RSS FeedsEmbrace the rise in costs of mortgages
03/01/2008
According to the Bank of England, consumers could see a hike in mortgage costs and availability of loans for house purchases as a result of the state of the credit economy.
Mortgage and other financial lenders have already begun their campaigns to be more selective to what products they offer and which people can qualify for loans. Associated fees tied to mortgages has also been a hot topic of discussion with predication that setup fees for arranging the mortgage and margins are likely to be increased.
Those mortgage applicants for have tarnished credit histories will also find it difficult to get a cost effective mortgage, some may even find they are likely to be rejected due to lenders raising the bar on the lending criteria. Published statistics show that 32% more lenders have made their credit scoring criteria tighter.
The big credit crunch clearly indicates that lenders are becoming more risk averse and customers may not have seen the end of being at the receiving end.
The chief UK and European economist at Global Insight Howard Archer, commented,
"The Bank of England credit conditions survey for the fourth quarter indicated that lending to households had tightened and become more expensive.
He also went on to add, "Furthermore, the availability of credit for households was expected to diminish further over the first quarter of 2008, which will add to the growing downward pressures on consumer spending."
The outlook could potentially be quite bleak for borrowers or even those looking to take out loans and credit cards coupled with worrying facts about the house price market and increases in people defaulting on their mortgages.