The core principles of lending
So, we are here, the insides of pubs opening, having a meal out within a permanent structure and even being able to hug one another. Is this going to be a summer of love, the likes of which we haven’t seen since 1967? I certainly hope so.
As ever, a lot going on in the mortgage world, so lets dive straight into it:
Core Principles of Lending
I had a conversation with a colleague recently about the core principles of lending, and it reminded me of one of my earliest lessons I learned many years ago back when I was working in a bank. These are what I recall as “The 3 C’s of lending”, which are:
So to that end, we will be releasing a blog a week talking over each aspect of the principles of lending, and how they interlink to determine the lender we decide to work with.
So the first in this series focuses on ‘Capacity’ or what we refer to now as ‘Affordability’, or in English – how much can you afford to borrow. If you want to have a more detailed look at this area, please click this link which has this and much more.
House Prices Break Records… Again
While it is certainly not news, and in fact it is likely that we’ll see record house prices being a feature of the news well into July this year as the main stamp duty deadline at the end of June if fuelling huge levels of demand. It is unlikely house prices will be pegged back this year as credit conditions ease and the economic recovery gathers pace.
What was interesting was that RICS (The Royal Institute of Chartered Surveyors) reported that in April, House Price Inflation has hit its highest level since 1988. RICS gauge of house prices – which reflects the proportion of surveyors reporting price increases – jumped in April to +75, its highest level since 1988, from +62 in March.
RICS said new buyer demand was positive across every region for the first time this year. But new instructions from owners looking to sell slumped to -4 from +21 in March. “Housing supply, or more pertinently, the shortfall in supply relative to demand is the key theme coming through loud and clear,” Simon Rubinsohn, RICS’s chief economist, said.
We Want To Hear From You!
To keep the positive vibes flowing, we would love to hear from you if we have helped you with your mortgage. It would mean a huge amount to me, and the broker that helped you, if you would be as kind as to send a picture of you in your home with a few words about your experience? Or Better still, a short video talking over how we helped?
We would love to use this on our social media as nothing is more powerful than your own experiences which we can learn from, and share with others. I know our British reserve makes this very unnatural for us, but I would really appreciate it.
Contact us for more information.
Market rates pegged back slightly last week after a few flat weeks. No major changes yet, and we are still seeing many lenders reduce the interest rates on their products, especially if you have a smaller deposit.
So our default position stands, unless you have any specific needs, we would most likely recommend a longer term fixed rate if you have a 25% + deposit, but keep it short term or flexible if less than that figure.
In the last week:
3 Month Sterling Libor = up by 0.001% at 0.083%
2 Year SWAP = down by 0.012% at 0.303%
5 Year SWAP = down by 0.023% to 0.684%
Bank of England Base Rate = Held at 0.10%
2 Year Variable from 0.99%
2 Year Fixed Rates from 1.03%
5 Year Fixed Rates from 1.21%
BTL Rates from 1.19%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec May 2021
If you would like to speak to any of our team regarding how best to get mortgage applications approved or your mortgage goals, we would be delighted to help. You can find the contact details of the team here.
Should you wish to speak to one of our mortage brokers or protection advisers, Click Here and you will find everyone’s contact details.
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Rose Capital Partners Limited is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority.