More bad news for those with low deposits
November 2, 2008
Over recent months an increasing number of lenders have been demanding larger deposits from borrowers looking for mortgages, and this has resulted in many first time buyers and low income buyers being squeezed out of the market as they are unable to raise the deposit required to get the mortgage that they want. Recent reports suggest that over the past couple of weeks the problem has become worse, and these groups could face increased difficulty.
Nationwide, for example, recently cut the amount that it is prepared to lend to consumers, and raised the minimum deposit level for mortgages. The lender stated that it would no longer accept new customers that did not have at least a 15% deposit for most of its mortgage products. The lenders has also cut the income multiples that it offers, so borrowers will not be able to get as large a loan as they might have previously.
First time buyers have been experiencing a range of problems for many years, with the change in deposit requirement being one of the many hurdles that this group of consumers has experienced. In the past first time buyers were priced out of the market by rocketing property prices, which reached levels that many simply could not afford. However, over the past year house prices have been falling month on month.
This, however, has not resulted in better news for first time buyers, as many have now found that they cannot get a mortgage to buy a property because of the tighter lending conditions in place from lenders. Those that are able to qualify for a mortgage in terms of their credit and eligibility are expected to find a larger deposit, which is proving very difficult for the average first time buyer.
- First time buyers paying more for mortgages due to deposit levels A recent report has shown that those taking out mortgages with just a small deposit to put down are paying far more each year for a mortgage than those that have a higher deposit level
- Much larger deposit required from first time buyers Whilst industry experts are stating that first time buyers can at last look forward to increased affordability due to falling house prices and interest rates, both of which are expected to continue falling over the
- News
- Nationwide cuts interest rates for some borrowers Consumers in the UK have been relieved to see that a number of lenders have reduced the interest rates on their mortgage products slightly after swap rates, which are indicative of mortgage interest rates, fell
- BBA reports on slipping mortgage lending figures The British Banker's Association has recently released figures that show mortgage lending levels slipping for the month of October. Industry officials have suggested that some consumers may have used deposits to fund other purchases over
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