| It
has just been announced that the UK recession is now officially
over making it the last of the world's richest nations to come
out of recession and to witness the start of new economic growth.
The changes
seen over the last three years in mortgages, renmortgages
and secured loans makes you think what the future holds now
for these home loans.
Secured
loan lenders abounded and were making healthy profits and
had many secured loan plans on offer.
Self declarations
of income were available for the self employed without any
back up proof, meaning that a self employed person could simply
declare his net profit on a letter head or similar without
any additional proof being required.
The recession
changed this and self declarations of income stopped and secured
loan lenders required an accountant's letter or even two or
three years fully audited accounts.
Before
the credit criss there was the famous 125% equity plan first
intoduced by that household name, First Plus who specialised
in lending up to 25% more than a property was valued at.
After
the start of the recession, equity margins were reduced to
70% for employed applicants and 60% to 65% for the self employed
although Blackhorse and Nemo have now increased the loan to
value of employed borrowers to 80%.
Before
the recession the Cardiff based secured loan lenders, Nemo,
granted loans to the self employed without accounts but since
2007 they have not accepted applications from the self employed.
A number
of secured loan brokers have gone out of business. Many previously
successful secured loan brokers have stopped trading.
Secured
loan business is well over 80% less than it was at the end
of 2006.
Remortgages
and mortagages have also become pale shadows of their former
selves.
Equity
margins have tightened during the last three years with 100%
plans a thing of the past, let alone the 125% mortgages and
remortgages which were granted by The Northern Rock, and just
think about what happened to them.
Many mortgage
lenders restricted their lending to between 75% to 80% making
it difficult for first time buyers to get their foot on the
first rung of the property ladder as such a large deposit
was required.
It is
to be hoped that with the official statement that the recession
is over that these home loans will become a happy medium between
their pre and during the credit crunch underwriting to kick
start this ailing financial market and that no more lenders
or brokers will go to the wall.
|
