CREDIT CRUNCH _ NOW CREDIT CRISIS !!!

At some point over the last couple of weeks, the media seem to have changed the name of the financial news from Credit Crunch to Credit Crisis!

I feel certain that we are all getting a little tired of the constant daily reminders of the problems in the financial sector and although I would not wish to belittle the seriousness of the problems, would like to hear some good news occasionally!

I thought I would let you know how the mortgage market is from a Brokers perspective…

The good news – for residential mortgages to purchase property with a deposit of 25% - mortgages are still freely available at reasonable rates – maybe not as good as the “tracker” rates that were available last year at less than Bank Base Rate, but with the recent reduction in the Base Rate, these should be considered as good rates now!

For remortgages that are less than 75% of the property value, again, there are some sensible deals available – with free valuations, free legal costs and in some cases No arrangement fees. In this area, I currently favour the Lifetime trackers that are competitively priced.

For purchases and remortgages at higher loan to values, up to 90%, there are still plenty of deals available, albeit at slightly higher rates. Lenders are being more cautious (as they should be with property prices decreasing) and client’s that have experienced past credit problems will find this more difficult (although not always impossible).

Now to the bad news - With regards to borrowing more than 90% of the value of a property – this area of the market has been totally decimated – and at the time of writing, there are only a couple of lenders that lend at this level. Even in these cases, borrowing would be restricted to a maximum of 95% of the property value and it is likely the remaining lenders will soon retreat.

With the recent news of the “Banks Bailout”, we are yet to see lenders offering better products and relaxing their criteria, but by the time you read this, it could all have changed again…..