After what feels as though an eternity in recession, lenders are still not keen to lend and until the UK general election is over, it doesn't feel just like very much is going to change.
Pre market meltdown times had a home loan market providing more than 25,000 different mortgage deals and loans galore, but today the united kingdom markets have significantly less than 5000 mortgage products on offer to the consumer.
Where did the market meltdown come from and may it happen again?
THE UNITED STATES finance markets imploded in the 4th quarter of 2007 because of bad credit on the total amount sheets of large finance institutions, which ultimately caused what is known as a market meltdown.
In a credit crunch, lenders stop lending and start hoarding cash because they're afraid of rising debt, resulting in bankruptcies and loan or mortgage defaults. They charge higher interest levels in a bid to stem the flow of business or reject all but the safest loans.
The UK economy had been flooded with easy to access borrowed money since the mid 90's, but the market meltdown meant that tightened credit would spell trouble for companies who needing funding in the form of loans to pursue their business plans and the buyer, who had become used to freely extra cash they didn't have, but could easily access on credit cards for expensive purchases such as luxurious holidays and smart cars.
The answer to could it happen again is a simple one, YES!
If an appetite for investment in more risky markets returns, which you have to say it will, then pushing the limits commercially to get extra percentage market share and profit, could lead to the whole lot happening yet again. Having said that, it will require sometime to obtain there, as returning confidence to dabble by investors will undoubtedly be slow to return, but good times will return and the painful effects will be forgotten.
So, how is the man on the street directly affected?
UK mortgage and loan lenders are releasing more services every day and the very best mortgage deals of today are soon replaced tomorrow, but the very good news is that the deals are getting better and better. The percentage levels that lenders will loan to is increasing and a 90% mortgage, with a competitive interest rate is out there to be found, if you know where you can look.
Just how do Independent Financial Advisers add value?
Independent Financial Advisers (IFA's) are well placed to search the market, compare mortgage rates on the client's behalf and secure a great mortgage rate to match the borrower's exact needs. As well as finance, IFA's can offer a good affordability service if you are looking to source top quality, affordability, but cheap life insurance cover and pension plans, with advice that is specifically tailored to the average person or families needs.
Financial advice comes in many guises, the web has led to a plethora of channels being designed for the consumer to utilise when seeking help and advice. https://money.com related price comparison websites have the added advantage of being a one stop look for all mortgage, loan and insurance needs. By completing your details once, you have the benefit of utilizing their services to trawl the marketplace and find you the very best deals available, but there is still an argument for utilizing the services of a local for you, independent financial adviser. The IFA may take the time to comprehend any unusual circumstances that you may have and tailor their financial advice accordingly plus some finance price comparison websites are actually offering both options under one roof to facilitate the requirements of a far wider consumer group.