is unlikely we shall ever see thousands of choices again. This said, higher loan to values are more common than before with 75%, even 80% LTV's for the squeaky clean applicant(s). In Sept '09, almost 1:3 BTL deals max'd out at 60% LTV. Today, 4:5 mortgage approvals are for 75%LTV or higher. In addition, lenders reappearing in the BTL market are dropping lending interest rates so landlord/investors should benefit from the competition between lenders making it cheaper to expand one's property portfolio.
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Blog and News -
Mortgages
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Written by John Angeletta
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Thursday, 20 May 2010 15:07 |
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Part 1: Why Sell-To-Buy, When You Can Let-To-Buy?
With UK property recovering from 07/08 decline, and with most pundits predicting continuing growth over the remainder of this year, it makes one think about delaying any house move to enjoy the revitalized growth.
But, if a move is delayed now to enjoy more capital growth, you'll just end up paying more for your new property when you eventually do move! What a Dilemma!
But is there a solution? Read on ...
The answer that appeals to more and more families wishing to relocate without the hassle of trying to sell before they move and/or sacrificing potential increasing value, is to let out the family house using it's collateral, plus the rental income, in support of a new mortgage on their next home.
As a Cash-Buyer not constrained by having to sell before they are able to buy, the experience can be rather more enjoyable for all involved.
In this first of a two part article, we shall explore the option of renting out your primary residence to allow you to move on to a new home when you want to. A process known as Let-To-Buy, which falls under Buy-To-Let rules. Assuming this option is not altogether too scary to contemplate, after reading these articles, you will be in an informed position to help you determine whether your current house is let-worthy.
In the second part of this article, we shall explore Who Does What?, to make sure your let property is maintained and managed properly.
Part One ~ Is My Current House Let-worthy?
If you move out of your home and bring in a tenant, you cease to be resident and become a landlord instead. Mortgage lenders view tenanted property differently from owner-occupied or 'residential' property. In other words, they view a Landlord wanting a mortgage loan (otherwise know as commercial or Buy-To-Let mortgage) in a different light than they do a Resident wanting a mortgage loan (Buy-To-Live).
Tenanted Property, one where the mortgage holder does not reside, generates rental income. Lenders in the first instance apply a formula to this rent, rather than ones earned income(s) (see note 2), to determine the maximum loan against the rent i.e. Loan-To-Rent (LTR).
Next, the lender will apply another formula to determine the maximum loan against the property i.e. Loan-To-Value (LTV). The lower of these two sums is the one used as the basis of the Mortgage Offer.
Below are two examples of maximum mortgage loan calculations ...
Example 1:
Annual Rental Income £5,400 (£450pcm) divided by current commercial interest rate (4.7%) divided again by 125% (see note 3) = £91,914 Max. LTR.
RICS Valuation £100,000 x 80% = £80,000 Max. LTV.
Maximum Loan Allowed £80,000, the lower of the two sums: in this case the Loan-To-Value figure.
Example 2:
Annual Rental Income £7,200 (£600pcm) divided by current commercial interest rate (4.7%) divided again by 125% = £122,553 Max. LTR.
RICS Valuation £200,000 x 80% - £160,000 Max. LTV.
Maximum Loan Allowed £122,553, again the lower of the two sums (61% LTV): in this case the Loan-To-Rent figure.
Next, enlist the guidance of two professionals (see note 1) ...
FIRST, A Letting Agent ~ ask a reputable agent (see www.eazylet.co.uk) to determine what rental income your house will actually attract in today's market AND whether your property type and location will be in demand as a desirable property to rent. Most experienced agents will provide a short rental report for you free of charge in anticipation of managing the let.
Remember to always check the credentials and experience of the agent as well as negotiate fees before signing any agreement to manage (see our Blog n News, The Danger To Unwary Landlords , 12th May 2010).
Once a re-mortgage offer is granted on your current house (see Independent Mortgage Broker below), you then instruct the Letting Agent to market it, accompanying all viewings. And, whilst s/he is looking for a good tenant for you, you can enjoy looking for your new home as a confident, cash-buyer.
SECOND, An Independent Mortgage Broker ~ armed with your rental report, approach a reputable broker (see www.fsa.gov.uk) to determine what maximum loan you will be allowed against your current house. Most experienced brokers will obtain a decision-in-principle (DIP) for you free of charge in anticipation of placing your mortgage with the lender. The subsequent re-mortgaged funds from your current house will be used to buy your next home either as a cash-buyer, or as a significant deposit towards your new mortgage on your new home, which may also have a mortgage, though this would be at residentail rates.
Remember, you will need to budget moving expenses and professional fees, which can be inclusive of this new, LTB re-mortgage of your current house.
Under your instructions, the mortgage broker will apply to an appropriate lender for the Let-To-Buy re-mortgage on your current house. You will of course, incur survey and lender administration fees up-front (typically £250-450). You will have up to 180-days to accept the Mortgage Offer during which time you won't pay any interest on your re-mortgage. Interest is only payable after you accept the offer and take the funds, known as 'drawn-down' and, this will not happen until you have secured your next home. That's the end of Part One. Next week we shall look at sensible Property Management including preparing your current house as a new rental property. For 25% Below Market Value Property, see www.bmvpropertyinvestmentdeals.co.uk NOTES 1. Correct timing is crucial to keeping stress levels in check during all this so, we recommend you instruct the Mortgage Broker to co-ordinate everything, agreeing his/her fees up-front too. 2. Your combined earned incomes (i.e. spouses/civil partners) need only be £25,000pa to obtain a commercial/BTL mortgage irrespective of Mortgage Offer.
3. An actuarily arrived at figure used by leading lenders.
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Blog and News -
Mortgages
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Written by John Angeletta
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Wednesday, 29 July 2009 16:34 |
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Signs of a pick-up in the housing market have continued, following a further improvement in the latest figures from the Bank of England (BoE), which show a rise in the number of mortgages approved in June. The figure rose to 47,584 - up from 44,169 the previous month and the highest number since April 2008. The increase marked the fifth month in a row that approvals have risen. However, the figures are still well down on levels seen at the housing market’s peak and indicate that demand is still subdued. Net lending for house purchase grew by £343m in June – only very slightly higher than the rise in May. The number of mortgages approved for remortgaging grew to 35,011. Seema Shah, property economist at analyst firm Capital Economics, said the modest rise in mortgage approvals in June suggested that the upward trend in housing market activity had reasserted itself. “It certainly needs to because, given the drastically low level to which approvals had fallen at the end of last year, there is much further to go before housing market activity returns to levels that historically have marked the tipping point between rising and falling house prices.” Source: Mortgage Solutions What We Say ~ the last six bmv properties we listed for the UK were 'Reserved' within minutes, the fasted being a new record, just 6-minutes. In fact we are down to our last UK property listing. But don't worry, we are constantly on the look out for genuine below market value property opportunities and recent conversations with our sourcing agents are encouraging so keep an eye on the site! If you are currently active, be sure to exploit our 'SMS TEXT ALERT' facility (see website), to receive as early notification as possible.
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