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UK economy has rarely been so seriously bad.
The UK
has only previously been in such financial crisis when at
war.
It was
to be hoped that the Budget this week might contain some little
gems that would help the recovery but unfortunately this was
not to be.
In fact
certain aspects of the Budget such as the raising of National
Insurance Contributions those employers will have to pay for
their workers will only cause some companies already struggling
to survive to even lose their fight for survival.
It will
even lead to further redundancies at a period when redundancies
have reached epidemic proportions.
In the
midst of all this economic depression there was a glimmer
of hope this week with the announcement by The Council of
Mortgage Lenders that mortgage applications had risen in October
to the highest level since December 2007. Mortgage applications
rose to 55,000.
There
are still citizens who feel that they are financially in a
good place at the moment.
When buying
a property a mortgage is required and this up turn in mortgage
applications
show that some people have the confidence to move house.
Most of
these will be moving to a bigger more expensive property as
if they were down sizing frequently there is no need for a
mortgage as the profit on their current property should make
them mortgage free.
Mortgages
appear to be moving in the right direction with the figures
for October being 33,000 more that those in January.
However
the news from the remortgage front is not the same as for
mortgages.
Remortgages
are the product that is only available to those who already
have a mortgage, and it involves changing the current mortgage
from the existing lender to another to either obtain a better
rate of interest or to raise additional funds for any number
of reasons.
The majority
of homeowners in the past remortgaged at the end of their
current deal which could last from two to five years after
which there was no early repayment penalty.
People
wanting a remortgage are being turned down as they may not
have the required equity in their property.
Underwriting
criteria for remortgages is not nearly as lax as it one was.
The Council
of Mortgage Lenders has been keeping records for more than
seven years now, and the number of remortgages granted in
August this year being only 30,000 made it the lowest month
in all these years.
It is
difficult to understand why remortgages have been so badly
affected by the recession as rates are at their lowest rates
ever for those with good equity in their property.
There
are homeowners who have equity and for those with an equity
margin of 70% and 60% rates of 1.99% and 1.98% respectively
are available on a tracker product.
As such
it makes little sense that remortgages have fallen so badly
while mortgages are on the up.
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