Abacus Daily Debt News

Mortgage Criteria Gets Stricter

Borrowers are finding it tougher to find a mortgage as cautious lenders continue to withdraw and change deals.

Many lenders are continuing to tighten their lending criteria as the credit crunch continues to bite.

Lenders’ funds are running out and therefore higher deposits are being required from first-time buyers. Some of the smaller building societies have been restricting or stopping lending due to the ongoing financial turmoil.

The 100% percent mortgage is fast becoming at thing of the past.

Many homeowners who attempt to manage debt by sticking unsecured debt on top of their mortgage every couple of years are facing a debt management crisis.

This seemed to be a good idea when house prices were on the rise and a good mortgage deal was easy to come by. Debts levels were easy to manage could be swept under the carpet by secruring debt on a property. However as normally is the case in life, the easy option has long term ramifications.

As the level of debt secured against a property continues to rise, then so do the payments to service this debt. This cycle of events eventually forces homeowner to downsize or face repossession procedings.