It is to be considered if the lot of mortgages, remortgages and secured loans is as it should be.
Before the credit crunch, prospective homeowners looking for a mortgage to buy their first or subsequent home, existing homeowners wanting a remortgage or a secured loan were plentiful as were the deals offered by lenders hoping to catch as much of the then money making market as they could.
Mortgage and remortgage lenders locked horns to entice as many customers as they could by competing with many deals, such as low interest rates, 100% mortgages and remortgages or even better loans to values than this, with the Northern Rock offering both of these home loans at up to 125% LTV.
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So, if someone had a house with a value of £200,000. that they could obtain a mortgage or remortgage of up to as much as £If he earned enough money.
However at that time income multiples of as much as seven times were available from certain lenders. and therefore a person earning £30,000 could in theory get a mortgage or remortgage of £could borrow as much as £210,000 and have a mortgage of 125% LTV.
This of course lead to many a disaster with some homeowners having mortgage payments that they could not possibly meet.
It was coupled with the fact that inflated incomes were common for both mortgage and secured loans due to lenders accepting self declarations of net profit for employed borrowers., One lender, that is Future Mortgages, even accepted self certs. for employed applicants.
All these sort of practices ended at the recession with no self certs for mortgages or remortgages, and secured loans on this plan were only available from one lender at a very tight loan to value and with expensive rates of interest.
For some time the loan to values were reduced to 75% for first time buyers and 80% at the most for those who already had been mortgage payers.
Secured loans loan to values for a time were as restricted as 60% for the self employed and 70% for those in employment.
During this current year this has all slackened off a little, and mortgages and remortgages are on the market at 90% from a few lenders, and 85% for the majority, and secured loans now have loan to values of 85% for employed applicants and 75% for the others.
Only two weeks ago, a new lender brought in loan to values of up to 90%, but the maximum loan is only £The rates are expensive and the most anyone can borrow is £15,000.
Therefore, although 2010 has witnessed some signs of progress in the finance sector, the changes and benefits both for the consumer and the professionals are not as much as was hoped.
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