Homebuyers being shut out by many lenders
March 15, 2009 by admin
Filed under News, News-Mortgages
A large number of homebuyers are having the door shut in their faces by lenders, according to a recent report. In the current financial climate an increasing number of lenders are becoming more and more stringent about who they will lend to, and as a result of this many homebuyers have been left out in the cold because they are not able to get the finance that they need to purchase a property.
There has been a sharp drop in the number of mortgage deals on offer since the onset of the global credit crunch, and this has impacted profoundly on the ability of many potential homebuyers to get the finance that they need.
As a result of the constriction in the mortgage markets, many groups are finding that it is impossible to get an affordable mortgage, and this includes first time buyers, lower income households, and homeowners that are left with little equity in their homes due to the ongoing fall in property prices.
In many cases these groups are finding that they cannot even raise the deposit to get a decent mortgage deal, as many lenders have been demanding larger deposits from borrowers. Whereas in the past the standard deposit was 5 percent of the property value these days lenders are demanding 24 percent or even 40 percent in order to provide access to their most competitive mortgage deals.
This means that whilst the base interest rate has fallen to just 1 percent, which is the lowest level in the three hundred and fifteen year history of the Bank of England, these base rate cuts have not benefited many buyer groups because they are still unable to get their hands on an affordable mortgage deal.
Tags: buyer groups, property, order, report, bank, equity, standard deposit, bank of england