HARP is intended to allow underwater homeowners to refinance their loans at record low mortgage rates. The first version of HARP was intended to allow those with loan-to-value ratios of up to 125% to refinance. In practice, many lenders imposed ... HARP 2.0 Loans Spike in May Due to Record Low Rates
The economic crisis which has affected the majority of U.K. residents has been the most serious in living memory. It has left many people unemployed and this has lead to many families being rendered homeless as a result of losing their jobs and making it impossible to meet their mortgage payment.
To help improve this situation the Government introduced the lowest ever Bank Of England base rate of only 0.05%. Lending and borrowing is a basic requirement of a healthy economy, and the low base lending rate, it was hoped, would encourage borrowing and lending, and lead to banks and building societies granting mortgages, remortgages and loans at a low rate of interest.
It would make a mortgage and remortgage more affordable and kick start the economy. It has not worked out like this. The writer of this article has been involved in the secured loan and remortgage industry for twenty five years and in all this time has rarely seen the secured loan rates as high as they are now.
The remortgage and mortgage rates did appear low this year so far. In particular, if you were on a tracker mortgage or remortgage which of course tracks The Bank Of England base rate, your payment would be very favourable. With the Bank Of England announcing last week that the low base rate was still being held, those with a tracker are in a good position.However, the Government must be very disappointed to observe that RBS which is 70% taxpayer owned withdrew a number of their better mortgage and remortgage products at the end of last week. The Woolwch has raised it's two and five year fixed remortgage and mortgage rates by a substantial 0.06%. One building society which is trying to help existing customers is The Nationwide.
It may be helping it's customers to some extent, but it is reintroducing one of the lending practices which precipitated the current economic crisis. This reintroduced product is the return of the 125% mortgage.It is not such an extensive product as the 125% plan for remortgages, mortgages, and secured loans that existed until recently. What the Nationwide has introduced is available to existing customers only. If a homeowner is living in a property which now has negative equity, providing they have a 5% deposit, The Nationwide will grant a mortgage of up to 30% of the new property value.This will be of great benefit to homeowners who want to move not only as a caprice, but have to move out of necessity, through having to move because of work commitments, etc. It may be of benefit to such homeowners, but it is reintroducing one of the reasons why The Northern Rock collapsed, and is now 100% state owned. Hopefully other bad lending practices which caused a great deal of the credit crunch will not be similarly reintroduced.
Related The 125% Remortgage and Mortgage is Back Issues
0 komentar:
Post a Comment