Mortgage drought could affect many people

Industry experts have said that under current plans that have been proposed by the UK’s financial regulator, the Financial Services Authority, many people could be facing a mortgage drought that could leave them unable to get the mortgage finance that they need in order to get onto the property ladder.

The mortgage market is already very restricted, as it has been since the onset of the global financial crisis several years ago which almost brought the banking and financial systems to their knees. However, experts from the Council of Mortgage Lenders have said that things could get even worse under new rules from the FSA.

The Council of Mortgage Lenders has said that if these regulations had been in place over the past four years over 50 percent of mortgages that were granted over this period would have been refused, causing huge problems for those that were looking to buy a property and get onto the property ladder.

The CML claims that this would have equated to around four millions additional mortgage loan rejections if the FSA had its regulations in place in 2005. The group said that this shows just what a negative impact the rules could have in the current financial climate. A review by the CML suggests that under the new proposed regime millions more people a year could be turned down for a mortgage loan.

Figures show that the number of mortgage approvals in the UK have already plunged, with numbers having fallen to around 50,000 per month compared to 135,000 a months before the credit crisis hit. This has been made worse due to the strict restrictions that banks have put in place when it comes to lending, as well as the higher deposit levels being demanded.

Tags: Financial Services Authority, council of mortgage lenders, property ladder, mortgage, UK's financial regulator, Mortgage loan, market, financial

Banks need to reduce their mortgage arrangement fees

At a time when borrowing has become increasingly expensive, and when household finances have become tighter and tighter due to the global credit crunch, higher bills, increasing living costs, and higher petrol prices, the UK’s mortgage lenders have decided to deal borrowers another blow by hiking up mortgage arrangement fees, making it even more difficult for the average struggling consumers to take out a mortgage or remortgage. In fact, in the current climate some poor consumers could find themselves facing fees of thousands of pounds to remortgage or take out a mortgage, making the whole process impossible for some who simply cannot cope with that sort of fee. Read more

Tags: Mortgages, current climate, extortionate, fsa, council of mortgage lenders, issue, matter, UK's financial regulator