A Review of the Current Mortgage Market Conditions
As we are all aware due to the current financial crisis (which started due to sub chief mortgage lending in America) getting a mortgage or any kind of loan has become increasingly difficult with many lenders restricting their lending criteria considerably or in many situations either going out of business or stopping lending on new situations completely. As a consequence many borrowers are finding it impossible to acquire a new mortgage or already remortgage when their current deal comes to an end, what follows is a fleeting overview of the current position on various kind of mortgage lending.
Normal High Street kind Lending – already though the current crisis stemmed from sub chief mortgages criteria and products have changed emotional lay in this sector in addition, borrowers will find it much harder to get certain kind of products that they were once used to obtaining.
Gone are the days of 100% mortgages the minimum place that is in reality obtainable is at the minimum 10% though many lenders will start at 15% place and if it’s a flat that is the character in question then 25% place is much more realistic, also in the past lenders may have fast tracked an application which method if your credit score was high they may not have asked for proof of income however this lending is now much harder to come by. Borrowers will also confront much tighter restrictions on the income multipliers lenders will use as once five times a salary could be used to acquire high levels of borrowing this has now severely decreased.
Sub chief Lending (Poor Credit Mortgages) – This kind of lending is quite simply nearly non-existent with the lenders (those who are left in the market) restricting their products to match only a few applicants, this of course is very bad news for sub chief clients coming to an end of their current deals as they have very little choice other than to go on the lenders standard variable rate.
Self Certification Mortgages (No Proof of Income Mortgages) – Again this market sector has suffered with criteria being severely restricted both with place required and overall suitability, once there were obtainable to those with poor credit and employed applicants however neither of these kind of applicants will now be accepted on this kind of lending.
But to let Mortgages – however again an overall tightening on lending criteria sub chief borrowers are no longer welcome with the “good old days” of only 10% place long gone these days the minimum place is 25%. In the past the main basis of the lending decision was on the rental income to be received however now the main income of the applicant is also likely to be taken into consideration when considering any application. Lenders in the past were mainly concerned with the amount of lending they had with a particular borrower but now they will be very cautious of any borrower with a large buy to let portfolio as in these days of falling house prices they need to limit their risk exposure.
Self Build Mortgages – Self Build Mortgages have also suffered as a consequence of this current situation whilst they rarely tended to deal with those with poor credit there were a few self cert deals obtainable but now there are just a few remaining, it is also virtually impossible to acquire a mortgage with no redemption penalty which was very useful as when the new build character was finished you could have then remortgaged to amore traditional mortgage.
In short because of today’s turbulent markets you would always be best advised to seek the specialized advice of a whole of market mortgage broker to guide you by the pitfalls of today’s volatile markets.