Phantom mortgage cause problems for homebuyers
According to a recent report a number of lenders are offering mortgages that do not actually exist, which is causing problems for many buyers who think that they have found the perfect mortgage deal only to find that there is no mortgage deal to be had.
The problem is occurring as the government continues to put renewed pressure on lenders to help borrowers, and brokers are not getting angry after claiming that some lenders are getting around this issue by creating phantom mortgages that do not really exist.
Mortgage brokers have claimed that whilst the mortgages appear to be available from the lenders, when a consumer actually makes an application for the mortgage they are turned down. The problem seems to be affecting first time buyers in particular according to brokers, as many have very little by way of deposit to put down, making them higher risk to lenders, who are now being far more cautious over who they are prepared to lend to.
One mortgage broker stated: ‘It would appear that some lenders are in the 90% loan-to-value market in name and product – perhaps to satisfy the Government’s request for banks to lend – but the reality is that they don’t want to lend at this level because they feel it is still too risky and reject borrowers who apply.’
Another broker said: ‘The market is tighter now and lenders are far more cautious. Lending criteria have tightened significantly. One of the major problems is valuations. Lenders and valuers are being more cautious on prices and that can mean lenders won’t offer a 90% loan-to-value mortgage.’
He added: ‘Government should take swift action to help buyers as the first glimmer of interest in the property market is surfacing. The Treasury should instruct those lenders in whom it has a stake to allocate a certain amount of their funds to borrowers with a 10% deposit or less. This would create greater competition in the market.’
Related Posts
Take fast action to get a good mortgage deal
A number of mortgage brokers have been stressing the importance of quick action to consumers, stating that in order to get a competitive mortgage they need to act quickly.»
Is it the end for self cert mortgages?
A recent report has suggested that the days of self cert mortgages could be coming to an end, as lenders become increasingly cautious and stringent with regards to who they will lend to in what has become a very volatile and difficult financial climate. »
Lenders need to be more cautious
Over recent months we have all heard about the various effects of the global credit crunch, which has created havoc in the UK’s money markets and has resulted in many changes. One of the major changes that most of us have heard about is the tighter credit conditions that have resulted from the credit squeeze. According to reports lenders have really tightened up on their lending criteria, are being far more careful with regards to how much new business they take on, and are being far more cautious about who they will lend to.»
The struggle gets tougher for first time buyers
Over recent months there has been a great deal of speculation over house prices in the UK, with the general consensus being that house prices are set to fall by as much as 20% over the next year or two. With house prices having soared by 200% over the past decade, this may seem like a drop in the ocean – particularly considering that the average income has only gone up by around 53% in the same period. However, it is the news that many first time buyers have been waiting for, as for many falling house prices meant that they could finally look at getting their foot onto the first rung of the property ladder.»
Should those with bad credit be relying on mortgage brokers?
A recent report indicated that many consumers with poor credit were becoming increasingly reliant upon mortgage brokers in order to find them a suitable mortgage deal, with many assuming that they will not be able to find a mortgage on their own due to their credit. Whilst it is more difficult to find a suitable mortgage if you have bad credit, particularly in the current financial climate, authorities are concerned that some may be a little too reliant on mortgage brokers.»
Leave a comment
More from Mortgage News category
Ads and sponsors