There Have Been Recent Changes To Secured Loans, Mortgages And Remortgages
There Have Been Recent Changes To Secured Loans
, Mortgages And RemortgagesOne of the main differences as regards mortgages, secured loans and remortgages before the recession and now, is the equity margins accepted by the loan lenders.Before the equity was very lax, which meant that many more people were eligible for these three home loans.Mortgages, which are the loan every one needs for property purchase, used to be available at 100% with most lenders, and others were prepared to lend at up to 125%.Nearly everyone needs a mortgage when buying a house as very few people have sufficient money to pay cash.The mortgage lending of the past made many homeowners, without them having to spend a penny of their own money as a deposit.100% mortgages were not a good thing as many were not diligent about the repayments as their own money was not involved.For some time over the past three years, the maximum first time buyer mortgage was 75% loan to value which was far too severe in the other direction, as it lead to many not being in the financial position to get a foot on the property market.As it is difficult to buy any sort of property for less than 100,000, a first time buyer would need a deposit of at least 25,000, and as many of these individuals would also be getting married and have a wedding to pay for, it would be almost impossible for any one to have a big enough deposit.Some lenders are now granting 90% LTV mortgages and remortgages.Remortgages which replace an existing mortgage have always been available, but again the best interest rates are only granted to those with a 40% depositThis means that someone could pay a rate of less than 2% while his neighbour with the same type of property could be paying more than 6%. interest.It is exactly the same with secured loans where yet again, equity is king.For some time now interest rates for secured loans was fairly high although it was nothing like that of credit cards, but now there is some change to these rates.Link Loans has already introduced the lowest rate for a secured loan since 2008, with a rate of 7.for this rate 65% equity is needed.Nemo, the secured lender based in Cardiff, has followed, and as of March 7th they too will have secured loans from 7.9%, and again the equity must be at least 65%All in all perhaps at last things are moving in the right direction, but for the best deals a lot of equity is required.