Press Release Summary: It was reported in the SUNDAY EXPRESS on 14th October 2007 that cash strapped borrowers with poor credit records face paying thousands of pounds extra to secure a mortgage as the credit¬ crunch takes hold, new figures revealed this week.
Press Release Body: It was reported in the SUNDAY EXPRESS on 14th October 2007 that cash strapped borrowers with poor credit records face paying thousands of pounds extra to secure a mortgage as the credit¬ crunch takes hold, new figures revealed this week. A quarter of all specialist and \"sub-prime\" mortgage applicants - those with a history of missed repayments or credit problems ¬who were accepted for a home loan in August would not be accepted today, said broker The Mortgage Lender. Those who secure a mortgage offer will find it expensive; with some sub-prime deals charging more than 10 per cent annual interest.
A mortgage taken out in August by a customer with a poor credit histo¬ry will now cost a new applicant as much as £200 a month more.
Lenders are tightening \'up on their \'affordability\' criteria, which determines how much. they will lend calculated \"from disposable income. With the higher interest rates charged even fewer people will get a mortgage.
The amount people can borrow is falling too with many lenders only willing to lend around 75 per cent of the value of the property.
Katie Tucker at broker John Charcol said: \"Kensington\'s \'High And\' range is only available to 75 per cent now, down from 85 per cent, and the two-year tracker remortgage rate is 10.5 per cent.\"
The so-called credit crunch stems from activity in the US, where banks lost millions of dollars. When homeowners with bad credit records failed to repay loans .
Lenders fear that risky lending to UK homeowners will lead to the same thing happening here.
Lenders are steering clear of high-risk borrowers. Those that will lend to those with poor credit histories will make them pay for- it. There have been dramatic changes to the rates offered.
Debt experts say that tightening up on how much lenders will offer could save people from bankruptcy.
Mainstream lenders are turning down more mortgage and personal loan applicants, according to new figures.
. Nearly 2 million of those applying, for a loan in the past six months\' have been rejected by banks, said website MoneyExpert.com.
Chase Saunders financial management has already noticed that those with the habit of moving mortgages and the new lending restrictions are already starting to cause havoc.
The number of rejected applications has increased and the ability to maintain contractual payments to mortgages and other borrowings has suffered alarmingly.
Chase Saunders are a complete 'one stop' for financial matters, mortgage and remortgages, secured loans, debt management and IVA,s for those whose finances need a complete overhaul and would recommend that any body who is genuinely struggling with their finances should speak with a debt advisor who will point them in the right direction. Contact Chase Saunders Financial Management on FREE PHONE 0800 138 2299 or make a quick enquiry at www.chasesaunders.co.uk
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