Whilst many of us may think that the worst is over when it comes to difficulties in getting mortgages, recent reports have suggested that many lenders are continuing to tighten up on their lending criteria, making it increasingly difficult to get finance for a home, and increasing the risks for homeowners that are on cheap fixed rate mortgage deals that are due to come to an end.
The global credit crunch that has swept across the UK has resulted in turmoil in the financial markets, and this has made it difficult for people to get finance. In a recent report industry experts have warned that many lenders have now tightened up further on their lending criteria, with an increasing number of lenders struggling to secure the finance that they need in order to fund their lending.
Those looking for a mortgage are likely to face real difficulties unless they have very good credit and are able to put down a substantial deposit according to industry officials. Within the last few days a number of lenders have further tightened their lending criteria, and this means that things are set to get more and more difficult for those that are looking for a mortgage.
Brokers have stated that anyone looking to take out a new mortgage needs to act quickly in order to avoid missing out on competitive deals, as many lenders are taking their most competitive mortgage deals off the shelves very quickly, restricting access to them. Many other lenders have reserved their most competitive deals for those able to put down a larger deposit – in some cases forty percent or more.
Some smaller building societies have had to put a stop to new lending for the time being, as they continue to try and work through problems with securing finance on the wholesale money markets. Many others have raised the amount of deposit that they require, with most requiring way more than the traditional five percent.
First time buyers are likely to suffer as a result of this situation, as many cannot afford to put down a large deposit and this could mean that they are unable to get a mortgage or will have to pay a far higher rate of interest by way of penalty. Those currently on cheap fixed rate deals are also likely to suffer if their fixed rate is due to come to an end soon, as many may find it difficult for find another suitable, affordable mortgage.
