Mortgage Lenders Revealed To Be Withdrawing Products
Consumers may be increasingly struggling to access mortgage products, new research shows.
In a study carried out by Moneyfacts it was revealed that February saw the number of mortgages available fall by a “staggering” 2,026 from 7,726 down to 5,700. Furthermore, it was claimed that during the last two weeks money lenders have been particularly active in either withdrawing certain offers from the market or tightening criteria on a request to borrow.
Due to a curbing in the availability of mortgage products it may be possible that more homeowners are struggling to keep up with this demand for repayment. This, in turn, could impact upon their capacity to meet other financial commitments such as personal loans, credit and store cards and household bills.
Up until a few weeks ago it was stated that it was mainly major lenders who had withdrawn their range of products. However, Moneyfacts asserted that now smaller institutions, which are largely active within their local area, are coming under pressure. In funding their lending via deposits, the publication pointed out that these providers may have been “immune” from the difficulties faced by the financial sector as a whole. However, with larger institutions increasingly rejecting borrowers, consumers were indicated as going further afield to secure a mortgage. Now smaller lenders were revealed to be turning down applications from those living outside their local region in an attempt to cope with rising demands.
Findings from Moneyfacts also indicated that Bath Building Society and Shepshed Bank have withdrawn their mortgage products, with Bradford & Bingley removing their 100 per cent range. Among those loan lenders restricting their criteria were shown to be Newbury Building Society in which the highest advance available on discount and tracker mortgages has dropped to 500,000 pounds. Meanwhile, Halifax was revealed to have cut its maximum loan-to-value rate from 97 per cent down to 95 per cent.
The personal finance publication warned: “Not only is this withdrawal of products shocking in itself, the speed at which the products are coming off the shelves has also been surprising. In one day we heard from 19 lenders that have made the decision to withdraw products or restrict criteria. Who knows what tomorrow’s news will bring?
“These changes show that no one has escaped the effects of the credit crunch this time. Whether you are a prospective first-time buyer or an existing borrower coming off a deal, there will certainly be less choice out there, especially from the smaller building societies.”
For those consumers worried about their capacity to make mortgage repayments as cheap deals becoming increasingly scarce, getting a debt consolidation loan could be of assistance. In taking out this type of loan, it may be possible that borrowers can merge numerous demands on their spending, such as outstanding mortgage and credit card repayments, into a low-cost monthly repayment. This could be of help to a significant number of people after a recent Abbey Mortgages study indicated that some 64 per cent of those looking to get on to the housing ladder are now set to delay making such a purchase due to concerns over their finances.
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