Leap Years Day, and love is all around.

Following similar recent announcements from Alliance & Leicester and Nationwide, more reductions have been announced in the amount lenders will lend as a maximum percentage of the purchase price. Step forward Cheltenham & Gloucester, who have now reduced maximum loans from 95% to 90% across their product range. The lender said that the move was part of its 'prudent approach to lending,' adding that the ranges which had been withdrawn or had their maximum LTVs reduced only accounted for a tiny part ( just 1.7% of the lender's mortgage book had been 90% + loan to value deals) of its overall business. The lender is now refocusing efforts on its core business. C&G also apologized from giving intermediaries 'less notice than usual' after informing them of the developments on Thursday, for a withdrawal that evening. At least we got an apology this time ! Interestingly, parent company Lloyds TSB will continue to lend up to 95%. C&G said the decision was made in order to focus on improving service levels to its core products. As a broker, I find it is usual that lenders are swamped with business they cannot handle due to staffing issues when they have ultra-competitive deals. This leads to an ever decreasing spiral of service levels, so eventually lenders withdraw from a product range or market entirely (witness above) so that they can rein in the application levels, which allows them to get their service back to an acceptable level, that attracts more business that lets them make a profit (not that any product is unprofitable for them, heaven forbid.) As I said, it's a merry-go-round !

It's been a week of 'doom and gloom', with more redundancies announced, lenders making amendments to product ranges at short - or no - notice, technical problems with provider's web sites, and other issues such as poor service and outright stupid things like the inefficiencies I mentioned on Wednesday. For my point of view, I've been busy trying to arrange mortgages for people with bad credit history, and people who have come back to me after 'disappearing' whilst they searched for the perfect property, and trying to arrange buildings insurance on a property in a ex-mining area. I'm very glad to say that all 'problems' were able to be resolved. That's what I'm here for after all.

Today is the 29th February - Leap Years Day. Love is in the air, supposedly. Maybe I'll get that marriage proposal after all! My other half better hurry up as her parents are coming to stay for the weekend, which may put a dampener on such things ! On that note, I hope you have a good weekend. I intend to !

Today's thought: "Where there is love, there is life". (Mahatma Gandhi)

Inefficiencies at my cost really irritate.

I am amazed at how inefficient companies can be. I moved home (and office) last autumn, and I informed many organisations of my new address. Around the same time, I also changed the network that I affiliate my business through. You'd think that telling a company just once of the change of details would be sufficient, especially as on any product application I give them, it reiterates my current details. Today I received a cheque from Norwich & Peterborough Building Society, not only addressed to my old address, which I'd let over 6 months ago, but also for the wrong amount. The wrong amount was due to them not updating my Network details correctly, which I'd told them about in October. Luckily, I had arranged a mail re-direction service with the Royal Mail for 6 months, but this ended on the 20th February, even though I received this letter over 1 week after my re-direction service was supposed to end. So, it's not only the lender who was inefficient, but also the Royal Mail (even though I have benefited from their inefficiency). The time and cost of other people's inefficiency is something that really riles me, but this is the times we live in. I will continue to 'name and shame' the organisations that I deal with and who don't seem to make changes at the time of request, or are as efficient as I am, which cost me time and money. Why should I be the one to show them the error of their ways, at my time and expense? And don't get me started on 0870 numbers !!

Following on from last week's withdrawal of all 6 providers of 100%+ products, it's been announced today that RBS Intermediary Partners (that’s the Royal Bank of Scotland, Nat West bank, the One Account, and First Active) has lowered its maximum loans to 95% of the property value. They used to lend up to 100% of the property value. Another sign of the increasing 'credit crunch' and it's long-lasting effects. I fear they won't be the last to make such changes.

Time for some mortgage advice....

Borrowers could see a huge hike in monthly mortgage payments when their fixed rate deal ends...

The 1,400,000 mortgage borrowers whose fixed rate deals will come to an end this year could see their monthly payments increase by nearly £400 if they don't plan ahead and arrange to switch to another mortgage scheme.

Most mortgage deals revert to the lender's standard variable rate (SVR) once the fixed or discounted period is over. This time two year's ago, West Bromwich Building Society had the leading two-year fixed rate, at 4.19%. Someone who had that deal and has a £150,000 interest-only mortgage will see their payments go from £524 a month to £917 when the fixed rate expires at the end of March and they move on to West Brom's SVR of 7.34%.

To avoid paying such a rate, It is crucial to remortgage on to another fixed or discounted product. Unless the borrower is tied into a mortgage deal with extended penalties, there is no need to pay any lender's SVR, as it is the most expensive option by far.

But, be warned - even if you remortgage, you will probably be paying more than you have been in the last 2 years. The Bank of England base rate is currently 5.25%, compared to 4.5% this time two years ago. And, as a result of the credit crunch, many mortgage lenders have been looking to widen their margins. As a result, mortgage rates are significantly higher than they were in 2006.

There are some good deals available though and the Council of Mortgage Lenders said this week that the payment shock for those coming off low fixed rates will not be as severe as many had expected.

As the credit crunch has resulted in many lenders increasing their margins, and now being more cautious about who they will lend to, it has also brought some relief to existing borrowers. The Bank of England's decision to cut interest rates in December and earlier this month stemmed from concerns about the impact of the financial crisis on the economy.

As a result many mortgage rates are lower than they were last summer - in fact if you want long-term security you can even secure a 10-year fixed rate deal at a lower rate than the leading two-year deal that was available six months ago.

As always, you should speak to me, an Independent Mortgage Adviser, to discuss the current possibilities. Call on 08458 386938 during office hours and I'll be happy to start the process for you.

As ever, all the best,

Des

Another day, same ####

Most of today has been spent on AXA's online system, trying to input a life assurance application. Having input all the details required up to page 3, out of an application that runs to 20 pages, I then found an 'error on page' icon. I called Axa's online technical helpline, to be told that I am the third person today to have this fault, so they will now investigate it and call me back. 2 Hours later, without a call from them, I tried to do the application again, and it went through faultlessly, but I am still awaiting their telephone call to say matters have been rectified. Fat chance that call will ever be received.

I heard that Northern Rock are actually calling existing mortgage customers to say that they'd be better of going to another mortgage lender once their existing fixed rate wds with Northern Rock. Amazing to see such honesty from a lender, especially as they need the money! However, most financially-savvy borrowers would know that NR's current mortgage rates are hugely uncomepetitive, and would move away anyway.

A spokesman for NR said: "It is something we have confirmed for some time. Since September we said we were taking prudent steps to reign back our lending."We're writing to customers coming to the end of their deals and think it's fair to say there are probably better ones out there, and to contact a independent mortgage broker about them." The spokesman added that customers approaching the end of their current deals are welcome to remain with the bank on its SVR, which is currently 7.59%. As mentioned a few days ago, the current lowest Standard Variable Rate is the Stafford Railway Building Society's, now just 5.99%. Full marks to Northern Rock for such honesty.

Things are not all happy at Alliance & Leicester either, with the news that they are encouraging members of their staff to apply for voluntary redundancy, and are looking to show up to 300 people the exit door.

Also keeping me busy at present is an appeal to a lender who's Valuer has downloaded a property I am currently arranging a re-mortgage on. It's been downvalued around 20%, from £170,000 to £135,000. Rather stupidly, the local valuer has only done his 'due dligence' on the actual property postcode, which has had only 4 sales in the last 4 years. and not the whole road, which has quite a few postcodes within it's length, and many more sales to prove market values. We now have to show the proposed lender the error of their valuer's ways. This is more unpaid-for work, which is not only frustrating but should also be also unneccesary had a 'professional' person should do their job properly in the first place.

Let's see what tomorrow brings !