The Financial Blog

First Direct have begun selling mortgages to new customers once again. First Direct put a stop to new mortgage customers on 1st April because it had 5 times the number of mortgage applications than expected. First Direct say that the hold on new customers was put in place so that they could ‘restore service to the standard people expect from the bank while continuing to meet the mortgage needs of existing customers’.

First Direct’s chief executive, Chris Pilling, said: “Last month we took the bold decision to withdraw from mortgage sales to non customers to allow us to process the huge number of enquiries we had received and focus on the excellent service we want to provide for our customers. We’ve now assessed all the loan applications outstanding from 1 April and earlier and let everyone know the outcome. We’ve honoured the fixed interest rates available when people first contacted us about their mortgage. 

“I’d like to thank customers for their patience during recent weeks and also to pay tribute to our team at first direct who have burned the midnight oil to complete a year’s worth of mortgages in just three months.” 

So from today you can get the following mortgages if you’re a new or exisiting customer;

• 2 year fixed rate at 5.76% (6.3% APR); £499 booking fee and £1,499 arrangement fee
• 2 year fixed rate at 5.99% (6.2% APR); £99 booking fee and £399 arrangement fee
• 5 year fixed rate at 5.98% (6.2% APR); £299 booking fee and £299 arrangement fee
• 10 year fixed rate at 5.99% (6.2% APR); £299 booking fee and £299 arrangement fee

The mortgages above revert to the Bank of England standard variable rate at the end of the fixed term. Maximum loan size allowed is £400,000 and the maximum loan to value ratio allowed is 80 per cent.

Don’t forget to compare mortgages to find the lowest rates!

>>Click here to compare mortgages

Tesco home insurance is offering an amazing 33 per cent discount on home insurance and an additional 10 per cent discount if you buy online. This offer is available until 21st June 2008.

The 33 per cent discount applies to buildings and contents insurance cover during the first year’s premium of the policy.

Head of Home Insurance at Tesco, Allan Burns, said: ” This represents a substantial discount on home insurance. Even if your policy doesn’t expire in the next couple of months, it’s worth getting a quote to see what’s on offer.”

And that’s just what I’d do - get a quote. You have to be wary of offers like this; I’m not saying this is a bad offer but you need to check out the facts.

What exactly is the price? Of course insurance premiums and the total cost of an insurance policy will vary because each person and house or car is different. I also think that these kind of offers are great for grabbing headlines but how do you really know you’re getting a 33 per cent discount? A 33 per cent discount on what price? - you don’t know! Becuase Tesco tell you how much you have to pay for your premium!

Make sure you compare insurance by using a comparison website there are plenty to choose from; Moneysupermarket.com, Moneyexpert.com, Gocompare.com, comparethemarket.com, Moneyextra.com and I’m sure there are more I’ve missed, confused.com!

Of course you could check out Tescocompare.com the other arm of Tesco >>Click here to visit Tescocompare.com

>>Click here to compare home insurance

>>Click here to compare motor insurance

Moneyexpert.com say that loan rates are still increasing even though the Bank of England has cut interest rates 3 times in the last 6 months. Personal loans or unsecured loan interest rates have increased by up to 1 per cent and Moneyexpert.com say that it is cheaper to borrow more if you’re loan application is accpeted.

The average rate for a £5,000 loan is now 10.16 per cent compared to 9.44 per cent in November 2007. The average interest rate for a £7,500 loan has increased by 0.91 per cent to 8.88 per cent, compared to 7.97 per cent in November 2007.

Moneyexpert say that approximately 1.38 million people have had loan application rejected in the last 6 months as lenders issue stricter criteria when it comes to approving loans.

Founder of MoneyExpert.com, Sean Gardner, said: “The Bank of England has a battle on its hands to restore confidence in the credit markets when lenders react to three rate cuts totalling 0.75 per cent by actually increasing rates.

“The unsecured loans market is almost mirroring the mortgage market where the issue is not so much rates but availability - whether or not lenders will let you have the cash.

“However it remains the case that creditworthy customers can still access competitive deals and borrowers should research the market carefully before making an application.

“And you will pay lower rates on average if you borrow more. Lenders take the view that those borrowing more are generally a better risk than those borrowing less and offer better deals as a consequence.”

>>Click here to visit Moneyexpert.com and check out their loan tables

Click here to compare loans now!

New research from Alliance and Leicester mortgages reveals that 76 per cent of it’s mortgage brokers feel that their role is changing because they have to provide their clients with more advice and insight than 6 months ago. The main reason behind this feeling is that consumer confidence is low when it comes to the housing market and also the economy.

Mortgage Mortgage advisers say that more and more of their time is spent providing guidance and advice to clients. This isn’t, however, seen as a bad thing by brokers because they believe this will secure long term business relationships and long term clients which is a good thing for the future.

Raj Uppal, Director of Mortgages at Alliance & Leicester, said: “Borrowers are becoming increasingly aware of the importance of making the right mortgage choice and that they can take advantage of brokers’ wealth of knowledge to ensure this. Instead of simply using a broker to source products, borrowers are now making the most of their advisory services to learn about affordability and extend their product understanding.”

“Very positively, those brokers who have devoted time to working closely alongside clients in a more advisory capacity feel that their efforts will be rewarded in the future with better client relationships and ultimately result in higher business income.”

>>Click here to get mortgage advice

>>Click here to compare mortgages and find the lowest rates

Abbey has announced cuts to some of it’s mortgage range.

This is a bit of a disapointing cut in mortgage interest rates by Abbey to be honest, I say that because Abbey has only cut interest rates on it’s 75 per cent loan to value mortgages. Therefore anyone with less than 25 per cent equity in their home can forget these rate cuts applying to them.

The new rates are below and apply to all 75 per cent Loan to Value (LTV) mortgages;

Abbey’s 2 year fixed rate mortgage deals:

• 2-year fixed rate mortgage - 5.95 per cent with £995 fee
• 2-year tracker rate mortgage - 5.97 per cent with £999 fee

Abbey’s 3 and 5 year fixed rate mortgage deals:

• 3-year fixed rate mortgage - 5.87 per cent with £999 fee
• 5-year fixed rate mortgage - 5.75 per cent with £1,499 fee

A spokesperson for Abbey Mortgages said: “Our focus is to provide all of our customers with value and choice, whilst continuing to review our mortgage range and rates against a competitive and dynamic market. As such, we have taken the opportunity to reduce rates to a small number of fixed and tracker products within our range.”

“Over the last two years, we have been carefully maintaining a balance between the profitability of new business, prudent lending criteria and our market share aspirations. Whilst current market conditions remain challenging, this sensible approach to risk has proved very resilient and allows us to reward lower fixed-rate LTV business with competitive rates.”

“The current mortgage market poses an opportunity for financially strong lenders such as Abbey. Last month we announced a UK net lending share of 16 per cent, and since then we’ve seen an exceptionally strong pipeline of new business, as well as continuing to benefit from the improvements we’ve made in retaining our existing mortgage customers.”

I suppose this small cut in mortgage rates will be of benefit to some people, it’s just a shame that the rates cuts can’t be a little bigger and accross more of the product range. It’s better than nothing I suppose!

>>Click here to compare Abbey mortgages with other products & find the best rates now.

From Monday, 19th May, Yorkshire Building Society is launching a 2 year fixed rate savings bond paying a market leading rate of 6.50 per cent, Gross PA with a monthly interest option for people who may rely their savings for an income.

The new fixed rate savings bond is available for a limited period only and you’ll need a minimum deposit of £100 to open the account. The offer is open to new and existing customers so everyone can take advantage of this great rate.

Yorkshire’s Head of Mortgage and Savings Development, Chris Edwards, said “There are currently some great interest rates available, but they are mostly just for one year. We have no idea where interest rates will be next year, but with this new bond savers are guaranteed of a great rate, and therefore peace of mind, for a longer period.  We will however be limiting the amount we take into this new bond and I would therefore urge savers to act quickly if they want get this market leading rate for their savings.”

You can apply online at www.ybs.co.uk or call them on 0845 1200 100 or go to your local branch.

Make sure you >> Click here to compare savings rates and get the best deals available.

The Coventry Building Society is increasing the interest rate on it’s 50 plus esave account from today.

The new rate is 6.10 per cent AER/Gross PA, fixed for 12 months from the date an account is opened. The account also offers unlimited access to your money so no fees or penalties are payable if you need to withdraw.

You can open a 50 plus esave account with just £1 deposit and you must operate and open the account online so get to www.thecoventry.co.uk and apply online today!

>>Click here to compare savings accounts and find the most competitive rates

New research from Moneysupermarket.com reveals that more and more people are taking out short term payday loans to tide them over when their monthly finances are stretched to the limit. Since September last year Moneysupermarket.com say that there has been a 55 per cent increase in the number of paydays loans taken out.

Payday loans are short term but expensive loans. For example if you needed an extra £80 one month becuase your car had broken down, you could look into getting a payday loan to tide you over. Typical APR’s on a payday payday loan are around 25 per cent so you’d have to pay back £100 if you borrowed £80. The term of a payday loan is only 30 days so you need to ensure you can afford to pay the money back quickly.

Given the high APR involved with this kind of loan, a 55 per cent increase over such a short period of time is staggering. It shows the increase in living costs is stretching families on a tight budget.

Head of loans at Moneysupermarket.com Tim Moss, said: “The rise in payday loans is astronomical and symbolises just how difficult people are finding it to cope day to day. As disposable income is being squeezed through increases in the cost of food, fuel, utilities and general living necessities, these loans are increasingly used to help those on a tight budget.

“Payday loans can be useful as a short-term credit vehicle. They are a bit like taxis -convenient for short journeys, but if you are going a long way, there are much cheaper ways to travel.

“They should only be taken out when it’s absolutely necessary and you are sure you can pay it back quickly. Anyone looking for longer term credit or unable to pay off the debt immediately, should steer clear of them. It would be wiser to borrow the cash from family or friends or arrange an authorised overdraft with your bank.”

Probably the best thing to do is review your finances and see how your money is spent every month, there may be ways to cut unneccessary spending and save money for those unexpected financial emergencies.

If you’re looking for a bigger loan then >>Click here to compare loans and find the best deals!

Figures released from the Council of Mortgage Lenders (CML) show that more first time buyers then ever are looking for advice from mortgage advisers when it comes to finding the best mortgage rates and also the best mortgage for their needs.

The figure has increased to 82.5 per cent of first time buyers in the first quarter of 2008 compared to 72.5 per cent the same time last year. The figures also show that mortgage advisers are responsible fror 79 per cent of all remortgages, again a 10 per cent increase on the same time last year.

It just goes to show that people are open to and actively seeking professional financial advice when it comes to their mortgage and their Remortgaging.

Richard Farr, Director of the Association of Mortgage Intermediaries, said: “Mortgage intermediaries are playing a vital role in the current market place as first time buyers struggle to find a mortgage deal. The CML figures demonstrate the demand for advice from consumers, and the ability of intermediaries to find a good deal even during difficult times.”

“Consumers clearly value the advice they receive from mortgage brokers. It is important for government, regulators and the industry to recognise the value of intermediaries to consumers. Intermediaries are able to identify the most suitable product for the consumer at a competitive price and analysis of consumer attitudes show they value this advice much higher than that provided by the lenders. In these difficult times it is more important than ever for consumers to access good advice.”

>>Click here to find a local Independent Financial Adviser in your area Or >>Click here to compare mortgages online today!

LV= announced today that it will not charge customers a fee for most general insurance policy amendments.

This is something that has recently been reported in the press; that most insurers will charge their customers an administrational fee for making amendments to their policy details.

Things like changing your address, amending the level of cover you require or even if you canel your policy some insurers will charge you an admin fee. LV=  now say that policyholders will not have to pay admin charges if they amend cover levels, change address, or cancel due to reasons outside of their control*

Managing Director at LV= general insurance, John O’Roarke, said: “We believe in offering good quality insurance policies, at competitive prices, with no hidden costs.  We know that customers often have to make minor amends to their policy for reasons out of their control and we don’t think it’s fair to charge them admin fees for this.”

“At LV=, we operate a culture where treating customers fairly is central.  This is a clear example of how we go further than most general insurers to provide a more transparent service”.

* Fees will only be charged for customers who wish to cancel their policy for reasons within their control, when there is a change of vehicle or driver and a request for duplicate documents

LV= offers car insurance, home insurance, travel insurance and pet insurance direct to consumers by telephone from UK call centres in Bournemouth and Croydon and online from the website: www.lv.com

>>Click here to compare LV= with other insurance companies