Feb

27

Mortgage Lending Still Growing Despite Interest Rate Rises

February 27, 2008 | Leave a Comment

It appears that rising interest rates have had little impact on the UK housing market as the Association of British Bankers have revealed that mortgage lending in July 2007 increased by £13.6 billion. The figure is almost exactly in line with the preceding six-month average of £13.7 billion and represents a slight increase on the June rise of £13.1 billion.

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Feb

10

Adjustable Rate Mortgages - The Make Up Of An Arm

February 10, 2008 | Leave a Comment

An adjustable rate mortgage, more commonly referred to as an ARM loan, is simply a mortgage loan that has an interest rate that is usually fixed for a short period of time and then after that specified period of time is up the interest rate will adjust normally every 6 or every 12 months. How much the interest rate can adjust is determined by your ARM loan CAPS. Most adjustable rate mortgage loans have 2 different types of CAPS. The first CAP is a lifetime CAP. A common lifetime CAP is that your interest rate can not go any higher than 6% of your start rate. This means that if you obtain an ARM loan with an initial rate of 5% that your rate over the life of your loan can never exceed 11% (5% start rate + 6% CAP). The next time of CAP is an adjustment CAP. An adjustment CAP dictates the most that a rate can increase each adjustment period. For example, a common adjustment CAP is 2%. This means that each time your rate adjusts that you rate can not increase by anymore than 2%. So if you had a 5% initial interest rate, then your first adjustment could not increase your rate any higher than 2% for a 7% maximum. Therefore, you can see why it is extremely important to pay attention to the rate CAPS so that you know how much your rate and payment could end up at after the initial short term fixed period of your ARM loan.

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Jan

28

To 5.75% And Beyond - Managing A Year Of Interest-rate Uncertainty

January 28, 2008 | Leave a Comment

The Bank of England has already made four quarter-point interest-rate rises since August 2006, leaving many homeowners hoping that fears of further rises this year would prove unfounded. After all, last month the nine-member Monetary Policy Committee (MPC) voted by a small majority to freeze interest rates at 5.5%. This week, however, the more monetarily aggressive members of the Committee pushed the vote the other way, with interest rates now rising to an eye-watering 5.75%. Even worse, many business analysts are predicting a further rise to 6% before the end of 2007.

This is a preview of To 5.75% And Beyond - Managing A Year Of Interest-rate Uncertainty. Read the full post (675 words, estimated 2:42 mins reading time)

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