Best Mortgage Rates: Are You Doing the Right Things to Get Them?

The mortgage market has significantly changed in the last couple of years. The number of mortgage products available is much smaller than it used to be, 90% LTV mortgages have almost disappeared, and lenders in general are becoming a lot more careful. No longer do they allow mortgages equal to 6 times your yearly income, and for customers with poor credits rating, getting a mortgage has become extremely difficult. Despite the credit crunch, there are still some great mortgage deals available on the market. We give you 7 tips to help you get the best mortgage rates:

1. Make sure you’ve got a large deposit: while 90% LTV mortgages might still be available from some lenders, the best mortgage rates are usually available on less than 75% LTV products. Make sure you save as much as you can for your upfront deposit.

2. Large deposits go a long way for remortgages as well: because of the drop in property prices, you may well find that the LTV for your property is higher than when you applied for your first mortgage. An option could be to use the money in your saving accounts towards a deposit in order to get a better remortgage deal.

3. Check your credit record: the buyers most affected by the credit crunch are people with bad credit, also known as “sub prime”. If you’ve got bad credit, the rates available to you will be significantly higher as the lenders want to protect themselves against the risk of lending money to somebody with a poor credit record. Make sure you check your credit record and take corrective steps to bring back things on the right track.

4. Speak to a professional mortgage adviser: If you have got a special situation, for example if you’re self-employed, it is really important that you speak to a mortgage adviser. A good mortgage adviser will work with you to understand your personal situation and find out the best products available for your circumstances.

5. Go for fixed rate products if you want security: fixed rate mortgages guarantee that your mortgage repayments will stay the same and will not fluctuate with changes in the Bank of England interest rate. This security comes at a price though, as fixed rate mortgage deals are generally less competitive than variable rate products.

6. Choose a tracker mortgage for the best rates: tracker mortgages rates fluctuate with the bank of England base rate. The rates offered for tracker mortgages are in general lower than fixed rate mortgages. There always the risk though that the base rate could go up and result in higher mortgage payments if you choose a tracker mortgage.

7. Be careful with the arrangement fees: the best mortgage deals sometimes come with high arrangement fees. It is important that you calculate the cost of the mortgage over the entire term, taking the arrangement fees into account, to find out what is the best mortgage deal for your situation.

Lucrative Commercial Property for Sale, Say Foreign Investors

According to some research sources, commercial property prices are continuing to rise, while others insist the market is slowing. Either way, now could be an ideal time to consider if your current business premises is going to be sufficient for your needs over the next two or three years. The economy has meant some businesses might have been unable or unwilling to commit to moving to a larger or more appropriate building.

After all, it’s better to keep a job in an outdated building than to have no job at all. However, there are signs of national economic recovery and many companies are wondering if now is a good time to buy a new workplace, or even consider becoming a landlord. Foreign investors into British commercial property for sale have had this idea for some time now, taking advantage of low prices and helping bump values and stir up investment, especially in the City of London.

Some companies might also be motivated to buy their own property because of the resultant rising rents, and not just in the capital but outside London and beyond the M25. As the economy recovers there will be plenty of opportunity for people with their pulse on the property market to make the most of the upturn. A snapshot of values across the country shows a predictable variation of the price of commercial property for sale.

Some canny company business owners also trawl residential building specifications for suitable premises for their operations – though change of use permission can make the buying process slightly more lengthy and complicated.

Official house price figures for July fell, according to the Royal Institution of Chartered Surveyors (RICS), whose surveyors recorded a glut of properties being put up for sale, which could account for the overall price drop. “The fall in the RICS house price measure is broadly consistent with most other recent data that has been released,” said Ian Perry, RICS spokesman “Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties.”

This means, presently, it could be a buyer’s market and whether you are looking for commercial or residential properties, it’s wise to keep a close eye on what’s occurring. More good news for business owners and their properties is that the government is considering changes to Discretionary Business Rate Discounts to make them fairer.

Real Estate Development Explained Easily

Many people familiar with the real estate market and industry are very familiar with the term “real estate developer,” and perhaps can even name a few famous ones, from Donald Trump to Alfred Taubman.  It would seem that the term itself is very self-explanatory, as real estate developer simply develops or improves real estate. 

In reality, the entire concept of realtor development is of course much more complicated than that.  Unlike someone that purchase a home to fix it up and resell it, a large-scale or high-end real estate developer often deals in millions or even billions of dollars in investment.

It’s true that a developer may be an individual, but more likely will be a partnership or Limited Liability Company, or even a corporation.

There are two major categories of real estate development activity:  land development and building development (also known as project development).

Land developers usually purchase land that is unimproved, meaning that it has yet to have utility connections, roads, any type of grading, and so on.  Unimproved means just that, in every case.

Developers then step in and define the “covenants,” which are the context of any future builds and improvements on the land.  They also gain “entitlements,” which are legal permissions or permits in order to go ahead with their development plans.  Once these covenants and entitlements are in place, the land development can then begin, with earth grading and other land leveling, utility connections, and zoning.  Roads are also planned, built, and paved, whether for large cities or just neighborhoods.

Once the land is properly developed, building developers may then step in.

These building developers then have buildings, whether offices, retail, or private homes, planned and built on the land. 

Building developers and land developers obviously need to work very closely, as the building developers plans will need to be accommodated by the land developers.  For example, the utilities brought in for office buildings are obviously different than those for private homes, as are roads, and everything else.

 Some building developers also purchase existing buildings or properties for the purpose of upgrading, remodeling, razing and rebuilding, or otherwise improving whether for sale, or to keep as assets to produce cash flow via rents and other means.

Why develop real estate?

When you really think about it, you realize the great amount of work and obvious risk that is involved in real estate development.  Additionally, homes or estates cost a lot of money to purchase and develop (sometimes called “hard costs”), and can sometimes be difficult to sell.  Because of these high expenses and difficult sales, and because the return on investment often takes some time, this explains the risk in ownership and development. 

So then why choose this as an occupation?  One thing to remember is that most real estate development projects are financed with debt leverage, that is, with borrowed funds the proceeds of which are assumed to earn a greater rate of return than the cost of interest.

By using debt leverage rather than personal investment, this cuts the risk tremendously.

How do you actually get wealthy?

And of course for most, the real question is how one actually gets wealthy from home developments if the work is so hard and the risk is so high.

The answer is of course complicated, and certainly there is nothing guaranteed.  Many developers have lost as much as they have gained, and the market fluctuates greatly.  However, it seems that those who are smart about their investments and developments are the ones that are successful.  After all, the entire point of real estate development is much like stock trading – you want to sell the product for more than you paid for it.

Having a true understanding of what makes real estate valuable is key.  Make a good decision as to location, upgrades, and the like, and you’re sure to make money.  Make bad decisions, and you’ll lose money.

To actually get wealthly then, it pays to do your homework as they say.  Purchasing land or buildings on the low end is good, but just because something is affordable doesn’t mean it’s going to turn a profit once it’s developed.  There may be a reason why certain areas are undeveloped or certain buildings are up for sale.

Quite often, when people begin to invest in commercial real estate, they begin small.  They may acquire a single family dwelling, a duplex or maybe even a small apartment building.  In order to keep continue the commercial investment game; you have to keep moving property.  In fact, if you do not grow, you will eventually find that your bank can no longer help you because you have maxed out your investment portfolio.  Taking too long to develop can be a death sentence in the game.

Additionally, staying on top of trends in the real estate market is also crucial.  Population shifts can greatly affect the outcome of a development project.  When the populace is moving out, it makes no sense to develop new property or refurbish old ones – who will buy the property is everyone is moving away?  And, who will buy your developed land if all builders are unable to sell their current properties and are looking at other areas?  Sun Tzu, author of “The Art of War,” said, “By taking into account the unfavorable factors, he [the soldier] may avoid possible disasters.”  This point can obviously apply to real estate development and eventual sales.  Being wise about potential problems with any one area or development deal can help avert monetary disaster.

To actually get wealthy from real estate development, it takes some skill and effort to stay ahead of the game, and the ability to organize all the steps needed, as well as to delay profits.  However, with a bit of work and study, it can pay off.  Development has long proven to be one of the most profitable areas of business that’s around – if you have the patience to play the game right.