Mortgages

New mortgages down 4.8% in January-September

2007-01-16T21:34:00.000-08:00

New mortgages down 4.8% in January-September

The number of new mortgages fell by 4.8% in January-September 2006, compared with the corresponding period of 2005 says Leumi Mortgage Bank Ltd. The amount of credit granted by mortgage banks fell to NIS 16 billion from NIS 16.8 billion in the corresponding period; these figures do not include credit granted by contractors.

Credit for people eligible for government mortgages fell a further NIS 1.6 billion in January-September, including NIS 200 million in standing loans and conditional loans, 12% less than last year, and comes after a 25.6% drop in 2005. The number of borrowers eligible for these loans fell by 10%, mostly because of a change in the method of credit points.

Leumi Mortgage Bank did not state the aggregate amount of refinanced mortgages. However, banks financial reports for the second quarter indicate a 74% drop to NIS 1.3 billion in the first half of the year from NIS 5 billion in the first half of last year.

Negative-equity mortgages rise slightly

2006-12-19T22:45:00.000-08:00

Negative-equity mortgages rise slightly

Residential mortgage loans in negative equity grew by 36 cases in the third quarter to 8,813, with an aggregate value of $15 billion, the Monetary Authority says.

Compared with the peak of about 106,000 cases at the end of June 2003, the number has fallen 92%. There were 8,777 cases in the second quarter and 9,913 in the first.

The estimated unsecured portion of these loans was little changed at $2 billion. Correspondingly, the loan-to-value ratio of negative equity residential mortgage loans remained unchanged at 113%.

The three-month delinquency ratio of the negative equity residential mortgage loans rose to 1.21% from 1.13% at the end of June.

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Interest-only mortgages up 33%

2006-12-11T00:56:00.000-08:00

Interest-only mortgages up 33%

October saw massive rises in the number interest-only mortgages, up a third from September's figure of 25 per cent to 34 per cent last month. The findings are indicative of Britain's borrowers getting increasingly cash-strapped say Mortgages Direct, who conducted the research. At the same time last year, the number of homebuyers choosing interest-only mortgages was just over 25 per cent. "Borrowers are showing signs of heightened sensitivity to any changes in the interest rates," said Peter Gladdy, director of Mortgages Direct. "The trend for borrowers opting for interest only mortgages is worrying and not advisable unless a comprehensive repayment method is in place. Our survey also reveals that homeowners are continuing to opt to secure a fixed rate mortgage for a longer period of five years or more.

Parents squeezed off the property ladder

2006-11-21T01:26:00.000-08:00

Parents squeezed off the property ladder

New research indicates that nearly a quarter of the UK's parents still rent or live with their children's grandparents, while approaching half cannot afford to get a foothold on the property ladder.The survey for Alliance & Leicester by the Centre for Future Studies found that 23 per cent of the UK's parents are renting or living with their children's grandparents.Close to 42 per cent of parents who do not own their own home would like to be able to buy one, but are unable to afford it, while 55 per cent are not even considering the property market.Stephen Leonard of Alliance and Leicester mortgages said: â€œWe are currently seeing a shift in our society which will affect the housing market over the next twenty years or so.â€œThe decrease in the number of nuclear families as a result of divorce could mean an increase in the number of rented households with children as our research indicates," added Mr Leonard.The study also indicated that rising numbers of divorced parents could contribute significantly to a forecast uplift in the private rental market, which is set to increase by 39 per cent by 2014.

'Cash-out' refinancing is highest since 1990

2006-11-09T01:24:00.000-08:00

'Cash-out' refinancing is highest since 1990

SAN JOSE, CALIF. - Spurred by higher interest rates on their adjustable mortgages and home equity loans, many homeowners are refinancing their mortgages and taking out bigger loans in the process.

In the third quarter of 2006, more homeowners obtained so-called "cash-out" refinancing than during any quarter since 1990, mortgage financing company Freddie Mac said last week.

Eighty-nine percent of loans owned by Freddie Mac that were refinanced last quarter nationwide were cash-out transactions that is, they resulted in new loans that were at least 5 percent larger than the unpaid balance on the original loans, the company said.

Often, homeowners who increase their loan balances do so to borrow extra money from the equity they have in their homes pulling cash out for remodeling projects or education expenses.