According to a recent report the biggest problem that is facing those looking to take out a mortgage or remortgage is availability, with many lenders having slashed the range of deals that are on offer as a result of the global credit crunch, which has seriously affected their ability to take on new mortgage customers.
Many banks and lenders have had to cut the range of deals that are on offer to mortgage customers over the past year, and the number of total mortgage deals has fallen by around two thirds.
Consumers that are looking for a mortgage these days face a range of problems. First of all lenders have been hiking up interest rate despite the base rate cuts from the Bank of England. This has resulted in lack of affordability for borrowers.
Many mortgage lenders have also increased the size of the deposit that they require from borrowers, which has also reduced affordability for borrowers, with first time buyers suffering more than others due to having no previous property from which to take equity to put towards a deposit.
One industry official recently stated: “If you’ve not got a substantial deposit nowadays or equity in your house then your choices are now severely limited. On average if you are remortgaging you now need a deposit of 15.5 per cent if you take out a fixed or variable mortgage.”
With lenders continually tightening their lending criteria as a result of the global credit crunch, and increasing number of people have found it more and more difficult to get the mortgage that they need at an affordable rate, and this has had a sever impact on mortgage approval levels over the last couple of months.
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