With the mortgage rates currently dropping as they have done over recent months, there’s likely to be a lower mortgage rate available than the one you are currently on. Should you be rushing out to a mortgage broker to see if there are cheaper mortgage rates on the mortgage market for you?
Maybe, maybe not. It’s not always that simple in the world of financesand that’s the reason that whether you are looking at mortgage tables online or by visiting banks, you should always seek free, independent advice from a mortgage advisor. Don’t just swap mortgage rates because your new bank tells you they have a better mortgagedeal. Don’t just find a lower interest rate on the internet and apply for it, thinking all will be well once you have completed your new loan.
Why might it not be a good idea in all cases? Well, one of the first fact finding questions a mortgage broker will ask you may be about any tie-ins you have with your current mortgage product. If you move your mortgage now, will you have to pay any financial penalties to your current lender? These could be quite significant costs. If the penalty is to pay a few months’ interest just to get out of an existing deal, then it might require you to reduce your monthly repayments a lot in order to recover the extra expense, and this might not be possible in the long term.
Assuming that your current mortgage has ended its comfy initial introductory period and you are now on the standard variable rate product, without any tie-ins, then there are still plenty of warning flags that might make it harder or financially uncomfortable for you to remortgage. These, along with any other relevant warnings, should be discussed and worked through with along with other help and advice from your mortgage broker.
For example, you will need to consider do you still count as the same level of credit risk as when you took out the mortgage to begin with, or have you missed any repayments, or have you made a lot of credit applications lately? Has the value of your property fallen since you took out your current mortgage, maybe meaning that your new level ofborrowing will be an even larger proportion of the house price than when you took out your current product? These might mean that banks won’t be as happy to offer you a mortgage, or at least not as good an offer. You could be shoved onto a more expensive product because of a change of circumstances.
And even these aside, there are arrangement fees for your new mortgage, completion fees, other legal fees and maybe survey fees on your own property. All of these have to be paid for. Pay for them up front as you arrange a new mortgage, and then you have to work out what the long term impact is effectively and decide if the saving in the offer period outweighs the costs involved . Add them to your mortgage and you end up paying more each month.
Either way, reducing your monthly mortgagerepayments isn’t just about finding lower mortgage rates. You have to take into account all of the associated costs and impacts and total up over the next few years if moving mortgage will actually save you any cash, or whether it will cost you money. Ask an independent mortgage broker to give you a written model, comparing your current position to your proposed position.
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Currently in the news a lot of recent times are the tracker mortgage rates. The theory goes with these tracker mortgages that they will exactly follow, or track, the Central Bank’s announced base rate. Every time it increases or decreases, the tracker rate mortgage is expected to move in exactly the same way. Usually you agree with your bank what the rate difference will be between the base rate and the interest rate you are charged.
So why are these tracker rates popular and in the future could we be expecting to see many more people taking them out, or are they a risk? They are popular for those home owners that are willing to gamble on interest rate changes and are more happy to see their interest rate change and benefit from lowering rates, rather than having the security of knowing what future repayments will be. They are suitable for those wanting to gamble that interest rates will go down in the future and if they go up, they can still afford to make the loan repayments. Maybe they have other suitable investments that if interest rates go up will be earning them more solid income, so the net result isn’t an issue.
This type of mortgage rate does come with a huge monetary risk. If the central banks suddenly decide that the best way out of the current financial situation is to quickly hike the base rates, then mortgage holders with tracker mortgages are going to find payments suddenly shooting up.
At the moment there doesn’t seem too much of an attraction for new home buyers to take out tracker mortgages. With base rates already breaking the historic low, they can’t really be expected to fall much further. Yes, there is still some room to fall, but not much. If a tracker is for a few years, then there’s a good chance that during that time interest rates could rise above current levels in that time. And with interest rates being so low at the moment, banks have bumped up the interest increment that liesbetween the base rates and the interest rates that they are charging. Thus, when the base rate eventually recovers, be it in the next year or in a couple of years, there is a risk that tracker rate mortgages could be becoming very expensive.
There is also the current issue that some lenders have placed a lower limit on how far tracker mortgages will follow the base rate and in some cases, the base rate has already fallen below this limit. Therefore, the restriction has been triggered and the tracker interest rates are not following. Financial authorities are not happy with this and are looking into whether it is legitimate or should be stopped. Time will tell.
If you think that loan interest rates could drop even further and are happy that if they do rise in the future you will immediately be paying moreeach month , then tracker rate mortgages might be the mortgages for you. Check with a local mortgage broker that you have fully understood and can accept the associated risks.
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With interest rates plummeting to a historic low, now is a good opportunity to be searching for a new mortgage product in the hope of reducing your monthly outgoings, and hopefully a lot of cash in the future. But if you are beginning to compare mortgage interest rates, what precisely are all of these different types of mortgages available from the lenders?
To start off with, for about 30% of home owners, the fixed rate mortgage is the favoured type of product. With this type of mortgage you have agreed with your chosen lender that for an agreed length of time you will pay a fixed rate of interest. The fixed term duration might be a few months up to several years, it depends on the offers currently on the market. How good the interest rate is will vary by on how long you are fixing it for. The lesser the time period, the less risk there is to the lender that the rates could increase in that time period, so usually the interest rate offered is usually better. It is this fixed aspect of the mortgage that many mortgage holders do like. For the agreed period you know precisely how much you will be spending on your mortgage. There can be no interest rate rises to upset your budget. You know that unless you change your mortgage, exactly what you will be paying.
But this is not just seen as an advantage, it is also seen as a disadvantage. If interest rates do fall more, as has happened drastically currently, then the rate that you are paying doesn’t benefit. And this is the risk of this type of mortgage. You know precisely what you will be paying each month, regardless of whether interest rates increase or decrease.
Once your fixed rate mortgage is over, you can possibly then have a tie in period with the bank for which you have to stay with the lender on their variable rate mortgage. This is the payback to the bank when they have given you a good fixed rate mortgage. A variable rate mortgage is the basic mortgage that a lender will be able to offer. It is their basic no frills mortgage and changes with the base rate, although not always moving with the base rate exactly.
Usually mortgage brokers will suggest that all customers on the bank’s variable rate mortgages should review their mortgage and think about moving to another product, or bank. It is usually not reduced in any way and is at risk of going up with every rate change. Some time this type of product is seen as the bank’s way of earning money. They are typically no frills, no reductions and a sign that you should be reviewing your mortgage. If this is what you have currently got, then it is well high time that you decided to compare mortgage interest rates and find yourself a new mortgage.
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One step towards being a profitable trader is having confidence.In order to achieve this you must trust your system and what could be more appropriate than developing your very own forex strategy.
Developing a forex strategy is actually a very simple process if you follow this simple guide. Every trading strategy has at least three key elements:
1) timing your entry
2) when to exit the market
3) contract size
You must choose specific rules for each of this three steps. Let’s create a system right now! free forex strategies
1) Opening a trade
Rules for long trades:
- 5 SMA must cross above 8 SMA
- slow stochastic must be crossed and coming from the oversold zone
2) Closing a trade
You exit the market either when profit target is hit (50 pips) or when stop loss is triggered (25 pips).
3) Lot size
You calculate the contracts based on your risk tollerance.That means that if you have a trading capital of 10000 usd and you don’t want to risk more than 2% (200 usd) you divide that amount to the number of pips in your stop loss. 200/25=8 so you can trade 8 mini lots (1 usd/pip).
You’re done. We’ve developed a forex system. Next step? The first thing you should do right after, is manually backtesting it with a trading platform (i suggest metatrader). If successful try it on a live demo account for at least three months. If it passes this test too than you are ready to test it on a live account with real money.
But what if the backtesting fails? You can try applying filters to avoid whipsaws like “rsi must be above waterline for long trades and bellow for short trades”. Try different filters and see what happens. You can learn more about forex trading by visiting my blog free forex trading strategies
Another important aspect when developing a system is choosing a chart. If you are a day trader you will probably choose smaller timeframes like 4h,1h or 15 minutes. Anything smaller than 15 minutes seems noise. Instead if you are a position trader you will want to focus your attention to bigger timeframes like daily, weekly or even monthly charts. More complex strategy use multiple timeframes.
You should keep in mind that a profitable system must produce constant results over a long period of time without much drawdown.
Also you should test it on different pairs and choose the one that suits best. In this example a 25 pip stop loss may be appropriate for a pair like fibre but for gbp/jpy 25 pips is too little so be careful.
So why buy forex fx systems[spin] when you can create your own with a little effort. Besides i don’t trust people who sell [spin]forex strategies. I just don’t see the point. If you have a winning strategy that is 80% profitable why bother with selling it for pennies when you can make millions on the fx market?
Mortgages are difficult to find your way through for borrowers, make sure you don’t get lost!
Many borrowers think that hunting for a mortgage can be quite overwhelming, and who could really blame them. If you have never experienced a mortgage before then understanding mortgages can be very difficult work. There is always a lot to take in to begin with, a load of words and phrases you have probably never heard of and a whole array of mortgage types thrown in just to try and confuse you. Not forgetting the fact that a mortgage is going to be the largest financial transaction you will be part of in your life, at least until your next mortgage! So what do you need to know before you start to compare mortgage rates?
To understand mortgages easily, a mortgage is a loan from a building society you use for the purchase of a property. The property is then held by the mortgage lender as security until the whole amount of the loan has been repaid along with the associated interest payments. Paying off a mortgage can take a very long time, 25 years or longer.
To try and confuse you many mortgage lenders like to use a variety of words for different things. Some banks may refer to themselves as a mortgagee. This is basically the legal name for the mortgage lender. They may also refer to you by the word ‘mortgagor’. This is the legal name for you – the mortgage holder or borrower.
When paying back your mortgage there are two alternative methods you can choose to go about it. The first mortgage repayment method is the capital repayment method. This type of repayment is where you pay back the interest on the mortgage along with a small amount of the initial borrowing each month. This will continue until the whole amount of the loan is repaid to your mortgage lender.
The second method is by paying the building society the interest only for the term of the loan. This type of repayment is where you will only pay back the interest on the initial mortgage each month, and the loan itself is paid back by using some sort of investment that runs along side the mortgage. This is very dependent on ensuring a reliable investment that will guarantee to pay off the loan at the end of the period. Endowment policies have been used for this in the past and other borrowers have relied on increasing house prices to secure the repayment of their loan. Obviously, both of these methods are not without their worries!
As it is for everything, mortgages are different for every borrower. There is a different type of mortgage for nearly every situation and finding the correct one can sometimes be tricky. Speaking to a mortgage broker or mortgage advisor if you have never done it before can be a very worth while task and they can help you to compare mortage interest rates. There is nothing worse than having a loan that isn’t the correct choice for you.
The only thing you need to know in foreign exchange in order to become a professional trader is self discipline.
This is more crucial than any fancy forex trading strategy you will ever learn. This is the actual key to success. Discover more here -> forex trading tips
And by self discipline i mean the fact that you must have a plan before entering a trade. Do not trade based on impulse because you will get emotional and you will make mistakes and in the end you will loose money.
Having a trading plan makes the difference between professional forex traders and amateurs. Fx can be very easy and productive if you follow this simple tip. Never trade without a plan. You can learn more here -> forex strategies.
Do you believe that other traders who succeed in this business have a special trading system? NO! They know about forex as much as you and they use simple systems but their “secret” is self dicipline. You need to learn to develope patience!
Money management is a part of this self discipline rule. They never risk more than 2% on any trade they make no matter how sure they are regarding the outcome.
Do not try to bend this rule by trading multiple usd pairs in the same direction like buy eur/usd and buy gbp/usd, it’s the same thing and instead of risking 2% you are actual risking 4%.
Loosing streaks happen to profitable fx traders too, you can’t avoid that, the difference between you and them is that they don’t get angry when this happens because they never risk more than 2%. Not getting emotional helps them steak to their trading plan and live to trade another day.
Capital preservation is their main goal and it should be yours too. Remember that you are not a gambler, you are a forex trader so don’t gamble, plan your trade and than trade your plan.
Foreign exchange is a very rewarding business and has numerous advantages compared to a traditional job like the fact that you can trade from any location in the world, you don’t have a boss and you can make your own schedule. All this “perks” make forex trading the best home making money opportunity.
All you need is a pc, an internet connection and an account with an online forex broker.
Before investing real money you should demo test your strategy/system for at least 3 months. If you are profitable you can than move to a real trading account. There are dozens of forex brokers offering free demo accounts but the best starting broker i know is Marketiva. They even give free 5$ to start trading with mini lots.
I know you’ve heard this before but only invest money you are “comfortable” loosing. You shouldn’t invest your lifetime savings because again you will become emotional and make mistakes.
How Swapping Mortgage Rates Isn’t Always The Best Way To Reducing Outgoings
Many homeowners are seeing their current mortgage products coming to an end and are thinking about moving to a new mortgage to save expenditure. But is it always the case that a lower rate mortgage is cheaper in the long run?
On the face of it, if you can reduce your monthly mortgage costs by half a percent then you could be saving yourself a lot of monthly expense. This could be a saving that you can spend elsewhere or if you are unlucky and expecting a huge rise in mortgage outgoings, just a reduction in the increase of the monthly cost.
Using mortgage comparison charts tell you what remortgage is the cheapest on the market today, but is it right for you? More importantly, will it actually save you money in the long term?
Although interest rates have tumbled at the moment and are expected to continue this way for some months, some experts believe a reduction is on the cards in the near future. So if you lock into a 2-year, 3-year or longer fixed term mortgage, by the end of the term you might be paying more than a variable remortgage if you had continued as you are.
On the other hand, we could be surprised by a recovery and interest rate rises and then you would be winning. That’s the nature of this game. But this isn’t the only area in which you could be spending a lot more than you need to.
Look closely at those best remortgage offers that you see in mortgage charts and read the small print. Look for the upfront fees – arrangement fees, legal fees etc. Take a look at your existing mortgage, how much is involved in exiting that? There may be exit and deed release fees. These fees may also exist in the new mortgage – are they significantly higher than the current mortgage – that’s as good as a cost in the future?
When you look at these costs, how much will you be paying to change your mortgage? Many lenders allow you to add this to the borrowing, but then you are paying extra interest on them for the duration of the mortgage. Even more outgoings each month!
If you are able to pay these fees at the time of the move then in the long term that way is going to be cheaper. But then look at your existing mortgage. If you are having to pay £2,000, maybe even more to swap mortgages, could you instead pay off a small chunk of the mortgage, or at least put that cash away in a high interest account instead? Then take a look at how that would offset your payments – or work out what your net payments are after the money put aside earns some interest.
Changing to a new building society may not always be the right thing to do. First, speak to your building society and see what monthly charges they can get you down to with your existing mortgage. Then, instead of relying on tables to find how to compare mortgage rates, speak to a few mortgage brokers and get them to do all of the leg work for you and write down exactly what you will be left paying each month.
Overviewing The Main Types Of Remortgage Products Available Currently
Plenty of mortgage payers are currently finding that their existing mortgage products are reaching the end of their period of benefits and are now having to shop around the markets for a new mortgage. This is being made tricky because many remortgages are not suitable for all mortgage holders. So if you are desperately trying to compare today’s mortgage rates of everything available, what are some of the main types of mortgages offersavailable on the mortgage market today?
Fixed Rate Remortgages Offers – this is the most simple idea and a very popular option. For a set period of time you agree with your bank what the interest rates will be that are applied to the mortgage. Once you come to the end of this fixed rate period you may be free to move to other products within the same building society; you may be able to move to another bank or you may have to stay with your current building society for a the remainder of an agreed term at their variable rate.
The advantage of a fixed rate mortgage is that you know exactly what your repayments will be during the term. The disadvantages – well if rates drop more, then your payments are not going to be affected. And if rates do climb, then at the end of the fixed rate period you are going to be in for a rather unpleasant surprise.
Libor Rate Mortgages – these are based around the rate at which lender are lending to each other. At the moment, maybe not a good choice with lenders struggling to lend and borrowing between themselves. But if you feel that the banking situation is set to recover and don’t want to depend on the central banks making rate cuts, then this can be a possibility.
Capped Rate Mortgages – this is a combination of the fixed rate mortgage offers and the lender’s standard variable rate. Your mortgage follows the changes to the bank’s mortgage rates as they would if you were on the standard variable rate, but there is a cap to the maximum interest rate the building society will charge you. If interest rates climb above the capped level, you have the security of knowing that your payments aren’t increasing all the way. Better still, as interest rates fall, so will your repayments. The disadvantage is that the capped rate can sometimes be significantly higher than the equivalent fixed rate.
Tracker Mortgages – these offers usually track the central bank’s interest rate, with a small increment in addition. Whenever the base rate is altered the rate you are charged will change. This can be great in a volatile market when the building societies are not following the base rate changes closely, but watch how much you are paying over the base rate, just in case another type of mortgage is better. Also, you really are at the mercy of the base rates – every time they change your payments alter. And not all of these payment changes are going to go in your favour.
Whatever mortgage offers you are thinking of, make sure that you compare mortgage rates for a few different types of interest rates and ask a broker to show you what is best and make sure that you are opting for the type of remortgage that really is best suited to your needs and financial outlook in life.
Searching For A New Mortgage Is Much Harder Today Than Last Year.
With mortgage loan rates currently dropping so quickly, you may be wondering if now is the time to swap mortgages to see if you can get yourself a better mortgage, which over the long term will save you money. But is this as easy to do as it was last year? Keith Lunt looks at how difficult this has now become.
Frankly, no. It is now far from easy to find yourself a remortgage deal. The lenders have reacted to the current credit crisis by making it far harder to obtain a remortgage and at the same time many of the banks themselves are finding it harder to obtain the money they need for lending to borrowers. If they can’t get the money, they then have to further limit what they lend.
Many of the big lenders have now taken away their easy going remortgagesand are instead making it much harder for potential customers to take out a mortgage. They are putting huge boundaries around their mortgage deals that potential home buyers have to be able to climb before they stand any chance of obtaining a new mortgage.
Aside from the fact that a lot of the building societies have increased the basic remortgage charges, making mortgage far more expensive just to take out, many have taken away deals that would appeal to the home buyers the lenders are now worried about not being able to keep up repayments. They are securing themselves for the future by only accepting remortgage requests from those borrowers that they are convinced will always be able to pay back their mortgage. They are protecting themselves from the gamble they once used to take of risky lending in return for a high rate of return.
An example of this that is clear to see is the removal by the lenders of the 125% remortgage. Now you would be struggling to find a bank willing to give you 90% of the house value as a loan. And in a lot of cases, even securing more than 75% of the building value has become extremely difficult.
So what can you do if you want to change mortgage and find a new remortgage rate to save you some cash, and take a benefit from falling mortgage rates? Well you can compare mortage loan rates yourself and see what is about, but many of the rates on offer are only available for certain types of borrowers. It is more efficient to approach a local mortgage broker and get them to check remortgage rates for you instead. This need not be a difficult search. Many websites offer this contact service, so you can still effectively do the search over the internet. And by using a free service, you are saving yourself time, and hopefully cash.
Finding A New Mortgages Does Seem Like A Good Idea, But Not For All.
Mortgage completions are falling to a low and the bank’s base rate is predicted to hit an all time low. Is this the time to be hunting for a mortgage?
Well, it all relies very much upon your own personal financial circumstances. If you are locked into a deal with redemption penalties then looking for a new deal might cost you more that it would save you. But if your current product is approaching the end of the penalty term, or has finished any lock in periods, then it might be worth trying to compare today’s mortage rates to see if there is a lower cost product out there on the market.
There is also, sadly, another group of people for whom finding a new mortgage rate might not be an easy or a cheap option. If you are unlucky enough to have bought your house within the last couple of years, then with the plummeting property prices currently seen in the market, it’s possible that at best your property is worth only what it was worth when you bought it. At worst, for those that bought at the peak of the property prices, it is likely that you have lost quite a large chunk of what you paid for the property.
The problem here is that you could find that your current deal borrowing is too high for the lenders to be happy to lend to you. For example, if they were happy to lend you 90% of the value when you bought the house and it has now dropped in value by 10%, although the amount borrowed would be the same, the amount as a percentage of the property value has shot up to 100%. Many banks are now dubious about such high lendings, in a lot of cases penalising those who are borrowing more than 75%. So although your borrowing might have seemed OK to the building societies when you took out your current mortgage, now they might not touch you with the proverbial barge pole.
And it’s not just those that have suffered property price drops that are in this difficult position. Until recently some banks would actually lend up to 125% of the property’s market value. If you were in this position when you took out the mortgage, unless your property value has risen by almost 40% or more, you would still be looking to borrow more than 90%. This would leave a lot of banks unlikely to be willing to help you.
If you are stuck with an expensive mortgage and want to move to a cheaper one, then the mortgage market can be a mine field. Make sure that you contact a mortgage advisor and let them compare mortgage rates for you, to see if they can find some good products for you.
Keith Lunt writes on behalf of the comparemortgagerates.co.uk website, where you can find useful information about mortgage rates and contact a local broker who may be able to assist you in finding a new mortgage deal.
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