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The enduring credit crunch prevailing in the UK financial market has sealed the way for 100% loan options. People waiting for easy loan options will face disappointment.
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The enduring credit crunch prevailing in the UK financial market has sealed the way for 100% loan options. People waiting for easy loan options will face disappointment.
London (Loans-park) February 21, 2008: The final alarm is here. The effect of the disastrous credit crunch is leading to a situation where 100% deals are becoming harder to find. Lenders are no more in the condition to afford the luxury of providing 125% of the value of property as loan. This week four lenders pulled the plug on deals offering an unsecured loan. Earlier, their offers allowed first-time buyers to get on the property ladder without a deposit. They were also criticised for allowing people take on more debt.
This move will definitely lead to higher repayments for first-time buyers when they come for re-mortgage. Giant lender Alliance and Leicester has confirmed that it is removing its 125% Plus Mortgage. Earlier, it offered a mortgage of up to 95%, along with an additional unsecured loan. Stephen Leonard, director of mortgages at Alliance and Leicester, blamed "market conditions" as the reason for this tough decision.
Near about 20,000 Britons take out these loan deals each year. The move will affect those who were intending to enter the housing market. It will also affect those requiring re-mortgage. They will definitely face higher repayments due to lack of competitive deals. The earlier deals were very popular with those who wanted a loan on top of the mortgage, as they did not have the money to pay a deposit or wanted to make a start on home improvements.
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