| Over
the course of the last three years, the home loans range, which
includes mortgages, remortgages and secured loans have gone
through a period of complete turmoil
It was
a feature of mortgages and remortgages, during this period,
that they had low interest rates.
This was
mainly due to the fact that the Base Lending Rate of The Bank
Of England was reduced to half of one percent, which was introduced
in an attempt to kick start the economy, although this turned
out to be a vain hope.
The low
rates also did little to encourage people to apply for mortgages
or indeed remortgages, and this was caused by the dramatic
fall in property values.
Everyone
felt so unsure of the future that they had no wish to take
on a mortgage to become a homeowner.
Likewise,
those who were already homeowners, preferred to remain in
their current home rather than move to another property due,
not only to the plummeting of property values, but also because
of the general uncertanty of the times that they were living
in
Now that
proprty prices are stabilising and rising, interest rates
have already been hiked up by lenders, such as the Abbey.
Applications
for a remortgage went down in the same manner as had mortgages.
This is
not surprising, as remortgages are simply mortgages that replace
the current mortgage with another from a new mortgage provider.
Remortgages
were arranged to obtain a lower rate of interest or were utilised
for such reasons as debt consolidation.
Secured
loans were more adversely affected than the other two home
loans, and fell so dramatically that lender after lender and
broker after broker exited the market.
Things
for the secured loans setor were looking dire for over two
years, with the abolition of 100% equity plans and even 125%
LTV secured loans which were available previously from a number
of lenders, including First Plus and Paragon.
Self declarations
of income were done away with for self employed borrowers,
who were now compelled to produce accounts when applying for
finance.
There
have been a number of improvements in secured loans during
the past few months.
The first
of these was the re introduction by Link Loans of self certs
for self employed homeowners who can apply for a homeowner
loan providing they have been trading for at least six months,
can provide three months bank statements and have a maximum
LTV of 60%.
Nemo have
increased their LTV for employed borrowers to 85%, and for
the self employed, secured loans are available up to 75% LTV.
The most
recent sign of renewed confidence was shown today, again by
Link Loans, who have increased their maximum loan value from
30,000 to 50,000 which is a signiicant show of confidence.
Secured
loans of 100,000 or more can be obtained from other providers.
It does
at last look as if secured loans are emerging from a long
dark tunnel.
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