Posts Tagged mortgages
Obtain Low VA Mortgage Rates and Save Money!
Posted by Victoria Belle-Miller in Finances on 03/13/2010
VA mortgages are a great financing option for both first time homebuyers and current homeowners. These types of loans have multiple benefits, including no down payment on purchases and no mortgage insurance. The absence of these costs, which are required on most mortgages today, saves borrowers money for their other expenses. Borrowers can also save money because this type of financing tends to have lower interest rates than other types of home loans.
Why Low Rates are Beneficial
First time homebuyers or homeowners who are purchasing a new home and are eligible for VA financing can receive a low VA mortgage rate on their home loan. Having a low interest rate will lower the borrower’s monthly mortgage payment and save him or her money in the long run. A borrower can use the money he or she saves for personal expenses or for other expenses related to the new home. First time homebuyers can also use the $8000 first time homebuyer tax credit to maximize their savings. The tax credit is slated to end in April, so first time homebuyers should consider taking advantage of this incentive now.
Obtaining lower rates by refinancing
Current homeowners can refinance their existing VA mortgages in order to receive lower interest rates on their home loans. There are a few different home-loan refinancing options homeowners can choose from. With a lower interest rate, a homeowner can lower his or her monthly mortgage payment and save a great deal of money in the long run. In addition to lowering one’s interest rate and monthly payment, refinancing also gives homeowners the option to change the terms of their loans, consolidate debt and/or take cash out.
Requirements to Qualify
To be eligible for this type of financing, the borrower must be either a veteran or a current member of the U.S. military. If the borrower is a veteran, in order to qualify for a loan, he or she must have been discharged under conditions other than dishonorable. There are certain other service length requirements that borrowers must also meet. A home loan specialist can help potential borrowers determine their service eligibility.
In addition to service requirements, an applicant must meet a residual income requirement and have an acceptable debt-to-income ratio so that the lender knows he or she can make the loan’s monthly payments. The VA does not require that applicants have a high credit score, but most lenders will require a credit score of at least 620.
In some cases, a veteran or current service member’s spouse may qualify for loan benefits in the event of a death caused by or related to military service or other special circumstances. Disabled veterans who were disabled while in service or as a result of service may be entitled to additional loan benefits, such as being exempt from paying the loan funding fee. They may also be able to receive accommodation grants that they can use to make their home more accessible for their disabilities, or they may be exempt from having to pay property taxes, depending on the laws in the state in which they reside.
This type of loan is a great financial solution for those who have served our country. Borrowers can receive low interest rates, which will lower their monthly payments and leave them with more money for their other expenses. The absence of mortgage insurance and a down payment (for purchases) saves borrowers even more money overall. Interest rates are continually fluctuating, so now is a great time to take advantage of low VA mortgage rates to save money on home financing.
Victoria Belle-Miller is the newest member of the VeteransLoans.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the VA loans team and a valuable source of sound mortgage advice.
Reverse Mortgages For Seniors Offer Financial Independence
Posted by Victoria Belle-Miller in Finances on 03/13/2010
As the cost of living rises in 2010, a larger number of older homeowners are looking for a financial solution that allows them to remain in their home and still have available money at their disposal. Often, an older homeowner’s basic living expenses will exceed the income he or she receives after retirement, such as social security benefits. The cost of healthcare, often a necessity for older Americans, is also rising and is not always completely covered by health insurance or government aid. A reverse mortgage could be the answer to this financial quandary.
Reverse Mortgages for Seniors: Basic Information
This type of financing is specifically designed for older homeowners who are financing a residential property. This loan is unique, compared to other conventional home loans, because it does not require the homeowner to make any monthly mortgage payments. As long as the homeowner pays property taxes, stays current on homeowner’s insurance and maintains any necessary home repairs or maintenance, he or she will not have to make any payments on the loan for as long as he or she remains living in the home.
If a homeowner has sufficient equity in his or her home, that equity can be converted into cash with this type of loan. The money received from the loan is tax-free and can be used any way the homeowner sees fit. The money can be used to pay off other existing debt, healthcare costs or to simply improve one’s current lifestyle. The amount of money a homeowner can receive depends on his or her age, the value of the home, and current interest rates. Homeowners can choose from several disbursement options, including a lump sum, a line of credit, monthly payments or a customized option that is designed to meet their financial needs.
Requirements of this Loan
There are certain requirements a homeowner must meet to fulfill the terms of the loan. All homeowners listed on the title of the home must be at least 62 years old. The home being financed must also be the homeowner’s primary residence, which means he or she resides there at least six months out of the year. Due to the absence of monthly payments, there are no income or credit requirements for this type of loan, so in many cases, it is quite easy to qualify for this type of financing.
An appraisal will need to be done on the home to ascertain the home’s value. This will tell the homeowner how much equity is in his or her home so that the lender can determine how much money he or she can receive from the loan. The homeowner must also attend reverse mortgage counseling before he or she can take out a reverse mortgage. This counseling covers the loan and all of its requirements so that homeowners are better prepared before deciding on this type of financing. In many cases, free counseling is available to borrowers.
Benefits of this Type of Financing
This type of loan is insured by the Federal Housing Administration, which in turn guarantees that older homeowners who take out these loans and stay current on taxes, insurance and repairs will never owe more than the value of their homes once their loans are due to be repaid. This type of financing allows a homeowner to stay in his or her home without worrying about paying monthly mortgage payments. This will leave him or her with more money for other expenses and will help them maintain or improve their standard of living.
Senior homeowners have many expenses they are responsible for and the income they receive after retirement may just not be enough. A reverse mortgage could be the solution to their financial needs.
Victoria Belle-Miller is the newest member of the Senior Reverse Mortgage writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the team and a valuable source of sound mortgage advice.
Is it the Right Time to Re-Mortgage?
Is it time that you looked at re-mortgaging as a contractor?
With the Bank of England again keeping the base rate at 0.5% this lunchtime, many contractors whose mortgage is on a lenders Standard Variable Rate (SVR) could find themselves in a position where switching to a fixed rate would be a better option than staying on their lenders SVR.
With the Base Rate at an all time low and only likely to increase, now may be the time to consider a fixed rate mortgage.
Recent research showed that almost 90% of lenders SVR’s are currently higher than the cheapest fixed rates. Therefore, if you are currently on your lenders SVR, now could be the time to look at your options.
Another consideration for Contractors with a high level of savings is that it may now be a good time to consider an offset mortgage to make best use of your capital. This is particular relevant in the current economic climate considering what rate of interest your savings are likely to be attracting.
Taj Kang, Associate Director at Contractor Mortgages Made Easy commented “If you want to consider your mortgage options as a contractor then utilising the services of a Contractor Mortgage Specialist will ensure that you are speaking to experts that understand the different ways that contractors are paid. Going direct, or to a non-specialist could lead to failed applications which could hinder your mortgage options moving forward at a time when lenders are looking for reasons to say no rather than yes to funding”.
In other mortgage related news, Nationwide have published figures that reveal house prices fell by 1% in February compared to January, ending a strong run of nine consecutive monthly increases, and bringing the average price of a typical property during February to £161,320.
The building society said the drop in demand in January caused by the end of the Stamp Duty holiday and the icy weather seemed to have fed into February’s price drop.
Jonathan Cornell, communications manager at First Action Finance, said he believed that prices would enter a steady period before picking up in the second half of the year.
However, he added: “The end of the Stamp Duty holiday and the normal slowdown around the Christmas period led to less market activity and a lack of demand. I doubt that house prices will fall off a cliff and a slight drop means the market will be better off. It is also good news for first-time buyers because properties are cheaper.”
Looking at recruitment, the resurgence in the UK economy is creating more lucrative IT recruitment opportunities for the most highly skilled of Contractors in IT.
With IT investment now once again on many businesses agendas, companies are looking to hire quickly to support their objectives, which can only be good news for contractors.
This is further backed up by the Recruitment and Employment Confederation reporting that there had been an increase in the availability of IT and technology jobs last month.
This article has been published with permission of Contractor Mortgages Made Easy Contractor Mortgages Made Easy are a whole of market mortgage broker who specialise in securing bespoke Mortgages For Contractors
FHA 203k Loan Information
Posted by Victoria Belle-Miller in Finances on 03/05/2010
FHA home loans, which are insured by the Federal Housing Administration (FHA), are great financing options for any homeowner who wants to purchase a house or refinance his or her current mortgage. These loans have low interest rates and usually only require down payments of 3.5 percent! FHA loan requirements are simple, so current and potential homeowners are more likely to qualify for these loans than other types of loans.
FHA 203k Rehabilitation Mortgage Insurance Program
The FHA has a specific loan program to help homeowners who want to make improvements or repairs on their home, but do not have the funds to do so. These loans are called FHA 203k loans and can be used for either a purchase or a refinance. There are two types of loans in this program, one loan is for repairs that cost less than $30,000 and the other loan is for repairs that cost more than $30,000.
A streamline FHA 203k option is also available to homeowners who are interested in doing non-structural repairs or improvements. This loan requires less documentation and can be less costly. It allows a homeowner to finance up to an additional $35,000 into his or her mortgage in order to make improvements to the home. An FHA home inspector or appraiser can identify home repairs that need to be made.
How the Loan Can Be Used
Although there are some restrictions on what the loan can be used for, there are plenty of renovations and home repairs that the loan does cover. In general, these include modernization, eliminating safety or health hazards, making a home more accessible for individuals with disabilities, or making a home more energy efficient. More specifically, the loan can be used for roofing, plumbing, flooring, painting, minor remodeling and more.
Loan Requirements
There are certain requirements with this type of financing. Homeowners must spend at least $5000 on their home repairs in order to be eligible. Homeowners must get cost estimates from a licensed and insured contractor(s) before signing the sales contract. The total cost of the mortgage, including the repairs, must remain within the FHA loan limits for the county in which the home is located.
This loan cannot be used to flip houses, and the homeowner must use the loan on the home in which he or she lives. The work being done on the house must begin within 30 days of the loan closing. All work must be completed within six months to comply with the loan requirements.
If a homeowner wants to make repairs to his or her home and needs additional financing, this type of financing could be the best option. Many of the same eligibility standards used for standard FHA home loans apply to the FHA 203k loan. Most lenders will require that the borrower have a credit score of at least 620 to be eligible. To qualify for the loan, certain energy efficiency standards, as well as certain structural standards, must be met.
This loan could be great solution for homeowners who want a better way to finance home repairs and improvements without depleting their savings.
Victoria Belle-Miller is the newest member of the FHAMortgageBank.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the FHA loans team and a valuable source of sound mortgage advice.
Types of VA Refinance Mortgages
Posted by Victoria Belle-Miller in Finances on 03/05/2010
VA home mortgages are a benefit available exclusively to those who have served our country; this includes eligible veterans and men and women currently in the military. In addition to their exclusivity, these loans also require no down payment and no mortgage insurance. These two factors save applicants money and leave them with more money for other expenses, such as other bills, home maintenance, or personal necessities. This type of financing has flexible credit requirements, so veterans and service members are more likely to qualify for the loans.
Cash-Out Refinance Loan
If a homeowner has sufficient equity built in his or her home, he or she can use a cash-out refinance to turn the equity into cash to be used however he or she pleases. There are no restrictions on how the cash is used. When refinancing with this loan, a homeowner can take out a loan for a higher amount than his or her current mortgage and receive whatever is left over, after paying off the existing mortgage, in the form of cash. The cash can be used to pay off debt, pay for home repairs or maintenance, or pay for personal expenses.
Homeowners who find themselves in a significant amount of debt may find an encouraging solution in the cash-out option. With this loan, a homeowner can combine some or all of his or her debt into one loan. Doing this could lower his or her monthly costs. Instead of receiving multiple bills and paying different lenders, a homeowner could consolidate many payments into one. Consolidating debt can not only reduce monthly costs, but it can also help simplify the process of paying bills each month.
Rate/Term Refinance Loan
A homeowner who would like to refinance his or her current conventional mortgage can switch from a conventional loan to a VA mortgage using the rate/term refinance option. Refinancing can give the homeowner a lower, fixed interest rate, which would also lower his or her monthly mortgage payment. Refinancing with this type of financing would also give the homeowner access to all of the other great benefits of a VA home mortgage, including no mortgage insurance.
Interest Rate Reduction Refinance Loan (IRRRL)
Another refinancing option is the Interest Rate Reduction Refinance Loan. This is a streamlined option known for its quick processing. It allows a homeowner who already has a VA loan to lower his or her rate, which will in turn lower the loan’s monthly mortgage payment. Other terms of the loan can also be change, if desired.
If interest rates decrease after a homeowner has taken out a VA mortgage, the IRRRL can be used to lower his or her rate quickly and easily. Homeowners can also use an IRRRL to switch from an adjustable interest rate to a fixed rate or to change the length of their loans to better suit their needs.
A VA refinance mortgage can be used to procure a lower interest rate, consolidate debt, receive extra cash, and/or to change the terms of a homeowner’s original mortgage. With rates low, it is a great time to take advantage of this exclusive benefit.
Victoria Belle-Miller is the newest member of the VeteransLoans.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the VA loans team and a valuable source of sound mortgage advice.
When Your Mortgages Are at Risk: Getting Ready For a Foreclosure
Getting mortgages is perhaps the most important financial decision in your life. Firstly, it involves a large sum of money. Secondly, and more importantly, it involves your home sweet home. So, to decide that you will get one of the mortgages – Toronto or anywhere in Canada – is like treading on water.
Sometimes, however, everything will not turn out as planned. Your carefully-budgeted income may encounter hitches along the way and you sometimes end up not paying your monthly amortizations. The first instance is not reason enough to be anxious. But when non-payment and missed payments happen on a prolonged period of time, you may want to get yourself ready. You may want to prepare yourself and accept that your loan has just been categorized as one of those mortgages that desperately need redemption. You may want to acknowledge that you are on the verge of a foreclosure.
On the verge. This means that you are still not there. It’s just that your property is at risk and if you don’t do anything rational and quick, you may end up being homeless. So what should you do in instances like this? How do you deal with mortgages and their consequences?
1. Muster enough courage.
If your loan belongs to the group of mortgages that need immediate action, then chances are, you are not getting in touch with your lender. And you have been doing this for quite some time already. They may have exerted efforts in making your payments and you have been avoiding all these phone calls.
Well, now is the time to make amends and summon the courage to face your lender – or at least talk to them. They’ve surely handled lots of mortgages – Woodbridge or elsewhere – and they have become experts at handling these things.
Also, gather enough strength to accept that it is your fault. Acknowledge that despite your lender’s efforts, you have deliberately turned away from them and chose not to make payments. In one way or another, you’ve let your loan group with other mortgages that are at risk.
When you’ve re-established a comfortable and healthy professional relationship once again, then you can ask their help about your options. What courses of action can you take to stop a foreclosure?
2. Do your Research.
It also pays to have sufficient knowledge about mortgages. Hit the internet and check out the foreclosure process. How is this kind of procedure carried out? When worse comes to worst, at least you know about the ins and outs of the process. You won’t be caught off-guard.
Seek professional assistance if you must. This way, your interests are properly and “legally” protected.
Everyone wants to own a home. Everyone wants to live in a house that he/she can truly call his/her own. Because of this, many people turn to the world of mortgages for assistance. When you are one of those people that get into this kind of situation, take it seriously. Pay your dues. Keep your end of the bargain. Otherwise, instead of making your dream come true, you might just be turning into the VERY person that destroys it.
Allegro Mortgages Corp. – Best Broker for All Your Financing Requirements
(416) 987-0008
For options on mortgages – Woodbridge- or mortgages – Toronto, visit AMortgages.ca. Check out the site too if you’re simply looking for generic information on mortgages.
FHA 203K Loan Makes Financing a Home in Need of Repairs Simple
Posted by Anne Johnson in Finances on 02/25/2010
The FHA 203K loan is a type of financing that is insured by the Federal Housing Administration. It is a unique type of financing that allows homeowners to obtain both a purchase loan and rehabilitation financing in the same transaction. Before this transcendent loan program, a homeowner had to obtain an initial, temporary loan to purchase the home and a separate rehabilitation home loan to make any necessary repairs. Only after the repairs were complete could the homeowner gain permanent financing for their newly improved home.
FHA 203K: How does it work?
The FHA 203K loan was designed to streamline the process of buying a home in need of repairs. In order to provide funds for the repairs, the loan amount is based on an expected future appraised value that takes into consideration how much value the completed repairs will add to the current value. Up to $35,000 over the purchase price of the home can be financed into the loan to cover the cost of repairs.
The contractors chosen by the borrower to do the repairs will receive the money for their work in two draws. One draw is for 50% of the work and is disbursed at the beginning of the repairs while the remaining 50% will be disbursed after the work is completed. The repairs must begin within thirty days of the closing of the loan and must be completed within six months. The amount paid to the contractor(s) must be determined before the loan closes by obtaining written bids on material and labor costs. The homeowner can do the work himself provided that he is a licensed and bonded contractor.
What types of repairs will the FHA 203K cover?
Some of the repairs eligible to be completed with the funds from an FHA 203k loan include: roof replacement, electrical or plumbing work, kitchen remodeling, accessibility renovations, appliance purchases, and painting. Although many cosmetic renovations are allowed, luxury items and upgrades are not permitted. Also, any funds needed to repair to any detached structures, like sheds, swimming pools, and gazebos, may not be included in this loan amount.
FHA 203K: Qualifications
The FHA 203K program has the same types of eligibility requirements that exist on any FHA home loan. A homeowner must qualify on the basis of both credit and income to be eligible and the property must be FHA approved. As a general rule, the monthly mortgage payment cannot exceed 41% of the borrower’s monthly income and most lenders require at least a 620 credit score. Homes that qualify include: FHA-approved condos, 1-4 unit homes, and planned urban development homes (PUDs). The construction of the home must have been completed at least one year prior to financing in order for the home to qualify.
The FHA 203K program can be a great tool for any homeowner looking to renovate or repair his or her home. In a housing market that has seen foreclosures reach record highs, the FHA 203k loan can not only provide potential home owners with more opportunities to purchase a home, but can also help rebuild the housing market by facilitating the rehabilitation of foreclosed properties.
As a former psychology major, finding solutions to resolve problems has always been a subject of interest to me. I hope that my writing will give people the confidence to make important decisions about FHA loans. In addition to writing, I love to read, knit, spend time with friends and family, and watch the Missouri Tigers and Green Bay Packers!
Lenient FHA Loan Guidelines Make Now a Great Time to Apply
Posted by Victoria Belle-Miller in Finances on 02/21/2010
FHA loans are a great option for first time homebuyers on the house hunt, as well as current homeowners who are looking to refinance their current mortgages. These loans offer low down payments, as well as low interest rates, which helps keep monthly mortgage payments low. This type of financing, which is insured by the Federal Housing Administration (FHA), also has more lenient credit and income qualifications than most other home loans. Even potential borrowers who have less-than-average credit scores may still be able to qualify.
Loan Eligibility
It is typically easier to qualify for this type of financing, compared with other types of home loans. While the FHA does have lenient credit score and income requirements, most lenders require that applicants have a credit score of at least 620 to qualify. The FHA also requires that applicants have a clean credit history of at least twelve months, meaning they have had no delinquent mortgage payments during the twelve months preceding their application. The house an applicant wants to finance must be his or her primary residence, which means they plan to live there at least six months out of the year.
Loan Requirements
This type of financing requires that the borrower make a down payment on the home being purchased, as well as monthly mortgage payments. The down payment can be as low as 3.5%, which is much lower than down payments on most other home loans. Applicants will also have to pay an upfront mortgage insurance premium on the loan, which is currently equal to 1.75% of the loan amount.
Before the loan can be closed, an appraisal will need to be done on the home to ensure that the home meets all of the minimum safety standards that the FHA requires and to document the value of the property. Borrowers also will be required to escrow their homeowner’s insurance and property taxes, which ensures that everything is paid up to at least one year.
There is interest on the loan, but it is typically lower than conventional loan rates. And borrowers can opt for fixed interest rates so that their rates remain unchanged over the life of their loans and their monthly mortgage payments are consistent. This option would be especially good for borrowers who have had credit issues in the past.
Loan Refinance
For a current homeowner, refinancing with an FHA loan could lower his or her interest rate, which could also lower the monthly mortgage payment. Refinancing also gives homeowners the option of changing the terms of their loans. They can extend the length of their loans or change from adjustable rates to fixed rates, which could save them thousands of dollars in the long run. With the cash-back refinancing option, homeowners can take out a loan for a higher amount than the amount needed to pay off their current mortgage and use the rest to pay off large bills or cover other expenses. There are no restrictions on how a homeowner can use the cash.
Apply Now Before Requirements Change!
This type of financing offers several benefits and has relaxed guidelines. A borrower who does not have a lot of money for a large down payment can still become a homeowner with this type of loan. Current homeowners can save money every month by refinancing and getting lower interest rates, as well as receive cash back for other financial needs.
The FHA will be changing their requirements in the next few months, so now is a good time to speak with a FHA loan specialist to determine whether this type of financing is right for you!
Victoria Belle-Miller is the newest member of the FHAMortgageBank.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the FHA loans team and a valuable source of sound mortgage advice.
Benefits of Applying For a VA Loan
Posted by Victoria Belle-Miller in Finances on 02/20/2010
Veterans and men and women currently serving in the military who are considering home financing options should look into a VA loan. Because of their service to the United States, they have earned the privilege of having certain benefits. One of these benefits is a VA mortgage to help them finance their homes. This type of financing offers several benefits that may not be available with a traditional mortgage.
VA Loans Save Borrowers Money
These loans do not require a down payment and they do not require any mortgage insurance. These two advantages alone can save borrowers hundreds of dollars on their monthly mortgage payment! Not having a down payment is especially great for a first time home buyer who may not have a lot of money to put down on a new house. And not having to pay mortgage insurance eliminates one home-related expense right away.
Some of the costs associated with this loan can often be financed, so the borrower does not have to pay a lot of money up front. Because these loans are guaranteed by the Department of Veteran Affairs, they tend to have lower interest rates, which also saves borrowers money on their monthly payments.
It’s Easy to Qualify
Compared with other loans, VA loans have easier qualification requirements. Borrowers are not required to have high credit scores or large incomes in order to qualify. The Department of Veteran Affairs does require that borrowers have clean credit histories of at least one year and that they meet minimum residual incomes to ensure that they can make their monthly payments. The residual income is based on regional location, family size and the amount of the loan. The borrower must not have been dishonorably discharged from the military in order to be eligible for this type of financing.
Refinancing Benefits
There are several options available when refinancing with this type of loan. Many borrowers refinance in order to lower their interest rates, especially if the market has changed or the value of their home has increased. Borrowers can also refinance to change the terms of their loan, including extending the time frame of their loan or switching from an adjustable rate to a fixed rate, which saves them money over time.
Borrowers can also refinance in order to consolidate their debt or receive cash back for other expenses if they have enough equity. The cash they receive can be used for any of their personal expenses. Also, potential borrowers can refinance a non-VA loan to a VA loan in order to take advantage of the many benefits this type of financing offers.
Additional Benefits available to Disabled Veterans
If a veteran was disabled as a result of service, he or she is eligible to receive additional loan benefits. Their funding fees will be waived and, depending on their state, they may not have to pay property taxes, which can save borrowers who are disabled a great deal of money. Also, disabled veterans may be eligible to receive grants to help them make their homes more accessible for their disabilities.
These loans offer several benefits to both veterans and current members of the US military. Now is a great time to speak with a VA loan specialist about taking advantage of this type of financing.
Victoria Belle-Miller is the newest member of the VeteransLoans.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the VA loans team and a valuable source of sound mortgage advice.
Self Certified Mortgages a no no For Contractors
This lunchtime The Bank of England once again held the base rate at 0.50%. This was widely expected by analysts as the Bank, The Treasury and the Financial Services Authority (FSA) try to speed up the economic recovery.
Back in October last year the FSA announced plans to ban self-certification mortgages in an attempt to ensure that all borrowers prove their ability to repay in advance.
This week, industry trade body The Council of Mortgage Lenders (CML) spoke out on behalf of lenders claiming that a ban on so-called “liar loans” and other controversial mortgage lending practices would backfire and have harmful long-term consequences.
The CML is asking the FSA to hold fire on plans to clamp down, arguing that the home loans market had “corrected itself” and there would be no return to the excesses of the past.
Self-certification mortgages were originally aimed at the self-employed and freelance/contract workers who had trouble proving their income.
In its response to the FSA, the CML said many of the problems of the past had been corrected by mortgage firms anyway following a rise in losses and fraud, while self-cert deals had disappeared in response to public criticism. Borrowers, too, were taking a more responsible approach.
The CML have admitted that the case for self-cert mortgages is weak, given the higher level of arrears associated with them and the scale of past abuses.
CML argue that borrowers who might be perfectly capable of running a mortgage but may find it difficult to prove their income could include self-employed people who had recently launched a business but had yet to submit formal accounts; sole traders, contractors, and freelance workers.
Taj Kang, Associate Director at Contractor Mortgages Made Easy (CMME) commented “The fact that so many self-cert mortgages were granted to employed workers who could prove their income, and the high level of arrears associated with these types of loans shows that self-certification mortgages were being abused by both individuals and brokers. At CMME, we wouldn’t advise a professional Contractor or Freelancer to go down the self-certification route; if you approach a specialist contractor mortgage broker then they should be able to secure you a competitive mortgage that is based upon appropriate evidence of income”
“It is the opinion of CMME that the FSA should stand by their proposals to tighten up the lending criteria, as any contractor or freelancer that can adequately afford a mortgage should have no need to go down the more expensive self-cert route to secure borrowing”
The Contract jobs market in the UK showed another month of growth in January with the second highest number of jobs on a temporary or contract basis since August 2009.
The financial sector seems to be the strongest for IT Contractors so far in 2010. It seems many financial companies cut back staff during the recession and now need to plug the gaps.
Findings from Powerchex, which vets IT contractors for banks, reveal that IT contractor job offers from financial services have indeed picked up steadily since the third quarter last year.
Philip Fanthom, managing director of Jenrick IT, stated “We have noted an unprecedented increase in demand for contract IT staff. We are well ahead of forecast…and we have also seen a welcome return of permanent vacancies”.
This article has been published with permission of Contractor Mortgages Made Easy Contractor Mortgages Made Easy are a whole of market mortgage broker who specialise in securing bespoke Mortgages For Contractors