Credit Crunch

We are currently in the midst of the biggest crisis in the mortgage and housing market in the last 30 years.

Availability of Mortgage Schemes

There is a lack of mortgage products for borrowers to select from. Lenders have taken the opportunity to:

i) Increase arrangement fees
ii) Increase interest rates and margins
iii) Reduce flexibility
iv) Increase penalties
v) Increase fees for existing customers

Some borrowers have been panicked into accepting existing lender's offers without seeking appropriate advice. This treatment of borrowers will lead to costly difficulties in the future.

Inflation and Interest Rates

The credit crises pushed down interest rates in the USA and Europe, but has only had a marginal effect in the UK due to the rules that govern the Monetary Policy Committee. Inflation is rising due in the main to rising oil and food prices and this has caused confusion in the markets.

It is important to consider for borrowers the risks of both interest rates falling and rising with a professional independent adviser.