Many people are starting to ask why they are unable to obtain a mortgage; it is not just those who have an adverse credit history who are being affected. What are the reasons behind the financial institutions relutance to lend money?
Now I am not a mortgage adviser I actually help people to increase confidence and I also help businesses with cost reduction as well as working on a project about training for foster carers.
Going back to the previous question; well it is all down to the now infamous credit crunch. These banks and building societies do not have the confidence or capability to start lending out buckets full of cash. Despite the governments of the UK and USA slashing interest rates the market is showing no signs of picking up. It is as if there is some kind of stalemate taking place. Despite lower interest rates the public at large have been amazed and angered at the fact that some mortgage lenders have not passed on the reductions.
For the average man in the street this seems rather unfair. How often does a lender keep their rates unchanged when the Bank of England increases interest rates? Never is the answer, they are very efficient at increasing their rates. In my opinion there should be a rule which states that they have to pass the interest rate reductions on to their customers.
Governments around the world are trying to find a solution to this stalemate; they need to find a way to get the whole lending business moving again. For now people will just have to make do with that they can get, hardly an ideal situation, but that’s just the way it is.
Many people “in the know” believe that the fall in house prices is set to continue for a few more months. I personally believe that the fundamentals are fine but that the credit crunch and the affect that it is having is making it virtually impossible to buy and sell houses. There is likely to be some more bad news to come but within a couple of years the housing market will start to boom as people start to be able to borrow money again.
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When I read this page I was quite intrigued. It is sad that people throughout the country are so focused at surviving the credit disasters in which they have found themselves. Although I don’t look down upon them (for some have truly been victims of the entire process), I do have quite a high level of respect for those who were prepared to face the financial woes of the day before it ever began.
In response to your comment, “What are the reasons behind the financial institutions relutance to lend money?” I have to say that most of these institutions are as concerned about the fact that someone has “survived” financial turmoil as they are about whether or not they’ve learned from the crisis.
My firm, for instance, focuses upon providing extremely competitive home loans to borrowers who didn’t have to survive their own “personal” crisis, and are making it through this time with exceptionally high credit scores. In other words, they’re being rewarded for being exceptionally astute financial managers of their “own” business.
And shouldn’t such people be rewarded in this manner? My hope is that all who are struggling make it through. However, nobody should be ashamed of having been prepared and wise “prior” to our current mortgage crisis.