If you’re a key worker or council tenant in East Anglia or the South East you could be eligible for a new loan. The government has offered to lend 17.5% of the purchase price interest free to first time buyers who qualify for its Open Market Homebuy scheme.
The loan will still need to be repaid - so when you sell your property 17.5% of the proceeds will go back to the government. However, this is still the cheapest credit you’re going to find, while being able to put down a 17.5% “deposit” could make it easier to get a better mortgage deal.
Funds for the scheme are limited, so if you think you could qualify and are looking to buy your new home, contact your local Homebuy agent asap.
The financial week that was . . .
The conflict over overdraft fees continues. HSBC revealed on Monday that it has paid out £120 million to over 70,000 customers who were fined for exceeding their overdraft limit or bouncing a cheque. In contrast, Lloyds TSB has only repaid £36 million. Meanwhile barrister Tom Brennan, who was taking Natwest to court over their overdraft charges, has had his case dismissed on the grounds that it would duplicate the action being brought by the OFT in the High Court over the same issue.
If you’re thinking of switching your mortgage, look out for hidden charges. Not only do banks and building societies typically charge their customers for changing to another lender, but many increased these charges to more than they were when the customers first took out the mortgage. Some homeowners have seen mortgage exit fees double during the course of their mortgage.
Back in January the FSA, the City’s financial watchdog, warned mortgage companies that they should not be increasing these mortgage exit fees without good reason and the only likely good reason would an increase in the companies’ administrative costs.
On 1 August, the FSA gave an update on how mortgage lenders have responded to their warning. Many lenders have reduced their fees back to what they originally were and some, such as Halifax, are scrapping their exit fees all together
If you recently changed mortgages and were charged a higher exit fee than stated in your original contract, you may be eligible for a refund so. Watch this space.
Britons now owe almost £1.35 trillion, according to the latest debt statistics released by Credit Action on Wednesday – that’s £28,600 for every adult in the UK. Unsecured lending increased by less than £1 billion, while secured lending shot up by £9.6bn. The average household now owes £96, 648 on their mortgage.
HIPS have finally arrived. From Wednesday, anyone selling a house with more then four bedrooms is obliged by law to provide a Home Information Pack to prospective buyers. However, don’t panic if you want to sell your home and can’t get hold of the official assessors, as at the moment you can put your house up for sale once you have commissioned a HIP.
But a sigh of relief for homeowners on Thursday, as the Monetary Policy Committee, the independent body responsible for setting interest rates, decided to keep rates on hold at 5.75%. Although this means that the cost of borrowing will remain constant for the next month, rates are likely to rise in the future, with many analysts predicting that rates will hit 6% by the end of the year. So if you’re thinking about taking on any new borrowing, make sure you’ll still be able to afford the monthly payments if interest rates rise by another 0.25% - why not check, using the MoneyBasics mortgage calculator. Meanwhile, new data also out on Thursday revealed that over 8 million Britons have unsecured debts of over £10,000, with a quarter of these borrowers already struggling to meet their monthly repayments.
And almost 27,000 individuals became insolvent during the second quarter, according to the latest figures from the Government Insolvency service released on Friday. Between April and July, 26 956 people were declared insolvent, down 8.1% from the first three months of the year. However it’s still 1087 more people going insolvent than the same period a year ago. If you’re struggling to make the minimum monthly payments on your debts – seek free and independent debt advice today.
Finally, over the weekend the government has been calling for the £400 million which is sitting in dormant banks accounts in Britain to be either claimed or used for good causes. So think very carefully – do you have a stash of cash somewhere that you’ve just forgotten about? If some of that £400m is yours then now is the time to claim it!
Prepared for Moneybasics by Adela Read