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The Difference In Remortgages, Mortgages And Secured Loans Then And Now.

The Difference In Remortgages, Mortgages And Secured Loans Then And Now.


    

The Difference In Remortgages, Mortgages And Secured Loans Then And Now.

by Gina Lauren

It has now been officially announced that the recession in the UK is now officially over.

We have been told over the past two years or so that the credit crunch was past to find a few days later that this was not in fact the case, unlike this time when the announcement is actually official.

The reckless lending of banks and building societies was a major contributory factor of the credit crunch in the first place and the financial sector subsequently was more adversely affected as a result of the credit crisis than almost any other industry.

As a result of the slack underwriting causing such a major financial crisis secured loan, mortgage and remortgage lenders tightened up their underwriting to an enormous extent and all in all very many changes became obvious in these lending sectors.

A major factor of the credit crisis was seen in the number of secured loan lenders who closed their doors and these were such lenders as Future Mortgages and First Plus.

One very lax secured loan product that existed until the beginning of 2007 was the 125% LTV secured loan plan where it was possible to obtain a secured loan of twenty five percent above the house value.

Pre credit crunch secured loans were available to the self employed without accounts and the applicant stated his own income on a letter head or a plain sheet of paper accompanied by a business card.

These self certs. were not only part of secured loans but also of remortgages and mortgages.

One secured loan lender does still advance secured loans but at 25% interest rates and the equity is restricted to 50%

Main stream secured loans are now restricted to 70% or sometimes 80% for employed borrowers and 60% to 65% for those who are self employed and they must produce at least an accountants certificate and sometimes even full accounts.

Having gone from lax to strict underwriting it is to be wondered if the end of the expression will see middle ground underwriting appearing.

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Want to find out more about remortgages, then visit Champion Finance's site on how to choose the best mortgage for your needs.


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