How much is that house in the window?Written by Richard Green
With recent release from UK's biggest mortgage lender, Halifax, of its latest house price report for May 2005, showing that prices fell by 0.6% last month, and prices falling just 0.1% since start of year, bank said that market is broadly flat. Nationwide however released its survey last week, showing a 0.3% rise in May. Commenting on figures for March, Nationwide confirmed that 0.6% fall in property values was steepest monthly fall they had seen for nearly 10 years, however, just a few days after Nationwide released its survey, Halifax reported a 0.5% rise in March prices. Mortgage comparison site Moneynet reported a slight increase in March, primarily for high income homeowners. The diversity of house price surveys dilutes consumer recognition of trustworthy media; where should you look for accurate and up to date information?Land registry reports ( http://www.landreg.gov.uk/propertyprice/interactive/ ) All property sales from England and Wales are logged by Land Registry, and so this report provides an extremely comprehensive source for residential property sales. The land registry reports can provide useful information for both for national and local comparisons. One drawback however is that report is only compiled every three months, making figures out of date even before they are released. For a small fee, a similar survey is available for properties within Scotland at Registers of Scotland Executive Agency (http://www.ros.gov.uk/index.html) Government house price index This is a recently launched government survey into house price index, reported on a monthly basis. Using lending information from about 50 lenders, this includes a first-time buyers index, as well as former owner occupiers, regional, and UK indices. Unfortunately, like Land Registry reports, there is at least a two month arrears in statistics being released. While government is trying to improve this survey, it is hampered by limits on information provided by lenders, and has been described to BBC by a government spokesperson as "The slightly less than definitive index". The implementation of National Property Database, which is currently under development, should help to provide better information about property types, and expansion on information available for geographic areas such as commuter belts.
| | Guide to MortgagesWritten by John Mussi
A mortgage is a loan that is guaranteed by a property. At its most simple that means, if you can't pay back your loan lender can force you to sell your home so they can get their money back. Typically you can borrow three to three and a half times your income, or two and a half to three times joint income of you and your partner. These are known as income multiples. The amount you can borrow will also depend on value of your home. Most lenders will allow you to borrow up to 95% of value of a property. The loan rate is set by lender, and is called standard variable rate (SVR). Always shop around for best rates. However you must be careful to ensure you are comparing like with like. To do this check annual percentage rate (APR) of loan. You also need to bear in mind that interest payments in respect of fixed rate mortgages can rise steeply once initial 'fixed' period ends. Therefore your planning should always include possibility of sharp changes to future interest payments. There are two basic species of mortgage, repayment and interest-only. The option you choose is determined by way you want to repay your loan. Depending on type of mortgage you choose, your monthly repayments will be made up of either capital and interest or interest only. A repayment mortgage requires you to pay back both interest and loan capital, so at end of your mortgage period there is no money owing. With a repayment mortgage you make repayments monthly for an agreed period (the ‘term') until you've paid back all loan and interest. A typical term is initially 25 years, although it can be any amount of time – shorter term higher your monthly payments but less you'll pay overall.
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