Hi
Sorry for the long absence but as the mortgage market has been so bad I have been busy? not!!
That said like some of my peers I have spent the last few months trying to diversify into other markets with some differing success.
So what has happened to the mortgage market over the last 5 or 6 months? Well it is still a very tight market, contrary to the media lenders do not want to lend they would rather keep the money UK taxpayers have given them and sit on it making their balance sheets look strangely strong.
Some of the major players have declared massive losses this almost justifies their willingness not to lend to you and I.
But on another note they are trying to lend their best deals through their high street operations much to the dissatisfaction of my fellow mortgage advisers. The upshot of which is more mortgage advisers are going out of business on a daily basis now than at any time in the past.
So without being over dramatic speak to a mortgage advisor now before they become extinct.
Anyway still quite busy so that is it for now but I will try and post more regularly now so keep checking back and let me have your feedback and questions.
Hi and welcome to my blog. Here you will find helpful information about the mortgage market, updated regularly so keep coming back and dont forget to bookmark us.
Tuesday, 25 August 2009
Sunday, 15 March 2009
Why are we in a mess after all this money has gone to the banks?
The situation with the banking and lending institutions may throw some people into confusion, which I find is totally understandable. The banking system has had many billions poured into it, yet it doesn?t appear they want to lend any of it to enable people to purchase or develop property. It even appears that lending to people for high street spending has in many cases come to an abrupt end.
Furthermore, we are seeing unprecedented reductions in the interest rate those of which we have never seen before, all in the attempt to persuade lenders to lend and borrowers to borrow. Nevertheless, all these attempts to motivate the consumer to spend their money has been a non starter and this can only beg the question; ?why ??
The answer comes as no huge surprise really. Due to the fact that lending establishments are currently unsure of their assets leading them to be very unsure of their liabilities has caused them to plunge into somewhat of a crisis.
For the most part this has been caused through their indecisiveness as to which will be a sound loan and which will not. In other words, they are trying to avoid liability to their businesses caused through a bad lending, with the obvious consequence that they are reluctant to lend for fear of what will happen.
One assumption people can make is that that is the only reason banks are reluctant to lend is due to the fact they are unsure of their position, but that would be slightly off the mark as it is not the full story. It is more likely they have had a rude awakening from the way they administered overindulgent lending over the past few years which was further compounded by lending on a self certification basis to borrowers; lending well in excess of 95%.
This essentially means that their lending book is full of very high risk business. So having realised this they are not predisposed to lending any more in this way. However the problem is they have lent so much money in this way to so many people it is quite difficult to find a client with a low loan to value mortgage and someone who is happy to provide full proof of income.
The big question then is if the interest rates are encouragingly low and there is plenty of money in the banks for them to lend to clients, surely we are all rushing out to spend? I think not and that is purely down to their difficulty in essentially finding someone happy to lend 90% to 95% or 80% on a self cert basis.
In conclusion, my personal opinion is that the mortgage market, if it returns at all, could well take some years before we see a any changes. These changes may be in the way we mortgage our properties leaving behind high loan to values and self certification. Indeed, the ease with which these mortgages have been recently been churned out has resulted in the inflation of the property market over the last few years. It?s arguably a good reason why many of these mortgages should never have been obtained. Our future prospects could be about biding our time till incomes and deposits reach levels compatible with house prices or a more a chilling thought is to simply wait till property prices decrease.
Mortgage Advice from specialist Independent Mortgage Advisors guidance information and free to use mortgage calculators come to Mortgage Route Don't reprint this article. Instead, reprint a free
Furthermore, we are seeing unprecedented reductions in the interest rate those of which we have never seen before, all in the attempt to persuade lenders to lend and borrowers to borrow. Nevertheless, all these attempts to motivate the consumer to spend their money has been a non starter and this can only beg the question; ?why ??
The answer comes as no huge surprise really. Due to the fact that lending establishments are currently unsure of their assets leading them to be very unsure of their liabilities has caused them to plunge into somewhat of a crisis.
For the most part this has been caused through their indecisiveness as to which will be a sound loan and which will not. In other words, they are trying to avoid liability to their businesses caused through a bad lending, with the obvious consequence that they are reluctant to lend for fear of what will happen.
One assumption people can make is that that is the only reason banks are reluctant to lend is due to the fact they are unsure of their position, but that would be slightly off the mark as it is not the full story. It is more likely they have had a rude awakening from the way they administered overindulgent lending over the past few years which was further compounded by lending on a self certification basis to borrowers; lending well in excess of 95%.
This essentially means that their lending book is full of very high risk business. So having realised this they are not predisposed to lending any more in this way. However the problem is they have lent so much money in this way to so many people it is quite difficult to find a client with a low loan to value mortgage and someone who is happy to provide full proof of income.
The big question then is if the interest rates are encouragingly low and there is plenty of money in the banks for them to lend to clients, surely we are all rushing out to spend? I think not and that is purely down to their difficulty in essentially finding someone happy to lend 90% to 95% or 80% on a self cert basis.
In conclusion, my personal opinion is that the mortgage market, if it returns at all, could well take some years before we see a any changes. These changes may be in the way we mortgage our properties leaving behind high loan to values and self certification. Indeed, the ease with which these mortgages have been recently been churned out has resulted in the inflation of the property market over the last few years. It?s arguably a good reason why many of these mortgages should never have been obtained. Our future prospects could be about biding our time till incomes and deposits reach levels compatible with house prices or a more a chilling thought is to simply wait till property prices decrease.
Mortgage Advice from specialist Independent Mortgage Advisors guidance information and free to use mortgage calculators come to Mortgage Route Don't reprint this article. Instead, reprint a free
Subscribe to:
Posts (Atom)
