11 Kasım 2007 Pazar

UK Mortgage

UK Mortgage : The mortgage market of UK is one of the most sophisticated mortgage markets in the world. The UK mortgage market offers a choice of around 4,000 products to customers. It is one of the most competitive where there is a growing need for lenders to devise winning strategies. However in such types of markets innovation is proved to be one of the determining factor in differentiating the winners and losers in the future. Market of UK mortgage is a top most innovative and competitive market in the world. The Mortgage market of UK differs in comparison to the other countries in the ground thatthere is no intervention in the market by the state or state funded entities. Due to the poorer economic conditions, the mortgage market in UK has contracted more in 2005 than predicted before. There was a general slowdown in the total secured lending mortgage market for the year 2004.The progression of the buy-to-let mortgage market in terms of market share from 2003 to 2004 was the lowest observed (0.6 percentage point compared to 1.3 percentage points in the previous period. Making a better customer relationships Lloyds TSB gained market share in 2004 and moved into second place in terms of gross advances. In contrast, Barclays was the only lender in the top ten to witness a decline in both its mortgage book and its new mortgage business in 2004.
Process Of Mortgage In UKIn the Mortgage market of UK, lenders usually charge a valuation fee, which pays for a chartered surveyor to visit the property and ensure it is worth enough to cover the mortgage amount.Such type of survey is not a full survey .That is why it may not identify all the defects that a house buyer needs to know about.Even it does not form a contract between the surveyor and the buyer.
Mortgage Lending In UK PresentlyAccording to the figures from the Major British Banking Groups net mortgage lending in November-2005 rose by an underlying £5.1bn; the strongest rise since July 2004. It is much higher than both October's rise of +£4.3bn and the average of +£4.4bn over the previous six months .A lower growth is being marked in overall unsecured personal lending. Both loans & overdrafts have risen by just £0.1bn, on the recent average (£0.4bn).
BBA director of statistics, David Dooks have said that,”November’s above-average rise in mortgage lending has truely reflected the recent upturn in approvals and provides more evidence that the mortgage market bottomed out in the summer and is now being underpinned by steady demand”.
Some Mortgage Types In UKIn case of Repayment mortgages each monthly payment pays off a little of the underlying debt, as well as interest on the loans. After the completion of the term the mortgage is then cleared. In Case of the Endowment Mortgages an endowment policy is provided to life insurance and save funds to repay the loan at the end of the term (Generally 20-25 years). If the investment performs badly, then a shortfall is faced on your loan at the end of the repayment period. Individual Savings Account (ISA) mortgages work on the same principle as endowments, but an Individual Savings Account is used as the loan repayment method. If your investment performs badly you could face a shortfall at the end of the mortgage term. Pension mortgages are similar to both ISA and endowment mortgages, but work on the basis that pensions provide tax-free cash on retirement. After the end of the mortgage term the loan is paid out of your tax-free lump sum.
Interest Rates On Mortgages In UKThe interest rates on any mortgages are not different only the range of options offered differ. Variable rates– Here you have to pay the continuing rates on your loan. The mortgage rate changes every time interest rates change. Whatever may be the kind of mortgage you start with, it is likely to change to variable rates at some point of time Fixed rates– Here the interest rate is fixed for the period agreed - often two to five years Capped rates - These are fixed, but if rate falls you have to pay the lower rate. Such deals can be a good for budgeting. Cash back deals - This is when lenders offer money back if you take out a particular product. Discounted rates – In such type of mortgages the borrower is offered a discount off the lender's variable rate. The rate paid will fluctuate in line with changes in the variable rate.

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