There may be some light at the end of the tunnel for first time buyers. Have a look at this press release from Equifax:

The launch of a number of 90% and 95% LTV (loan to value) mortgages in the last few weeks will be welcome news for first-time buyers with a small deposit. But leading instant online credit information provider, Equifax, is advising new homebuyers to check their credit file before making new mortgage applications, to ensure that they have the best possible credit status for the deals currently on offer.

“After the recession, 100% mortgages disappeared and buyers needed bigger and bigger deposits, making it very difficult to get on the property ladder,” says Neil Munroe, External Affairs Director, Equifax. “Cautious lending criteria also meant many consumers were unable to capitalise on property prices.

“The new 90% and 95% mortgages we have seen launched in the last few weeks, however, offer hope for first-time buyers. But it’s essential that anyone applying for a new mortgage ensures their credit file is looking good to give themselves the best chance of getting the best deal.

“In particular first time buyers need to ensure they are registered on the electoral roll at their current address – this is a crucial first check carried out by lenders and if they fail that their chances of getting a good deal could be scuppered straight away. They also need to be aware that if they haven’t been particularly credit active in the past this may have an affect on their ability to secure a good mortgage deal.

“Checking their credit file should be the first step, before shopping for a mortgage, as any refusals or too many searches on a credit file could make it even harder to secure a new mortgage. With a little preparation, homebuyers should be able to place themselves in a good position to gain access to new 90% mortgage deals.”

Equifax advises first-time buyers to get a copy of their credit report to see what the lender sees. As well as checking their electoral roll data and that all their current credit agreements are shown as paid up to date, their credit file will highlight any dormant accounts they might have forgotten about. Closing these will improve their credit status, as will paying off any agreements early.

“The two potential hurdles for a first time buyer with their credit file are a lack of any credit activity or missed payments on previous credit agreements”, continued Neil Munroe. “If an individual has never had any credit before this makes it hard for the lender to see that they will be a good risk. So it might be worth taking out a credit facility some months before making an application for a mortgage. If they make payments on time every month this will show potential lenders a responsible attitude to borrowing. For first time buyers who have missed payments in the past, they can add a Note to their credit file to explain the circumstances of past problems.”

Munroe concludes, “First-time buyers are essential to get the property market moving, but lenders still want to see that applicants are a suitable risk before approving an application. We welcome the new 90% and 95% mortgages, offering a vital lifeline for first-time buyers keen to get on the property ladder, but they will still need to ensure their financial house is in order to benefit from these deals.”

The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges.

If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.

There are several reasons that people may look to refinance home loans. Probably the most common is to take advantage of lowered interest rates. Some of the other reasons people refinance home loans is to pay off high priced credit cards, make home improvements, and rebuild credit rating that has taken a turn for the worse.

What is involved when borrowers look to refinance home loans? When you refinance you normally just pay off the old mortgage and sign a new mortgage. Now this will also mean most of the same costs you had when you signed the original mortgage. Depending upon your State or the terms of your mortgage you may pay a penalty for paying the note off early.

Individuals who refinance home loans look at several things before doing so. Look for a company that may be willing to waive the normal fees. These include such things as an application fee, legal fees and appraisal fees. This are all normally associated with closing fees on a new mortgage. This could save thousands of dollars. It would give you a higher monthly payment but this could be still acceptable with a small rate decrease.
How long do you plan on staying in your home? If the answer is just a few months the monthly savings may not have time to catch up to the costs involved if you were not able to secure a loan from a company who will refinance home loans but will not waive fees involved. What are the new rates? As a rule try and find a rate that is minimum 2 points below your current mortgage rate.

Some who refinance home loans do so with the intention of building equity in their home faster. Now with this type of loan your month cost will be higher even with a lower rate. The benefit is you build equity faster and pay less interest over the length of the mortgage. If you wanted to refinance a 30 year mortgage to a 15 but the cost was to high you may want to check about a 20 year mortgage to still be able to take advantage of the lower rates.

The last important point to remember with companies who refinance home loans. Try and get a guarantee on the rate so that it is locked in during closing. This will keep the rate the same even if it should go up prior to your closing. You could even try and see if they will agree to a rate decrease if that should occur before closing. The refinance of home loans is competitive enough that if a company will not do either of those option. You may want to check with another company. The ultimate goal is to reduce your payments or to increase the equity of your home in a shorter time.