mortgages john charcol
Thursday, March 11th, 2010Problems Grow for Homeowners as Mortgage Products Continue to Fall
The number of mortgage products on sale fell considerably in the twelve months during 2007 to 2008, decreasing from almost 11,000 to just over 3,000.
These market changes hadn’t been seen for almost a generation with the credit crunch leading the UK’s banks and building societies to charge higher interest rates on the money they lend out and withdrawing thousands of their mortgage deals.
With many homeowners on fixed rate mortgage deals that typically last between two and five years, as many as three million people coming to the end of their agreements over the next few years could end up paying a lot more for new deals.
Mortgage broker Ray Boulger of John Charcol said, “If somebody has already got a mortgage and they are looking to re-mortgage, but they can’t get a deal better than their lender’s standard variable rate, then that means they are going to end up paying a rate significantly higher than they could have expected a while ago. It’s hard on everybody coming to the end of a deal.”
With just under 1.5 million homeowners in Britain coming to the end of a two year fixed rate deal in 2008, Boulger says, “In today’s market, clearly a lot of those people will have wished they’d taken out a longer term deal.”
The average cost of a mortgage in the UK has risen by £200 according to industry research company Moneyfacts. They claim that homeowners whose two year fixed deal ran out in 2006 could have typically re-fixed on a similar deal at 4.34 per cent, but in 2008 that figure has risen to 6.65 per cent.
With banks and building societies becoming more reluctant to lend money to so many people, mortgage holders whose fixed deals are running out are finding it increasingly hard to re-mortgage at a discounted rate.
One such consumer said, “They were all willing and supporting mortgage applications several years ago, and five years ago I had a fantastic deal. Now it’s come to the point that I need their help and they’re wiping their hands.”
Many consumers have fallen foul of the global credit crunch affecting banks, resulting in them pulling all of their 100 per cent mortgage deals on offer. One customer of the first British bank, Northern Rock, to become a victim of the credit meltdown has been left without any deals on offer for their situation, saying, “There are absolutely no deals out there for us.”
Having taken out one of Northern Rock’s Together mortgages, borrowing 125 per cent of the value of the home they bought, they have since seen the bank become nationalised and not willing to offer a comparable mortgage deal. None of the other high street lenders are prepared to do so either.
Things are no better for first time buyers with banks asking for big deposits to secure a mortgage deal.
These problems are largely due to the crisis in sub-prime lending in the US which has affected banking systems globally. The amount of money banks were willing to loan each other reduced dramatically which had the knock on effect of them being hesitant about lending money to customers in the form of mortgages.
Editor of MoneyWeek, Merryn Somerset Webb said, “The fact is that banks have got to the point where lending money out via mortgages is risky, very risky. It didn’t seem risky two years ago, now it’s clearly very risky and if they don’t want to lend money out, they won’t.”
About the Author
Phil is an author of several articles pertaining to Mortgages. He is known for his expertise on the subject and on other Business and Finance related articles.
Making sense of the mortgage maze
|
|
Fitted Flame Cap-Charcol Black Grey $15.99 The smooth brushed cotton fabric of this solid charcoal grey Ultrafit fitted cap, detailed with coordinated black flame embroidery at the bill highlighted by white outline stitching, makes it ideal for all seasons. The structured, low profile crown is constructed out of 6 panels of durable soft cotton with a bit of spandex to give it stretch and flexibility for comfortable wear. It is complete with air vents for circulation and topped with a fabric covered button. The curved bill of the hat is accented by fine embroidery of immaculately executed flames with intricate outline, totaling 30,000 stitches. Finished with a patented spandex hatband on the inside of the crown, this hat ensures a perfectly secure fit for all sizes even after repeated wear. Made of 97% Cotton, 3% Spandex. Crown measures 4-1/2? high, Curved bill measures 3? long. ONE SIZE Fits Most. Patented Ultrafit One construction. Dry Clean or Hand Wash Only. Imported. |
|
|
Flame Cap (03)-Charcol Black Grey $13.99 This solid charcoal cap with black flame embroidery licking the bill, highlighted by an outline white stitching, will keep you warm and comfortable in sleek style. Made of luxuriously soft, super fine wale cotton corduroy, the structured crown is constructed out of 6 panels detailed with air vents and topped with a matching fabric covered button. The curved 3? bill is accented with a fine, smooth flame embroidery consisting of 30,000 stitches. The inside of the hat is lined with a padded hatband for comfortable wear, and the back of the hat is finished with an easily adjusted Velcro strap for a secure perfect fit. Made of 100% Cotton. Crown measures 4-1/2? high, Curved bill measures 3? long. ONE SIZE fits most, with adjustable Velcro strap. Dry Clean or Hand Wash Only. Imported. |
|
|
John Citizen $13.99 John Citizen |
|
|
John William $20.99 John William |
