Free Online Article Directory. For Article Authors & Publishers
Is Your Building Society Worried You Will Be Made Redundant?
Homebuyers with spotless credit records are being warned that they could find it difficult to take out a new mortgage as banks continue to tighten their lending criteria. Banks and building societies are rejecting loan applications at short notice as house prices continue to fall and they become increasingly jittery about the growing threat of unemployment.
Even borrowers with deals that have several years to run are not safe. Banks have been writing to homeowners to demand that loans are repaid in full within 30 days, long before the end of the mortgage term. Most mortgage contracts contain a clause that allows the lender to pull the plug on the agreement, even if the borrower is not in arrears.
In fact, legal experts say that the latest mortgage contracts are littered with vague and open-ended terms and conditions that allow lenders to do almost anything. For example, the conditions attached to a mortgage can be changed "for any valid reason", according to a contract from one leading lender.
One solicitor said: "Homeowners need to read the terms and conditions more carefully than ever before. It could be argued that a clause allowing lenders to withdraw credit with 30 days' notice is unreasonable, but this has yet to be tested in a Court of Law."
The Prime Minister has been putting pressure on lenders to boost mortgage lending and reduce rates in line with the Bank of England base rate, but even state-owned lenders have refused. Last week Northern Rock said that it was passing on only half of the latest base-rate cut to its variable-rate mortgage customers - 0.25 per cent rather than the full half a percentage point.
Banks are struggling to source funding to offer new mortgages. Most banks now use retail deposits to fund lending, but low interest rates do not help banks and building societies to attract savers. This is the biggest problem facing lenders and the only thing they can do is to pick customers who pose the safest risk.
Against this difficult backdrop, experts say that banks are using any excuse to reject customers. If a lender suspects that a borrower has submitted an application with information that is not 100 per cent accurate, it is likely to be refused. A change in circumstances can also worry lenders. Banks are also examining the credit histories of new customers more closely than ever. Lenders have been known to reject applications because of missed mobile phone payments or because a borrower has been overdrawn on his or her bank account too frequently.
Lenders have also tightened the rules on income multiples. Many banks are unwilling to offer loans worth five or six times a borrower's salary, which was common during the boom times. Performance-related income, such as bonuses, is also now routinely excluded from affordability assessments. If a borrower secured a previous deal with high income multiples, banks will be wary of extending the same level of credit again.
There has also been no let-up for first-time buyers. One mortgage deal in four now requires a deposit or equity stake of 40 per cent, as lenders seek protection against falling house prices and the risk of negative equity.
Mortgages aimed at borrowers with smaller deposits are limited and considerably more expensive. The emphasis on low LTV lending means that falling house prices are also a headache for homeowners who need to remortgage.
A 150,000 pound mortgage on a home worth 200,000 pounds has an LTV ratio of 75 per cent, which is the maximum available now from a number of leading lenders. But if that home falls in price by 15 per cent, the same mortgage has an LTV ratio of 88 per cent.
There are ways to make yourself more attractive to lenders. Borrowers who do not need to remortgage or move house in the next year should pay off both capital and interest each month and overpay whenever possible. This will ensure that they have the maximum amount of equity possible when the time comes to take out a new deal. Some mortgage providers will charge a penalty for this, but most will allow borrowers to overpay by up to 10 per cent a year. This puts homeowners in a much stronger position.
You should order a copy of your credit record to check that all the information about you is correct. You can apply directly to the credit-reference agencies - Experian, Equifax and Callcredit - for your file.
After all it makes sense for borrowers to resolve any problems that would show up on a credit report by contacting the lender and clearing the debt.
Author Resource:-
Struggling with your Mortgage payments. Take a look at the Brokers Online web site. We offer our clients articles and information on dealing with Debt . We also provide Debt Advice, Debt Management, Debt Plans, IVA's and Redundancy Insurance.
While you purchase a home, you'll probably be making most significant purchases in your lifetime. Because buy a home is such a significant financial endeavor, you will have to keep in mind essential factors that go into shopping for a new home.
For most of us, buying a home is our biggest life investment. As a result of a new house being such a major purchase, you will have to consider all the important fundamentals about what is a must to do to buy a mortgage and get the appropriate mortgage you can afford.
Bottom line is that housing is much more affordable today than three years ago. This is causing downward pressure on inventory. Add to this that the pipe line is not being filled with new foreclosures as fast as it was even two years ago and you will see price appreciation.
It's not an easy decision to make as to whether you lease or purchase your business premises. Your company buildings such as offices, factories and warehouses may be your most expensive business venture, but they can also turn up to be the largest business investment too. It is therefore advisable to take some time to think over this huge decision.
My potential buyer was looking at the home with an eye to renovating it. She told me she would be buying this home without any financing. I almost said to her, "I can't not get you financing, you will have to buy it without something else." But I just smiled and told her that I felt sure this house would go quickly for cash. (most of our REO inventory sells for cash).
For the past three months Gail and I have been looking for a home to buy. Every few days I would check out new listings in the area we chose. We toured a few homes a week. We made an offer on a home on Wednesday. The offer was accepted. We still need to qualify for the mortgage and complete our home inspection, but I foresee no obstacles t a successful close
Here are the reasons we bought now...
During the current market environment, numerous people are looking for ways to save cash, and one avenue that is becoming very effective, is to benefit from refinancing mortgage. Home loan refinancing is basically exchanging an active loan deal and its connected interest rates with another mortgage.
Mortgages facilitate Canadians to pay for homes, lower the rate of interest on homes they previously have, and tap otherwise untouched house equity and exploit it for home improvements. Devoid of the favorable influences of mortgage loans, it would have been compulsory to buy that home with money. Home mortgages are a lot more than mere property loans.
Home mortgages are a lot more than basic property loans. With the help of refinancing, you will be able to benefit from better rate of interest, longer or shorter pay off time, or save for old age! With the help of a home equity line of credit, you can consider that spare funds for those unpredicted emergencies which come about.
The number of houses in foreclosure has escalated to more than 13 million houses across the nation. While no homeowner wants to have their property foreclosed upon by the bank, many have no other option. Mortgagors that want to avoid foreclosure have to be very proactive the second they cannot afford their loan installment.
![[Valid RSS feed]](http://www.articlelisted.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Michael challiner's Author Feed
Print This Article
Add To Favorites 