What the papers say – 21st and 22nd January 2012

The Times looked this weekend at the various factors that can have a bearing on borrowing levels, including student loans, the number of dependants a person has, and even whether or not they have had a landline installed. Brokers were keen to point out that affordability calculators offered by most lenders online are just an indication of potential borrowing. Some lenders are much more flexible than others so a decline from one does not necessarily mean the end of the road. Affordability was also the theme in the Sunday Express, where experts looked at ways for households to reduce their outgoings in all areas, including of course the mortgage – the largest expense that most homeowners have. As well as contacting their existing lender, borrowers are urged to shop around, and contact a broker if they need further guidance. With inflation falling, the Sunday Times reported that interest rates are likely to stay lower for longer, so now is a good time to secure a competitive tracker deal. Brokers suggested however that wholesale costs are rising and these are often passed on in the form of higher mortgage rates, so anyone considering fixing should do so sooner rather than later. Elsewhere there was news that the FSA has warned banks that the small print in mortgage contracts enabling them to switch customers from interest-only to a repayment mortgage could be unenforceable and even considered unfair. Experts advised that, as long as a borrower is complying with the terms of the mortgage offer, a lender shouldn’t have cause to change these terms.

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