90 percent mortgages withdrawn by Britannia
First time buyers have faced a number of problems when it comes to getting onto the property ladder, even though property prices have come down. Over the past couple of years banks and lenders have become reluctant to hand out mortgage loans, and first time buyers in particular have suffered because of the high deposit levels that lenders have been demanding, which most first time buyers have been unable to raise.
There has now been another blow for first time buyers, after another lender decided to withdraw its 90 percent mortgages.
A tenth of 90 percent mortgages that were taken out over the past three months are thought to have come from Britannia, but the lender has now joined a plethora of other nervous lenders by withdrawing this offering from its shelves, leaving even more first time buyers high and dry.
There are still some 90 percent loan to value mortgage left on the market, but buyers are rapidly running out of choice. In the past the traditional mortgage loan was for 95 percent of the property value, which meant that buyers only had to find 5 percent of the property value in order to get the loan.
In some cases first time buyers were able to borrow 100 percent of the property value and even 125 percent of the value of the property, but these jumbo mortgages disappeared shortly after the onset of the global credit crunch.
For those that are able to raise higher deposit levels such as 25 percent or even 40 percent there are some very good deals available in terms of mortgage interest rates, but those that can only raise small deposit levels such as 10 percent will not find that not only will they pay far higher rates of interest, despite the base rate being just 0.5 percent, but also that they will have very little choice.
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