Newsletters

 - While the information researched is believed to be correct, Jump Mortgages Ltd accepts no responsibility for its accuracy or the accuracy of information contained in referenced websites -

Winter 2008

Welcome to the fourth edition of the Jump Mortgages quarterly newsletter. HIPs are now the law of the land and interest rates are predicted to continue to fall, with the exception of sub-prime mortgages in the short term.

HIP update

On December 14th, 2007, Home Information Packs finally became mandatory for all residential properties going onto the market in England & Wales. HIPs will include a copy of the searches, information on the energy rating of the property and evidence of title. For full information visit the government’s site at…
www.homeinformationpacks.gov.uk.


The market

As you may well know, the Bank of England has reduced it’s base rate by .25% to 5.50% since the last newsletter. For those of you on tracker rates, you will see immediate benefit. For those of you on fixed rates, you may also stand a strong chance of benefiting, depending on when your tied-in period expires on your current deal. The Governor of the Bank of England was quoted in the financial times in December as stating that he believed interest rates would fall a couple of times in 2008, which should be a fairly good indication of the trend to some. Continued reports in the press also suggest that they are likely to fall two more times this year.


Interest-rates

While there has been a significant amount of panic in the press regarding mortgage interest rates, for the majority of people, there has generally been little marked upward effect. In fact, many rates have fallen (see above). The one area that has seen a significant rise is in the sub-prime arena. Sub-prime loosely refers to people that have patchy credit histories, cannot prove their income, or both. Not only has the underwriting become much more stringent, even for mortgages on a self-certified basis, but the rates have risen fairly dramatically, sometimes by as much as 1%. While this is generally not expected to be a long-term trend, it will likely continue throughout 2008 until markets settle.

Autumn 2007

Welcome to the third edition of the Jump Mortgages quarterly newsletter. The overwhelming news at the moment of course is market instability and predicting interest rate changes.


Recent Market Conditions

Until only a few weeks ago, most pundits were agreed that the Bank of England would raise rates once again before the end of the year in order to bring under control rising house prices that continue to defy the odds.

Enter the American sub-prime market. How are the two connected? Well, in a nutshell, pretty much everything is connected in an increasingly global financial market.

The problems began to surface when American sub-prime lenders began to foreclose on loans and started to notice that many of the applicants had misled the banks on their applications. Sub-prime loosely refers to loans lent to people who either cannot prove their income or have patchy credit histories, or both. As human nature will dictate, these types of loans can be open to fraudulent activity.

Lenders normally obtain funds to lend clients from two different sources; from cash deposits that their high street customers deposit into their back accounts or they borrow directly from the markets. Most lenders use a combination of the two.

As it hit the news that some of these loans were fraudulent, investors in mortgage debt began pulling out, making it more difficult for banks and building societies to come up with the funds to lend to their mortgage clients. Northern Rock has been particularly susceptible as it relies more heavily than other mortgage lenders on market funding than funding from deposits.

Those investors that remain want increased returns for perceived increased risk. Lenders have had to push up their interest rates on sub-prime loans, making it more difficult for these types of borrowers. The end result is that the demand for property is predicted to drop as this tranche of the market becomes less able to afford loans. Theoretically, prices should cool, or even drop.

If the market cools off, not only will the pressure for the Bank of England to raise rates subside, we may even eventually see the reverse where the rates might have to be lowered to stimulate the economy.

The most likely short-term result is that the Bank of England will hold steady for a few more months until the full effects of recent events can be analysed, but it’s anyone’s game at the moment.

Summer 2007

Welcome to the second edition of the Jump Mortgages quarterly newsletter. Below is some handy information on how to reclaim Exit Fees from past lenders and an update on Home Information Packs.


Exit Fees

Sometimes referred to as sealing fees, or final repayment fees, exit fees are charged as a final administration fee when switching from one lender to another. Not all lenders charge them, but most do. This is not to be confused with an Early Redemption Penalty, which penalises you if you break your contract with your lender early.

It is now possible in some cases to claim some or all of this amount back, saving you potentially hundreds of pounds. Why? Well, many lenders have raised their fees in the last few years and have been unable to justify the rises. Furthermore, the amount you are charged may be different than what your past lender initially quoted you for. In January 2007, the FSA announced that if "past customers have paid a higher fee they can expect a refund of the difference". Great news obviously, but how do you claim this back?

A simple call or letter should do the trick. For contact information, go to the money saving expert website at www.moneysavingexpert.com/reclaim/mortgage-fees. Contact information is half way down the page.


HIP Replacement

After the last newsletter went to print, the government did a bit of an about turn with Home Information Packs. HIPs are now set to become mandatory from August 1st, 2007 (rather than June 1st), but only for properties with 4 bedrooms or more. See www.homeinformationpacks.gov.uk for full current details.

These packs are, perhaps ironically, intended to make the home-buying process run a little smoother and will be relevant to you if you are planning to sell your property, or buy another one. Effectively, some of the legal and other work will have to be completed before the property can be placed on the market. The cost will be borne by the vendor. Packs are currently expected to contain an energy performance certificate, terms of sale, evidence of title, results of searches and leasehold documents where applicable.

Spring 2007

Welcome to the first edition of the Jump Mortgages quarterly newsletter. Whether you have just bought your first property, or own several, there should be something for you below. Of course, further information can be found on our website to view at your leisure. The newsletters will be archived on the site for future reference.

Cheaper Council Tax

Ever feel like you are paying too much council tax? Well, now there is a way to find out.

Not all homes are banded equally and you could be paying higher rates than your neighbours. Check out the government’s online Council Tax Valuation service *. Type in your post code when prompted. You are then asked to fill in your whole address. Just put the street name in, leaving out the house number, and search. This will bring up your, as well as neighbouring, properties. You may be in for a bit of a surprise.

If you have a higher banding than neighbours in similar properties, you may be eligible to challenge. If you succeed, your property may be re-banded and you could possibly be in for a refund for past overpayments. To discuss or challenge the banding, contact your local listing officer **.  

A brief word of warning. Make sure you do your research before calling the listing officer. If you are on a lower banding than your neighbours, this tactic could backfire and you could end up paying more.

* www.voa.gov.uk/council_tax/cti_home.htm

** www.voa.gov.uk/council_tax/the_role_of_listing_officers.htm

HIPs

Home Information Packs * are set to become the law of the land on June 1^st, 2007.

These packs are intended to make the home-buying process run a little smoother and will be relevant to you if you are planning to sell your property, or buy another one.  Effectively, some of the legal and other work will have to be completed before the property can be placed on the market. The cost will be borne by the vendor. Packs are currently expected to contain an energy performance certificate, terms of sale, evidence of title, results of searches and leasehold documents where applicable.

Anecdotal results from Denmark, the only other EU nation to have a similar system already in place, have been quite positive. It should be noted however that their system also requires the seller to have a survey done, while in the UK this will not be compulsory. Most estate agents will have access to HIP providers. You can also hire one independently **.

* www.homeinformationpacks.gov.uk

** www.landlordzone.co.uk/dir/hip-providers.htm

Jump Mortgages Ltd is directly authorised and regulated by the Financial Services Authority. Jump Mortgages Ltd is entered on the FSA register (www.fsa.gov.uk/register/) under reference 471562. The advice and/or advice contained within the website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. The FSA do not regulate some forms of mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.