One of the important factors affecting the UK housing market is thefall in the number of properties for sale. The real situation is, the total number of available properties has dropped by more than 23,000. And not only are inflated loans no longer available, the quantity of lenders prepared to extend more than 90% of the asking price has also plummeted. So it’s hardly surprising that applicants with a poor credit history are having a hard time.
if you are in a ‘bad credit situation’ though, don’t give up hope just yet; David Hollingworth of mortgage broker, London & Country, believes that “although the market has changed substantially since the onset of the credit crunch, it is still possible to get a mortgage, and there remain thousands of deals out there.”
He advises:
1) Put down the greatest deposit you can afford because the keenest rates are only available to those with a deposit more than 25%.
2) The amount you put down is even important if you are remortgaging.
Hollingsworth explains that, because of falls in house prices, you may have shifted into a different loan-to-value (LTV) band. The advice is to use any savings you may have to reduce the loan-to-value and so get a more competitive mortgage rate. Remember that using your savings as a deposit means that money will no longer be available to you, so leave yourself a buffer in case of short term emergencies.
3) As we said above, people with a poor credit history will find it difficult to get a good mortgage deal. Find out what is held on file about your credit history through agencies, such as Experian, Equifax, or Callcredit Check and ensure that there is nothing unexpected or untoward on your record. It is also important to register to vote – not being on the electoral role will damage your credit rating.
4) Mortgage-brokers can help and make sure he or she is registered with the Financial Services Authority.
5) If you like to know where you are, go for a fixed rate mortgage. And from a current interest rate of 0.5%, the only way is up!
Mark Jenkins is a writer for HouseRepossession.co.uk. Visit us for more guidance on finding remortgage deals, debt solution, house repossession and repossession auctions.
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