New figures from the British Bankers’ Association show that mortgage borrowing in the UK is growing again, but remains at a far lower level than the same time last year.The spring upturn in the home finance market saw 191,857 mortgages approved in April, a two per cent increase in borrowing on March but 17 per cent lower than the same month last year.

The BBA also revealed that the average amount borrowed was £122,700.The number of loans for property purchases increased to a nine-month high, but was still down on last year’s figure.”Whilst growth in net mortgage lending continued to be relatively weak in April, there are signs that the falling trend may be stabilizing,” said Daivd Dooks, BBA director of statistics. “Approvals, particularly for house purchase, are responding to the usual spring stimulus and, although not near the levels of last year, they indicate sufficient activity to support mortgage lending in the near-term,” he added.

Almost half (48 per cent) of all homeowners have switched lenders at some point, according to latest figures from the Council of Mortgage Lenders (CML).Additionally, 52 per cent of these people have remortgaged in the past five years. As for the rest, two thirds (65 per cent) of those who are yet to remortgage say they would consider making the switch this year.”More and more people are now re-mortgaging to help them change their lifestyle or career and to own their own home quicker, not just to reduce their monthly repayments,” explained Abbey’s director of mortgages, Gary Hockey-Morley.Lifestyle changes have meant that four per cent of remortgagers have done so for reasons such as starting a new business, giving up work or starting a family.

However, as Mr Hockey-Morley pointed out, some people are against making the move for financial reasons.”Some people still feel that it’s too expensive to remortgage although actually it needn’t cost a penny.”I would urge anyone considering changing their mortgage to talk to lenders, like Abbey, who have deals that offer free legal and valuation fees as well as good rates,” he added.

Further signs of economic slowdown in the UK appear to have put pay to the possibility of an interest rate rise. Business confidence has fallen to its lowest level since October 2003 and the economy looks set to slow even further. The latest BDO Business Trends Report reveals that with weakening global demand the Chancellor could miss his economic growth targets of 3-3.5 per cent and face increased difficulty in limiting borrowing. “The economic news following May’s election has been unpromising,” commented a partner at BDO Stoy Hayward, Peter Hemington.

“Retail is edging down and the world economy is softening. The latest ‘poll of polls’ points to a weakening in the UK economy and it is likely that the Chancellor will miss his growth targets,” he added. In light of weakened figures, higher than expected unemployment and a lower average earnings growth BDO Stoy Hayward predicts interest rates will remain on hold when the MPC meet on 9th June.

The chief executive of the centre for economics and business research Douglas McWilliams added: “Government expenditure has picked up in recent months but we expect this to only be a temporary rise. “The economy has been shored up by business spending but this is expected to slow during the second half of the year.”

My friends have suffered delays in the sanctioning and disbursement of their home loans. I am yet to finalize my property. Is it a good idea that I go for a pre-approved loan?It helps to go in for a pre-approved loan, as the delay in sanctioning of the home loan is done away with. Some of the down sides of pre-approved loans are listed below: * The loan is not always a true reflection of your eligibility as it is primarily based on surrogate income calculations

* The loan is not mapped to a property so there could be a case that the loan is not available for a particular area or property or builder.

* A better approach would be to have a eligibility calculation done to understand the amount to which you can get a loan. This will also aid in your search for your dream home as you have a clear understanding of your financial situation. What is the current interest rate in the market for smart home loan products for loan amounts over Rs 20 lakh? Smart home loan products are usually priced at a premium to regular home loans. The price is usually 50 to 200 basis points above regular home loans, depending on the loan provider.

As current home loans range between 10 – 12 %, smart home loan products range between 10.5 – 14%.I have taken loan from LICHFL for Rs 6.65 lakh and from my employer for Rs 3 lakh, two years back. Now that I want to repay balance amount of loan (approximately Rs 2.5 lakh) to employers, please let me know some of the good options with lower interest rates and 15-20 years repayment period for either Rs 2.5 lakh or complete Rs 2.5 lakh + Rs 6.5 lakh.

It is sometimes very difficult to refinance your home loan if your credit is not in good stance. However, it is still feasible to obtain a home loans with a damaged credit history and following are some ideas on low credit score refinancing according to the purpose of the home loan refinancing transaction. Whenever you want to refinance a home loan, you need to analyse what you want to obtain by refinancing that loan. What you aim to do needs to guide your refinance decisions and the expected terms of your refinance home loan too. This is a significant issue since lenders tend to convince unprepared people of getting loan terms that may not be so advantageous for them but if you have in mind what you want to achieve by refinancing your mortgage loan, you will be able to distinguish a good advice from a bad one.

Basically, by refinancing your mortgage home loan you may want to reduce the monthly payments to ease your finances, you may want to reduce the term of the loan repayment schedule to become debt free sooner or you may want to obtain extra cash for debt consolidation or other purposes thanks to the cash-out refinance home loans. In any case, what you need to do is make sure that the terms of the mortgage refinance loans that you are being offered match your needs and will produce the effects that you desire. 

RISING interest rates failed to dampen housing demand in December, with home loan approvals unexpectedly rising, according to data just released by the Australian Bureau of Statistics. The number of home loans granted in the month edged up 0.1 per cent, against a 3.3 per cent rise in November. Economists had predicted a 1 per cent fall in December. The ABS data showed 65, 645 loans were granted for owner-occupied housing in December, up from 64,928 the previous month. While the total number of home loans rose in December, the total value of the loans taken out fell 0.6 per cent, to $22.1 billion. The value of outstanding home loans rose 1.3 per cent, or $9.3 billion to $701.1 billion. First time buyers weren’t scared off by rising rates, with the number of loans to first time borrowers up 18.4 per cent in December.

Despite the uncertain rate environment, most Australians are still opting for variable home loan rates. Fixed rate loans accounted for 23.5 per cent of loans taken out in December, down from 24 per cent in November. Borrowers showed a preference for traditional lenders in December, with the number of loans financed by banks rising 0.8 per cent for the month, and non-bank loans falling 3 per cent. The country’s average loan size is $238,800. Homeowners in the Australian Capital Territory have the largest average home loans at $266,600, followed by New South Wales where the average home loan is $264,100, then Queensland at $239,600, Victoria at $232,800 and Western Australia at $232,400. Tasmanians have the lowest average home loans at $165,300

The weak housing market didn’t hurt earnings last year at a local bank aimed at providing capital for home loans. The home loans‘ 2007 earnings rose 6 percent to $269 million. But fourth-quarter profits dipped 4 percent to $66 million. The bank, owned by 725 member institution shareholders in Ohio, Kentucky and Tennessee, makes capital available to banks so they can then lend money for housing and economic development.

Disruptions in the credit and mortgage markets fuelled growth in the bank’s key business lines - credit services and mortgage purchasing - as member banks sought increased liquidity. Balances in those areas rose 21 percent to $68.8 billion. And the principal balance on its advances jumped 26 percent to $53 billion. The FHL Bank’s assets climbed 8 percent to $87.5 billion. Its return on equity for the year rose 0.17 percentage points to 6.87 percent.

Labour has again failed leaky home owners, with revelations that its loan scheme has cost $650,000 to administer and has resulted in only seven loans, says National’s Associate Building and Construction spokesman, Bob Clarkson.” It is a disgraceful waste of taxpayers’ money that $650,000 has been spent on administering a scheme that has helped only seven leaky home owners and without a dollar being spent on fixing the houses.” The financial assistance scheme was announced in the 2006 Budget, promising $7.1 million in loans over two years. The Minister at the time, Clayton Cosgrove, responded to concerns from industry that the scheme was a ‘sham’ by saying the loan scheme would open the way for thousands to have their homes repaired. The Department of Building and Housing has confirmed that $650,000 has been spent on developing, implementing, and administering the loan scheme but that only seven loans, to a value of $1.44 million, have been handed down.” This loan scheme was a cruel hoax that falsely raised the hopes of desperate leaky home owners.” This botch-up stands alongside the appalling failures of the Weather tight Homes Tribunal. Far from resolving all claims in two years, as promised by Labour in 2002, only 15% of the 5,500 claims have been resolved after six years.” The madness of Labour’s bureaucratic approach to leaky homes is that it’s costing an average of $116,000 to administer each claim resolution and $93,000 to administer each loan granted, despite the average repair costing $120,000.

There are many ways to choose a home loan. What’s right for you will depend on your particular set of circumstances. Among today’s many options are Federal Housing Administration (FHA) loans. FHA loans are made through a private lender but guaranteed by the FHA. FHA’s guarantee results in loans that may be easier to qualify for, have a lower cost, require a smaller down payment and be more flexible if you should fall on hard times. FHA loans may be viable options for first-time homebuyers, borrowers who can’t make a big down payment, those looking for low monthly payments and those who are worried about qualifying for a loan. Favourable refinancing terms also make them popular among those who already have a mortgage, but want to refinance at a lower rate. Most FHA loans are fixed-rate mortgages in which the interest rate stays the same during the life of the loan. FHA also guarantees adjustable rate mortgages, or ARMs, which start out with low initial interest rate and monthly payments that may change over time. A new program worth knowing about is FHASecure. This refinance program is for borrowers in a variety of situations who would benefit from refinancing, but may struggle to qualify. One such scenario is when the borrower owes more than the value of their home. FHASecure will provide a new loan at 95 percent of the property’s current value and will allow subordinate financing in excess of 100 percent of the property’s value. Typically, this will allow a borrower to replace a variable interest rate with a favourable fixed rate for most of the amount owed. FHASecure also allows borrowers with late mortgage payments to qualify if the late payments were caused by the strain of an ARM adjustment.

The news on home foreclosures continues to be dim, with a recent report from RealtyTrac Inc. stating that foreclosures rose about 75 percent between 2006 and 2007.In response, the Bush administration and participating financial institutions this week announced plans that would help some people keep their homes. The initiative builds on one announced by the president last fall. Many Democrats say Bush’s plans don’t go far enough. They want the federal government to step in with more relief for homeowners. Many conservatives say the plans go too far. It’s a free market, they say, and people shouldn’t be protected from their own bad judgments.

The move announced this week allows homeowners who are behind 90 days or more in their mortgage payments to delay proceedings for 30 days — to allow for restructuring of their loans. The lenders have agreed to try to restructure loans. It’s a good move, but it will help only a limited number of homeowners. The problem with the housing credit crisis is that there is no way to make the pain go away for individuals without creating bigger federal deficits and more expensive credit, both of which would damage the economy as a whole.