Online mortgages and information to step onto the property ladder, best mortgage rates uk

BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents ....more

Before you decide on a mortgage, work out how big your budget is and how much you'll be able to repay each month. Mortgage lenders will calculate how much they're willing to lend you by looking at your income.

Commonly you'll be able to borrow 3.25 times your salary on a single income. For joint borrowers you'll typically be offered 3.25 times for the first income, plus one times the second or 2.5 times the joint incomes. Some lenders may offer you more depending on your circumstances.

Don't overstretch yourself because you could find making repayments difficult if interest rates increase or your situation changes. When calculating your budget you'll also need to include added costs such as the loan for a deposit - if you haven't money saved for this - buildings and contents insurance and life insurance.

Budget for service charges

You may also have to budget for service charges if you're looking to buy a leasehold property. There'll also be initial costs, such as solicitors' fees and stamp duty.

Calculate your monthly outgoings, such as utility bills and credit card or loan commitments. When you subtract this from your monthly income you should have a good idea of how much you can afford to make in mortgage repayments.

shop around

Once you've worked out how much you can afford to borrow you can start shopping around. You can do this online or get advice from an independent financial adviser or mortgage broker.

If you decide to go with a broker or adviser, try to find out if they're independent. If they're linked to one or more lenders you may find your choice of product is limited. Or you could go straight to individual mortgage lenders for information about their products.

word of warning

Whichever product you go for, take your time and consider all your options before signing up.

There are some competitive deals to be had but if something sounds too good to be true, it probably is, so don't rush into anything you're not sure about.

Don't be pushed into anything you're not completely happy with and don't be afraid to ask questions, because once you're locked into a mortgage it may be complicated and costly to change.

It's the biggest loan for the most important purchase that you're ever likely to make, so impulse buying is definitely not a good idea.

The Money Programme uncovers massive mortgage fraud

BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages.And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin.An undercover investigation for The Money Programme – Mortgage Madness (Wednesday 29 October, 7.30pm, BBC TWO) shows adviser Fraser Wright at Townends saying: "I've done it for myself and for my personal friends. Just remember what you put on the form and make sure the mortgage is always paid."Mr Wright told the programme's undercover researcher he had claimed to have earnings of £100,000 a year on his own mortgage application."It's a walk in the park," he boasted. "They don't know."Martin Ridge, a mortgage adviser recommended by Haart, told the undercover researcher to state their income as £56,000.He said: "It is lying, but that's what you have to do."Dr Desmond Fitzgerald, an expert in financial markets who advises financial institutions and regulators, said: "Over the past two years most forecasters, including myself, expected the housing market at best to stabilise and more likely to fall."Instead it's powered ahead. Now clearly if there is this extra flow from these fraudulent self-certified mortgages, that will push hundreds of millions of extra cash flow into the housing market."So you get this sort of self-feeding frenzy, a real bubble effect."Undercover researchers from The Money Programme posing as first time buyers talked to advisers recommended by ten estate agents in Ealing, West London.Nine encouraged them to take out self certified mortgages – where borrowers simply state their incomes and lenders promise not to check.All nine advised the buyers they would have to lie about their true income to secure a larger mortgage, raising the amount which could be borrowed from around £150,000 to £220,000.In Manchester three out of seven mortgage advisers in Didsbury recommended exaggerating the researchers' incomes.Tony Shaw QC, a criminal lawyer specialising in serious fraud, told The Money Programme that borrowers could be in serious trouble if caught.He said: "A person who fills out a form knowingly entering a false statement about his income or his occupation is at risk of going to prison. It is a serious offence."For mortgage brokers who advise borrowers to lie, the penalties could be even more severe.The Money Programme found that during the investigation brokers advised the undercover researchers to lie on applications for self-certified mortgages from, among others, The Bank of Scotland, The Mortgage Business and Birmingham Midshires.All three are part of the Halifax Bank of Scotland Group – Britain's biggest mortgage lender.The Money Programme visited three Birmingham Midshires high street branches in the West Midlands.In all three the undercover researchers were offered self-certified mortgages far bigger than the official Birmingham Midshires three and one quarter times salary multiple allows.The company has since suspended three mortgage consultants.In the main Birmingham Midshires City Centre branch, HBOS adviser Gurjit Sandhu said he had helped a client who wanted to buy a £400,000 house.Mr Sandhu said: "His income was just about the early £30,000s. It wasn't exceptionally good. He was having a mortgage at £340,000 and to borrow that I showed he had an income of £104,000."Other brokers caught on camera advising the practice were recommended by Rolfe East, Townends, Kinleigh Folkard & Hayward, Bairstow Eves Countrywide, Haart, Barnard Marcus, JAC Strattons, Northfields, Roberston Smith and Kempson. All recommended the self-certification route.Dr Fitzgerald said people not only faced criminal sanctions but also the prospect of financial ruin."If we have a six times multiple or more then you end up effectively paying 50% or 55% of your after-tax income in mortgage repayments and a lot of people would find that very difficult, if not impossible to manage," he said.In the week before broadcast The Money Programme informed all those who had been secretly filmed about the programme and the allegations in it.Many of the estate agents and financial advisers the programme approached have launched enquiries.The Money Programme requested an interview with HBOS Chief Executive James Crosby but he declined to be interviewed.Notes to EditorsSelf-certified mortgages: Self-certified mortgages were first introduced some 15 years ago to cater for self-employed people with erratic or difficult to prove earnings who had problems obtaining a traditional mortgage.At first, borrowers' accountants were asked to verify the incomes people claimed.But in recent years, with increased competition, these income checks have mostly fallen away and now even salaried employees, with incomes that are easily checked, can get a self-certified mortgage.Most self-certified mortgages require borrowers to put down a significant deposit, typically 15% of the price of a property. This protects lenders if borrowers default.The self-certification mortgages offered by most major lenders require an income declaration to which a stipulated multiple is applied.In the case of the HBOS brand BM Solutions, it was 3.25 at the time of researching this programme, the HBOS brand Bank of Scotland applied a 3.5 multiple.There is a small number of self-certification mortgages which do not require any statement of income.The lenders in this case undertake what they call an "affordability test" to see if a borrower is likely to be able to meet the repayments they are taking on.Sales of self-certified mortgages have been growing on average at over 27% a year over the past five years.Source: Datamonitor Study The Ealing Research: Posing as first time buyers, researchers from The Money Programme team visited ten estate agents in Ealing, West London.They asked for mortgage advice and, in every case, were referred to a specialist mortgage adviser.Many of these advisers were connected to the estate agent through an affiliated company. Others worked for separate companies.

Pay off Your Mortgage in 2 years

Accompanies the forthcoming BBC TWO series

A recent survey found that the one thing that would most change our lives for the better is paying off the mortgage. Whilst this might seem an impossible dream to many, a unique programme on BBC TWO will follow eight households over a two-year period as they attempt to do just that.

Guided by business guru René Carayol, the series will record every triumph and tribulation as each household heads towards their goal through a range of money-saving and money-making strategies.

In the accompanying book published against the first series in 2006, business consultant Graham Hooper demystifies the mortgage maze and explains in simple language just how we can all plot our own path to financial freedom.

Not all of us will be able to pay off our mortgage in just two years, but there is an array of tips and strategies that one can choose from to suit their circumstance and mortgage.

Containing case studies from the TV series along with thorough explanations on the different types of mortgages that are available, the reader will gain a greater understanding of just how they might be able to change their current situation to a more attractive solution.

Coupled with suggestions on how to effectively manage your money and tips on investment and starting up your own business, Pay off Your Mortgage in 2 Years will guide you through the most profitable and exciting journey you may ever make.

As René says in his foreword to the book- what have you got to lose?

Banks and building societies are failing to pass on full interest rate rises to UK savers

They are raising mortages higher and faster, finds research carried out for the BBC News website. According to the BBC News website's research into UK banks and building societies, UK savers have missed out on a fifth of the possible gains from the last two recent interest rate rises from the Bank of England.

However, on average, banks and building societies have raised mortgage rates faster and by a higher amount than savings rates.

The research commissioned by the BBC suggests that the UK's leading banks and building societies passed on only a part of two Bank of England (BoE) interest rate increases to savers.

Moneyfacts, an independent financial information firm, on behalf of the BBC News website examined how most UK savings providers and mortgage lenders had reacted to the two most recent BoE interest rate hikes – one in August and the other in November.

The BoE raised rates by 0.25 percentage points each time, taking rates from 4.5% before August to 5% in November.

The research found that savings account providers passed on average 0.42% of the increase to Individual Savings Account holders and between 0.38% and 0.42% to non-ISA savings account holders.

In effect, savers have been short-changed by around a fifth of the rate increase by 0.5 percentage points.

As for mortgage account holders, rates rose more than the BoE's actual rate increase. On average, mortgage rates rose by 0.51 percentage points.

The research also indicated that banks and building societies were far quicker passing on the interest rate burden to mortgage customers than giving the rate rise benefits to savers.

On average it took lenders 20 days in August to raise mortgage rates; in November they moved even quicker with a 14 day delay to increase interest rates.

On the flip side, savers endured a greater time-lag with rates being increased after and average of 30 days in August and 23 days in November.

The average delay between raising mortgage and savings rates was ten days in both August and November.

There were some notable laggards:

Northern Rock, for example, raised its mortgage rates by 0.25 percentage points each time the BoE did. Following the BoE rise in August, Northern Rock took 29 days to respond but in November it moved in just five days.

Northern Rock savers faired less well. The bank raised rates for standard savings accounts by just 0.27 percentage points (0.16 percentage points in August and 0.11 percentage points in November). Both times Northern Rock took 29 days to raise rates for savers.

Northern Rock did, however, raise rates on one of its ISA savers just above BoE base rates.

Commenting on the research, Lisa Taylor of Moneyfacts told the BBC:

"The combination of raising mortgage rates by a greater amount – virtually 0.1 percentage points on average – and more quickly than savings rates, undoubtedly nets the banks and building societies a tidy profit.

"It is clear that many institutions are passing on the full rate rise to customers who hold best buy accounts, in many instances these accounts are operated via lower cost direct channels such as telephone or internet.

"Many branch based accounts which were already paying inferior rates have not seen increases in line with recent base rate rises which means the gap between these accounts and best buy rates is widening.

"Consumers need to check how much their savings account pays, if it is out of line with best buy rates, then perhaps it's time they voted with their feet."

"We all know that running a home can be costly
so great savings are essential and helpful
to a balanced home life".