The Council of Mortgage Lenders says that in 2008 there were 46% fewer first-time buyers than in 2007. Those first-time buyers that did get on the housing market were reported to have put down a 22% deposit on their new home. Estate Agents and Mortgage brokers would like to forget 2008 as it was probably the bleakest year ever for arranging a mortgages and buying a homes. It was a disastrous year as mortgage transactions seemed to have fallen off a cliff as house prices continued to tumble downwards. First-time buyers decided to hold off buying new homes as mortgage rates were not available unless you had a big deposit. All this made 2008 a very challenging year for first-time buyers and homeowners looking for new mortgages.
More people looking to buy in 2009
The Royal Chartered Surveyors recently said that the number of enquiries from people looking to buy a home had picked up since the beginning of 2009. Mortgage brokers have reported many more enquiries due to some very cheap interest rates that are around at the moment. This combined with the drop in house prices since the start of the credit crunch eighteen months ago has encouraged many more people to start looking again at buying properties and remortgaging their current homes. Property now looks more affordable to first-time buyers than at any other time in the last ten years.
It’s thought that house prices may be about to bottom out. The wild card in terms of house prices bottoming out is whether or not unemployment is going to continues to rise or fall in 2009/10. Unemployment is predicted to rise to three million people this year. This may encourage more people to sell their homes due to unemployment. These new homes coming onto the house market could well continue to depress house prices further.
Facing Financial hardship then talk to your mortgage lender
The government has been very clear that they want mortgage lenders to go easy on mortgage borrowers who are facing unemployment and financial hardship at present. They do not want the lenders to be quick to repossess homes. Anyone who is facing financial meltdown or struggling to meet their mortgage repayments should talk to their mortgage lenders as soon as possible.
Mortgage Lenders don’t have appetite to lend money
It is unfortunate that mortgage lenders still do not have a good appetite for lending money at present to mortgage borrowers. There are some low fixed interest rates around at the moment. But regrettably the lenders are not releasing any of theses rates to borrowers that are looking to borrow more than 85% of the value of your property. Between 85% and 95% the interest rates available is higher and it seems that the majority of these rates are only offered by certain lenders who will remortgage their own borrowers.
It important for mortgage borrowers and homeowner’s looking to remortgage to have a clean credit report. If you have missed a credit card payment during the last six to twelve months you may well find lenders refusing to offer you a mortgage or a remortgage. In these circumstances the likely interest rate you may be offered would be from 7% to more than 10% from one of only three remaining mortgage lenders that are still willing to lending. If you are unlucky to have any defaults, arrears or county court judgements on your credit record than applying for a first-time buyer’s mortgage or trying to remortgage away to a new mortgage lender will be a fruitless exercise.
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