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The End Of The 100% Mortgage
The Abbey, the only remaining lender to offer a 100% mortgage are to pull this offer on 9th April.
What a difference a year makes!
This time last year there was over 13,000 mortgage products available to UK consumers. This has now dropped to 5,000 and continues to fall.
A year ago Northern Rock (remember them) were tempting borrowers with 125% mortgages deals. An offer too good to refuse for many borrowers towards the riskier end of the market.
Now, no one is offering even a 100% deal. HBOS, (The Halifax to you and me) the UK’s largest mortgage lenders, created headlines last week by stating they would be increasing rates on all mortgages requiring less than a 25% deposit.
About 2 years ago, I was moving to a larger home and tested the water to see how much lenders were prepared to offer me. The answer was £270,000. I was shocked by this as it is several multiples of my yearly income. I was only comfortable borrowing less than half this.
Another experience I can relate first hand is the danger of going to see a Financial Advisor that is linked to or recommended by an estate agent. It’s not always the case but often the Financial Advisor tells the estate agent details of your personal finances. This can make a difference as to the properties they try pushing you towards and their stance when making an offer to a vendor. I have a feeling this happened with me when I was buying my first property. I was not stretching myself, yet the agent seemed to know this and was trying to get me to spend more than my stated budget. All this increases house prices, the danger of repossession and debt management difficulties for UK borrowers and homeowners.
