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Mortgages -
Homebuyers Hit As Lenders Withdraw More Mortgage Deals - 24/03/2008
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No fewer than 461 fixed and variable-rate mortgages were last week withdrawn by lenders, shrinking the number of mortgage products from 15,000, last summer, to only 5,000 this week.
A study by financial analyst firm, Moneyfacts on behalf of the Independent on Sunday said at least a tenth of all mortgage deals disappeared in wake of the financial market problem fuelled by the crisis that rocked US bank, Bear Stearns.
Intending homebuyers trying to secure mortgage at this time, the survey said, will face the toughest challenge in many years.
To be able to secure mortgage would-be buyers must deposit 25 per cent after years of lax lending at 125 per cent of the property’s value, the study said, adding that there’s a greater chance that first-time buyers, those looking to move to a larger property or anyone wanting to re-mortgage would be rejected.
It also emerged that last week, according to reports, small building societies turned away potential borrowers following panic in the financial market, in which there was an attempt to manipulate shares in HBOS, the biggest mortgage lender in the UK.
To curtail the fraudulent attempt to destabilise the financial market, the Bank of England intervened with an unprecedented statement saying no bank, not even HBOS, was in financial crisis. In the same vein the Financial Services Authority launched its own investigation into the fraud attempt.
Reacting to the withdrawal of mortgage deals in the UK, Savills Private Finance’s Melanie Bien said it’s unprecedented.
The crunch, she added, has moved on to the mainstream, affecting people with small deposits like first-time buyers and families looking to move to a bigger property.
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