There’s been an influx of sub prime borrowers coming out of their fixed rates and looking for better rates, but they are being refused because these types of mortgage application are seen as high risk. Borrowers are advised to ensure all their payments are on time due to lenders being very picking with applications they choose to fund. Its been reported by Ernest & Young that the credit crunch may see an economic growth slow down by as much as 1% in 2008 and 2009. Their report also showed evidence of a housing cool down in US and EU, which may overspill to the UK. Last night one of Britain’s well known bank First Direct, closed its doors to new mortgage business. The bank decided to take ‘drastic’ action by not offering mortgages to anyone other than its existing borrowers as they are overwhelmed with applications for home loans. Nat West and Scottish Widow also increased their borrowing costs yesterday. The rash decisions amongst banks are having a knock-on effect on market confidence. Bank Of Ireland are also following suit by withdrawing majority of their mortgage range products by 5pm today. First Time Buyers may no longer be able to get 95% Loans, they’ll find that the minimum deposit required will be 10%. Meaning a typical new buyer in London would have to save around £20,000.
Banks Withdraw from lending
April 2, 2008 by ckfinance1
