People who believe they are unable to get a personal loan due to self-awareness surrounding their poor personal credit rating may be making an incorrect assumption, a financial advice and news provider has stated.
MyFinances.co.uk added that as a result, many consumers opt for more risky loan options that can result in costly mistakes, such as taking out a payday loan, a short-term solution that does not require a credit check, yet must be paid back with interest within two weeks.
The website added that the best route for those with bad credit histories is in seeking a secured personal loan, using a piece of personal property as collateral such as their house or car, in turn giving the lender more faith in the person's ability to pay back the loan.
However, the website added: "It is important for people with poor credit to do plenty of research when they are in need of a personal loan."
This was highlighted by a report from the Daily Mail which found that 18,900 families were evicted from their houses after failing to pay their mortgage - equivalent to 100 families a day.
source : http://www.jstfinancial.co.uk/
Saturday, August 9, 2008
Thursday, July 24, 2008
Lender offers cash deal on repayments
Edeus, a specialist mortgage lender that stopped writing new business three months ago, is offering cash incentives to existing customers for repaying their loans early.
The group, which provided subprime, buy-to-let and self-certification mortgages, is willing to cut up to 8 per cent off borrowers' outstanding mortgage debt and waive any early repayment charges if they redeem the loan in full by the end of September.
The incentive has initially been made available to 400 borrowers but may be broadened if the trial is successful. So far 20 per cent of customers have accepted the offer.
Edeus was forced to halt new lending earlier this year as the cost of obtaining funds rose sharply. The group is moving into new areas, such as helping other lenders assess credit risk and servicing other loan books.
"We need to utilise our capital as effectively as possible to fund our new business ventures," said Alan Cleary, managing director. "Presently, it's proving challenging to do that through traditional channels such as whole loan trading and the securitisation markets."
In the past Edeus had sold on the loans it provided to borrowers in the secondary markets. But Mr Cleary said secondary buyers were now only willing to purchase at significant discounts.
He said borrowers would be given the chance to reduce their mortgage by an average of 5 per cent, with some offered a 1 per cent incentive and others as much as 8 per cent.
The reductions should help existing borrowers with high loan-to-values switch to a new mortgage deal. Customers who have loan-to-values of 90 per cent or more may otherwise have been unable to find a new mortgage deal as many lenders have tightened criteria.
Edeus said its existing loan book was expensive to maintain as the cost of obtaining short-term funds had increased so much. The group said the threat of increasing defaults on its loans, particularly when borrowers came to the end of their short-term deal, was also a factor.
source : http://www.ft.com/
The group, which provided subprime, buy-to-let and self-certification mortgages, is willing to cut up to 8 per cent off borrowers' outstanding mortgage debt and waive any early repayment charges if they redeem the loan in full by the end of September.
The incentive has initially been made available to 400 borrowers but may be broadened if the trial is successful. So far 20 per cent of customers have accepted the offer.
Edeus was forced to halt new lending earlier this year as the cost of obtaining funds rose sharply. The group is moving into new areas, such as helping other lenders assess credit risk and servicing other loan books.
"We need to utilise our capital as effectively as possible to fund our new business ventures," said Alan Cleary, managing director. "Presently, it's proving challenging to do that through traditional channels such as whole loan trading and the securitisation markets."
In the past Edeus had sold on the loans it provided to borrowers in the secondary markets. But Mr Cleary said secondary buyers were now only willing to purchase at significant discounts.
He said borrowers would be given the chance to reduce their mortgage by an average of 5 per cent, with some offered a 1 per cent incentive and others as much as 8 per cent.
The reductions should help existing borrowers with high loan-to-values switch to a new mortgage deal. Customers who have loan-to-values of 90 per cent or more may otherwise have been unable to find a new mortgage deal as many lenders have tightened criteria.
Edeus said its existing loan book was expensive to maintain as the cost of obtaining short-term funds had increased so much. The group said the threat of increasing defaults on its loans, particularly when borrowers came to the end of their short-term deal, was also a factor.
source : http://www.ft.com/
Friday, July 11, 2008
Secured loan lender Firstplus shuts up shop
The firm – the UK's largest provider of secured loans – came to the fore with its adverts fronted by Carol Vorderman, but has now become the latest victim of the credit crunch with 300 job cuts in its Cardiff offices.
Some 130 staff will remain to cover existing customers.
The firm stated the decision would have no impact on the current loans of Firstplus’ 128,000 customers.
Neil Radley, managing director of Firstplus, said: “In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough.
"We recognise this is a difficult time for our people and will be providing all those affected with support and assistance.”
There are now just seven major players in the secured loan market – compared with 18 last year.
However, Nick White, director of personal finance at uSwitch.com, explained he found it hard to believe low market demand was behind Firstplus' decision.
"Brokers are still reporting strong demand for secured loans," he said.
"For many, secured loans are the last resort. People take them to consolidate debt when they cannot extend mortgages or remortgage."
Mr White now predicts secured loans will become harder to come by.
"Firstplus leaving the market means there is less competition. Paragon has already increased their rates and lenders can now be more picky.
"However, don't assume you cannot get a secured loan, but be prepared to be turned down."
news source : http://www.myfinances.co.uk/
Some 130 staff will remain to cover existing customers.
The firm stated the decision would have no impact on the current loans of Firstplus’ 128,000 customers.
Neil Radley, managing director of Firstplus, said: “In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough.
"We recognise this is a difficult time for our people and will be providing all those affected with support and assistance.”
There are now just seven major players in the secured loan market – compared with 18 last year.
However, Nick White, director of personal finance at uSwitch.com, explained he found it hard to believe low market demand was behind Firstplus' decision.
"Brokers are still reporting strong demand for secured loans," he said.
"For many, secured loans are the last resort. People take them to consolidate debt when they cannot extend mortgages or remortgage."
Mr White now predicts secured loans will become harder to come by.
"Firstplus leaving the market means there is less competition. Paragon has already increased their rates and lenders can now be more picky.
"However, don't assume you cannot get a secured loan, but be prepared to be turned down."
news source : http://www.myfinances.co.uk/
Monday, July 7, 2008
Housing market on the edge as number of home loans plummets
A FURTHER sharp fall in new mortgage advances in recent weeks looks set to test Scottish hopes of avoiding the worst of the housing crisis this summer.
Latest figures are still being collated but industry experts believe they will indicate a fall of at least 30% in home loans over the past few weeks, compared with a 20% decline in the opening quarter of the year.
The lack of activity indicates steeper price falls in the coming months after a relatively modest 1.8% average decline recorded by Nationwide between April and June.
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Kennedy Foster, policy consultant at the Council of Mortgage Lenders Scotland, said: "I haven't got the official figures yet but anecdotal feedback certainly suggests that there has been a further slowdown in the market over recent weeks."
This bodes badly as the market gears up for another major test in the autumn, amid concerns that there could be a rush of new properties coming on to a weak market to beat the costs of preparing for the controversial home reports. These will require properties to be marketed with a survey and energy efficiency report when they come into force at the start of December.
Glasgow Solicitors Property Centre, representing 200 members, has already called on communities minister Stewart Maxwell to postpone the home reports' introduction to "such a time when sellers feel confident they will be able to sell".
At this stage, the Royal Institution of Chartered Surveyors Scotland is still putting on a brave face over market conditions, although it last polled its members on price movements back in May, before the latest downturn.
"Scotland is still seeing new instructions coming on the market although the number is dropping marginally each month," commented director Graeme Hartley. "Yes, the market is slowing but we're not about to see it grind to a complete halt."
Up to now, Scottish house prices have held up far better than in England, partly because they tend to be more affordable but also because buyers usually put down larger deposits and are cushioned from the worst effects of tighter borrowing rules introduced by mortgage lenders.
But much of the industry is controlled by the huge building groups based down south, which have already cut back on their new developments in Scotland to conserve cash resources and could undermine the market with distressed sales to raise finance.
Homes for Scotland, the body which represents local developers, has already warned that it will not be possible to meet Scottish government targets of 35,000 new homes a year "while consumer confidence languishes at an all-time low".
Last week, the market-leading Taylor Wimpey underlined the scale of the housing market's problems when it failed to raise £500 million from its shareholders and announced that reservations for new homes had plunged 45% in recent weeks. In savage market conditions, its share price plunged by 42%, removing £267m from the company's value.
Further poor news is expected on Tuesday when Persimmon, the former Beazer group that owns Charles Taylor Scotland, is due to update shareholders after previously warning of a 24% decline in sales in the early part of this year.
Analysts believe that the group could follow Taylor Wimpey with a similar story of a further deterioration in its business and fear news of job losses and a writedown in the value of its £2.3 billion land bank.
Persimmon took early action to conserve its cash by calling a halt to all new developments, including seven in Scotland, earlier this year and is believed to be in a stronger financial position than rivals such as Taylor Wimpey and Barratt.
Even so, its shares have plunged from more than £14 to current levels of around 217p since the start of this year and it has been evicted from the FTSE100.
It has a stock-market value of around £650m at the present share price although its net assets were said to be worth some £2.4bn at the end of its last financial year.
The fall in the share prices of all building companies reflects expectations that the market will continue to struggle for years ahead.
Analysts at UBS say prices could fall by up to 30% eventually, with volumes down by a similar amount.
They believe the major builders will be forced to shed anywhere between 10% and 30% of their workforce and to close many of their regional offices in Scotland and elsewhere in a bid to balance their books.
source : http://www.sundayherald.com/
Latest figures are still being collated but industry experts believe they will indicate a fall of at least 30% in home loans over the past few weeks, compared with a 20% decline in the opening quarter of the year.
The lack of activity indicates steeper price falls in the coming months after a relatively modest 1.8% average decline recorded by Nationwide between April and June.
advertisement
Kennedy Foster, policy consultant at the Council of Mortgage Lenders Scotland, said: "I haven't got the official figures yet but anecdotal feedback certainly suggests that there has been a further slowdown in the market over recent weeks."
This bodes badly as the market gears up for another major test in the autumn, amid concerns that there could be a rush of new properties coming on to a weak market to beat the costs of preparing for the controversial home reports. These will require properties to be marketed with a survey and energy efficiency report when they come into force at the start of December.
Glasgow Solicitors Property Centre, representing 200 members, has already called on communities minister Stewart Maxwell to postpone the home reports' introduction to "such a time when sellers feel confident they will be able to sell".
At this stage, the Royal Institution of Chartered Surveyors Scotland is still putting on a brave face over market conditions, although it last polled its members on price movements back in May, before the latest downturn.
"Scotland is still seeing new instructions coming on the market although the number is dropping marginally each month," commented director Graeme Hartley. "Yes, the market is slowing but we're not about to see it grind to a complete halt."
Up to now, Scottish house prices have held up far better than in England, partly because they tend to be more affordable but also because buyers usually put down larger deposits and are cushioned from the worst effects of tighter borrowing rules introduced by mortgage lenders.
But much of the industry is controlled by the huge building groups based down south, which have already cut back on their new developments in Scotland to conserve cash resources and could undermine the market with distressed sales to raise finance.
Homes for Scotland, the body which represents local developers, has already warned that it will not be possible to meet Scottish government targets of 35,000 new homes a year "while consumer confidence languishes at an all-time low".
Last week, the market-leading Taylor Wimpey underlined the scale of the housing market's problems when it failed to raise £500 million from its shareholders and announced that reservations for new homes had plunged 45% in recent weeks. In savage market conditions, its share price plunged by 42%, removing £267m from the company's value.
Further poor news is expected on Tuesday when Persimmon, the former Beazer group that owns Charles Taylor Scotland, is due to update shareholders after previously warning of a 24% decline in sales in the early part of this year.
Analysts believe that the group could follow Taylor Wimpey with a similar story of a further deterioration in its business and fear news of job losses and a writedown in the value of its £2.3 billion land bank.
Persimmon took early action to conserve its cash by calling a halt to all new developments, including seven in Scotland, earlier this year and is believed to be in a stronger financial position than rivals such as Taylor Wimpey and Barratt.
Even so, its shares have plunged from more than £14 to current levels of around 217p since the start of this year and it has been evicted from the FTSE100.
It has a stock-market value of around £650m at the present share price although its net assets were said to be worth some £2.4bn at the end of its last financial year.
The fall in the share prices of all building companies reflects expectations that the market will continue to struggle for years ahead.
Analysts at UBS say prices could fall by up to 30% eventually, with volumes down by a similar amount.
They believe the major builders will be forced to shed anywhere between 10% and 30% of their workforce and to close many of their regional offices in Scotland and elsewhere in a bid to balance their books.
source : http://www.sundayherald.com/
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