Mortgage lenders tighten their belts
It’s getting tougher to find a mortgage.
In the past six months, nearly one in three applicants has been rejected by lenders, who are tightening their loan criteria.
The combination of the US credit crisis, which has seen a record number of poorer mortgage holders default on their payments, and the stock market turmoil and housing market certainty on this side of the Atlantic is making lenders very nervous indeed.
As a result, according to today’s Daily Telegraph, an estimated 372,000 of the 1.2 million people applying for a mortgage between April and September were turned down.
This compares to an estimated 230,000 people – or one in five applicants – who suffered a similar fate in the six months to March.
More and more lenders are deciding whether to lend on the basis of what they think people can afford rather than just their earnings.
That means they’re looking very closely at prospective borrowers’ existing debt levels – and how they’re coping with the repayments.
But that doesn’t mean that if you’re finding it tough to get a mortgage you should grab anything you can get.
Do your best to get your finances in good order before you go looking.
And, if you want to get the best possible deal for your circumstances, it’s more important than ever to enlist the help of an independent expert.
