Banks restricted on mortgages 

All the banks and buildings societies hands are tied when it come to new mortgages, hence why they are being so cautious/fussy on who they lend money to at the moment.

The simple fact is a normal mortgage doesn’t earn the banks & building societies a great deal of money, where as an adverse mortgage would. An adverse mortgage basically means someone that has had or has still got bad credit. The banks and building societies make more money on these mortgages due to the fact that they charge a higher interest rate and higher mortgage set up fees. The downside to this is they are more likely not to pay their mortgage, I mean you only have to look at today’s credit crunch and what banks are in trouble to see who has bad debt.

Northern rock was a different case altogether because they were lending 125% mortgages to First Time Buyers. The meant that when the market crashed there were so many people who couldn’t afford their mortgage payment’s and were repossessed. The downside was they had lent 25% more than what the property was worth!

Taking all of this into consideration you can see why the bank who are still lending money are being very cautious on who they are lending money to. This had a major effect on anyone who is trying to get on the property ladder, move within the property ladder or simply trying to obtain a re-mortgage to reduce their monthly payment.

If you are trying to obtain a mortgage or a re-mortgage then you need to make sure that you seek advice from a good financial advisor, by selecting the right one you are in with a chance. Feel free to read about how to choose a good financial advisor, the article was written via a financial advisor and you are also able to contact him with any questions you may have.

If you are looking to move or need a solution to stay in your home then there are two great solutions out there for you. A quick property sale and sell and rent back, both of these options have terms and condition so ensure that you speak to a good company when making your decision.