Mortgages -
Millionaire Mortgages Hit By Credit Crunch - 29/02/2008
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The US credit crunch hit the UK hard at the lower end of the mortgage market. First time buyers and those with poor credit rates, suddenly found themselves struggling to find a mortgage and get onto the property market. But now the top end of the mortgage market is also being hit, as many of Britain’s banks and building societies withdraw their funding offers for those applying for million pound mortgages.
Previously high earners would be able to find a mortgage that was worth more than three times their salary due to the big bonuses they earn. Now lenders are becoming increasingly reluctant to large sums of money based on bonus payments and it has become extremely difficult to find a mortgage for more that 96% of the value of the home. High earners are now finding themselves priced out of markets that were once open to them as they do not have a high enough base salary.
A representative for the broker firm Cobalt Capital said that more questions are being asked of high-net-worth individuals at the underwriting stage of the mortgage application. This shows that lenders are being more prudent across the whole market not just the lower end.
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