Bad Credit Mortgage Lead

Borrowers warned not to rush in wake of interest rate hike

Leading mortgage lenders have warned against the temptation of fixed rate deals, in the wake of the Bank of England's interest rate rises.

Those seeking bad credit mortgages or lifetime mortgages might opt for a deal where interest rates were guaranteed to remain the same over time. This is as opposed to a tracker mortgage, which would correspond to changes in base rate as governed by the Bank of England.

Interest rates went up to 4.75 per cent last Thursday, but Ray Boulger, spokesman for independent mortgage provider Charcoal, told Reuters that this it was not necessarily a good idea to go for a fixed rate loan: "If base rates are going to go above five percent and stick there for a while, then it makes sense to take a fixed mortgage.

"But if it is not going to go over five percent, and I don't think it will, then a tracker mortgage makes far more sense," he continued.

Low rates forcing mortgage fee rises

According to a report from MoneyExpert.com, the cost of applying for a mortgage has risen by almost a quarter in the last 12 months alone. The research suggests that mortgage lenders are trying to remain profitable whilst at the same time provide market-leading products to customers when even the rates on bad credit mortgages are relatively low. The average fixed-rate home purchase loan arrangement costs £494, up 22 per cent, MoneyExpert.com says, while the arrangement fee for a discount mortgage currently stands at £407 – an increase of 15 per cent from 12 months ago. "Borrowers need to budget for application fees when they take out a mortgage," said Sean Gardner, MoneyExpert's chief executive. "What you believe is a cheap deal saving you, for instance, £100 a month won't look quite so good when you add on application fees." Mr Gardner noted that because the base rate of interest had remained unmoved for almost a year, mortgage providers were looking at new ways to maximize their profits on fixed-rate products.

Local firms urged to join PoMSOX

LOCALLY-owned companies have been urged to list on the Port Moresby Stock Exchange so that shareholders could benefit more from their investments.
The call was made by Rob Allport, Credit Corp PNG Ltd general manager, in a remark at the 2006 Money Show last Friday.
Held at the Holiday Inn, the exhibits team was Charting your path to growth.
Mr Allport said listing on PoMSoX had been of great benefit to the shareholders of Credit Corp because they are now able to buy and sell shares readily on the exchange, whilst their share value has increased dramatically.
We have found the advantages of listing to include increased share value, proper pricing, and liquidity of stock, and down the track when the need arises it should be a good avenue to raise capital, he said.

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