Need to borrow? Want to save?
Get fair, unbiased advice in a language you understand
so you make the right choice.
Mortgage Squeeze Takes Hold
(06-03-08) - With the end of so called ‘125% Mortgages’, and introduction of strict deposit criteria, first time buyers face their toughest challenge yet when trying to get a foot on the property ladder.
Despite the depressed housing market appearing ostensibly rosey for first time buyers, the affects of the credit crunch are hitting mortgage applicants hard. Lenders are generally favouring existing homeowners in terms of attractive lending rates, and first time buyers are finding themselves snubbed as a result.
Key products such as the 125% Mortgage, once a staple of Northern Rock’s(www.northernrock.co.uk) portfolio, have been withdrawn by six key lenders in the wake of the bank’s problems. 125% mortgages involved the issue of a mortgage for 90% or 95% of the value of a property, plus an unsecured loan for the balance of the borrowing.
Katie Tucker of mortgage brokers John Charcol foresees a move back to the days where mortgage deposits were saved for:
‘This year, the UK will see a return to the culture of saving for a deposit. More young people will stay at home for longer, and those paying rent will have a difficult time saving as well.’
Chris Eagle, Commercial Manager at CreditChoices, empathises with first time buyers:
‘Add the possibility of carrying a significant amount of student debt to the equation and it makes for a very murky pool for first time buyers. Make sure that your finances are in as healthy a shape as they can be before embarking on the property journey, and use our debt centre, credit card guides and loans guides to help you.’
