100% mortgages more difficult to get

A recent report has indicated that it is getting increasingly difficult to find 100% mortgage deals, which were once commonly available to first time buyers with no deposit available to put down on a property. Lenders are becoming more and more reluctant to offer these loans in light of the financial turmoil in the money markets and the effects of the credit crunch.

One reports shows that around a third of lenders that offered 100% mortgages have now stopped offering them, and in addition to this many lenders have also raised their LTVs, demanding at least a 10% deposit on a mortgage loan instead of the traditional 5%. This is just one of the adverse effects of the credit crunch for consumers.

One industry professional stated: ‘This is an understandable about-turn from the lending strategies we have witnessed over the past five years or so, when lenders pushed LTVs to highs of 130%, with 95% products considered the norm.  It is not hard to understand why this pattern has emerged. 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.