House prices stabalise

Average house prices increased by 1.1% in June with UK house price averaging £197,461. The biggest price rises were in Northern Ireland and Greater London.
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Poor credit rating remortgages and mortgages

The Financial Services Authority, the financial sectors watchdog, has highlighted poor practise from lenders and advising firms when dealing with clients with poor credit ratings.

In its latest review, weaknesses were found in the assessments made by lenders and advisers, of a borrowers ability to afford a mortgage. As a result The FSA has begun enforcement action against five firms, which it refused to name.

Sam Cook from Wiseman Financial Management stated " It is no good arranging a remortgage to sort out credit problems unless the client can be clearly demonstrated to be better off on a monthly basis. We ensure we carry out a full fact find on our clients to ensure affordability, document everything thoroughly and issue our clients with a suitability letter so that they understand exactly what has been recommended and the reasons for the recommendation."

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Bank Rates Increased

The bank base rate has been increased to 5.75%.

The rise comes as no surprise following last months narrow victory for the moderates on the Monetary Policy Committee resulting in no increase to the rate.

It is widely anticipated that rates will rise to at least 6%

Jerome Thompson of Reef stated "the current rise means that homeowners will be paying an extra £16 a month for a typical variable rate £100,000 mortgage. It seems likely that there is more pain on the way and if homeowners are not already on a fixed rate mortgage they should consider changing to one. Most lenders have increased their fixed rates but a broker can often still find a competitive rate suitable to the borrowers circumstances."

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The best mortgage ?

Homeowners do not always resource the best mortgage on offer according to a new survey. A study by money supermarket reveal that 29 % of borrowers chose a mortgage from their existing provider. Forty-three per cent of British homeowners do not compare all mortgages on the market before buying a product, with just one in five borowers comparing deals across several lenders.

The survey also revealed that 82 per cent looked for low interest rates and only 41 % looked for low or no fees.

Samantha Cook of Loanwise explained " By not taking into account fees, borowers could be paying as much as £2,080 worse off by simply concentrating on the lowest rates. A mortgage broker is able to source from across the market place and will take into account all of the clients details and requrements. The borrower should be made aware of the true cost of the borowing.