RSS FeedsMaximum mortgage borrowing gets the chop
15/01/2008
According to the latest mortgage news a number of mortgage lenders are cutting the borrowing amounts available to those looking at buying their new home.
The research brings to light that eleven lenders began reducing the maximum loan to value from the beginning of December last year. Some of the mortgage lenders have actually withdrawn mortgage products such as 100 per cent mortgages.
The worrying news for some comes as a result of the fears by industry speculation that the property market is set to take a slower pace. Leading mortgage lenders such as Alliance and Leicester, Scottish Widows, Britannia Building Society, Egg and Pi have all reacted to the fears and made changes to some of their current mortgage products by reducing the loans available on the property value to 90 per cent instead of 95 per cent.
A spokesperson from Moneyfacts further reinforced the situation outlining that the market was due for the turn with LTVs rates as high a 130 percent half a decade ago and now flooring at the sub 100 per cent level.
David Knight went on to comment "This more cautious approach of lenders starting to reduce their exposure to the property price fluctuations shows that they have a real concern over the future of the UK housing market.
"With mounting evidence that housing prices are cooling, combined with the increasing number of borrowers facing debt problems, it is not welcome news for those consumers with only a small amount of equity." He finally added.