UK: Mortgages up 25% in March

The number of mortgages advanced for house purchase increased by 25% in March this year, compared with the previous month, according to the Council of Mortgage Lenders (CML).

The number of first-time buyers rose by 27% over the same period, while remortgage numbers increased by 23%.

However, the CML warned that remortgage figures remain weak, and are expected to stay this way for some time.

Mortgage lending also recorded a 45% year-on-year increase, marking the ninth consecutive month of annual increases.

Michael Coogan, director general of the Council of Mortgage Lenders, said: “Today`s figures indicate there is currently some momentum to house purchase lending, but for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis.”

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Ask basic mortgage questions before you choose a lender

If you want to get a loan to purchase your home, you have to go to the mortgage lenders. You need to shop for different lenders and choose the one that suits you the best. Before choosing a lender, you should ask him some mortgage questions. If the answers are satisfactory, then you can start your deal with him.

The most important mortgage questions that you should ask your lender are:

• What is the type of interest rate on the mortgage and can it be readjusted over the loan period?
• If I can’t afford 20% down payment, is there any offer of low down payment? Do I need to have a PMI?
• What will be my options if I want to go for refinance?
• How much will be my interest rate lowered if I buy discount points?
• What will be the charge towards origination and closing costs?
• Will I be able to pay off my loan before the loan term? Will there be any prepayment penalty?
• What are the things covered (like, principal, interest, property tax, homeowner’s insurance, etc) in my monthly mortgage payment?
• When can I lock-in my interest rate and do I have to pay any charge for this?
• Is there any offer of getting grants or tax-relief or any other benefit?
• Will you give me a detailed break-up costs related to third party vendors, like, cost for appraisal, credit report, taxes, recording fees, lender’s title policy, etc?
• Will the lender guarantee the GFE (Good Faith Estimate)? Will the GFE contain all the costs of your loan?
• Is there any special mortgage for the first time buyers? (You can ask this question if you’re buying home for the first time)
• How much time do you take for processing the loan and get it approved?

You should have satisfactory answers from the lender before you finalize to get the loan from him. You should ask the basic mortgage questions mentioned above to different lenders and after scrutinizing their answers choose the one who is the most suitable for you.

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The size of the losses could exceed the £900m of last year, though the switch in its strategy from repaying a £27bn government loan to becoming a major engine of lending growth makes calculating the size of the loss difficult.

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