Return of 100% mortgages - a helping hand for first time buyers?

Countrywide Mortgage Services

Monday, September 12, 2011

"Any lender encouraging people back to the housing market should be applauded. Whilst it will not be appropriate for everyone it is certainly a step in the right direction. Not to dissimilar to the extremely popular top-up mortgages available in the 1980s and early 90s.

"The innovative product launched by Aldermore last week should be welcomed. However, the challenge for Aldermore is to ensure their lending criteria are correctly set, and are not excluding borrowers who most need assistance. The interest rate set at 6.48% is really for those who cannot raise a 10% deposit, as compared to some of the more recently aggressively priced 90% LTV products below 5% this looks a little expensive.

"The borrower would need to fully assess the pros and cons of a higher product rate versus saving a larger deposit to access the better priced lower LTV products.    

"With the largest UK-wide network of mortgage consultants operating in estate agency offices, we can see very early on if  borrowing is becoming easier. I'm pleased to say there has been a gradual increase in more competitive higher loan to value mortgages being offered by the major lenders. 90% loan to value mortgages are now readily available and we have seen LTVs in the 80-90% band rise significantly this year.

"The biggest difficult for buyers remains deposit affordability and any higher loan to value products brought to the market is welcome.

"To really push the property market forward, borrowers particularly First Time Buyers need to be able to access the 90 and 95% LTV banding mortgages in greater numbers to be able to get on the property ladder - remember this is the first property downturn in recent history where 95% LTV has not been readily available.

"Many more 95 percent mortgages are required in the purchase and new homes market from the bigger lenders to have any material impact on the market."

Nigel Stockton, Financial Services Director, Countrywide

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