Refinance Home – Bad Credit Loans

Increase in house price reductions

In a bid to attract more buyers, increasing numbers of sellers are reducing the asking price for their homes. In fact, over a third (36.7%) of UK properties currently for sale have lowered their prices at least once since first coming onto the market.

The total reduction in prices from properties across the UK amounts to a staggering £2.5 billion. In Stockport, almost half of all sellers (49%) have dropped their asking price at least once – followed by Chesterfield (45%) and Rotherham (44%).

Although sellers could miss out, this is good news for buyers – who could save large amounts on property purchases. So now’s the time to start searching for the most competitive mortgage rates.

Interest-only mortgages – on the way out?

It could be the beginning of the end for interest-only mortgages. This week Santander became the first major high street bank to insist that home owners wanting an interest-only mortgage need a 50% deposit or 50% equity in their home.

These changes will apply to you if you are buying a property – but also if you are an existing borrower who is moving house. If your current loan breaches these new rules then you may have to either switch to a repayment mortgage or to pay off a large chunk of your debt. It’s sensible to check with your current mortgage provider to find out exactly how these changes will affect you.

Potential cap on maximum mortgages

In a new bill proposed by George Osborne, banks and building societies could be barred from offering loans if a buyer only puts down a small deposit.

Before the credit crisis, buyers could get mortgages worth more than the properties they were purchasing – or only a little bit less than the value. But when property prices plunged, many people could no longer afford their mortgages or were faced with negative equity. The new Financial Services Bill would give a new Bank of England committee powers to alter the maximum loan-to-value ratios – in an attempt to prevent rising house prices from getting out of hand.

This means that when house prices are high, buyers could be forced to put down large deposits (up to 25% of the property’s value) – before being approved for a mortgage. But, in the event of an economic downturn, then the Bank would be able to intervene and push for more affordable mortgage packages (between 5-10%).

Compare mortgage deals today.