90 percent mortgages make a comeback with the Rock
Previously troubled and now nationalised bank Northern Rock has announced in the past few weeks that it is making a multi-billion pound return to the mortgage market, and will be offering mortgage loans of 90 percent of the property value to eligible consumers.
The lender will offer a range of loans of up to 90 percent, which many lenders are now unable to do, with some demanding deposits of between 25 and 40 percent from borrowers.
The fourteen billion pounds return to the mortgage market by Northern Rock means that after a year of turning customers away and sending them to rival lenders the company will now start offering mortgages on a large scale again.
For many buyers the decision has come as good news, as many that wanted to take advantage of falling house prices and get onto the property ladder have found that they cannot get a mortgage at all due to restricted mortgage products and tighter credit conditions or that they are expected to put down a huge deposit.
One government official stated: ‘There are a lot of sensible people out there earning good money who can pay a decent deposit but can’t get a mortgage. Northern Rock can move beyond 75%, perhaps up to 90, to get that kind of lending going again.’
However, there will be a number of strict regulations put into place with regards to the type of lending that the bank can get involved in, according to reports.
Following an economic mini-summit in Berlin recently, Prime Minister, Gordon Brown, said: ‘We have got to show we can restructure the banking system around sound principles that deliver the integrity and the trust and the openness and transparency that is essential for people to once again trust the banks.’
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