After what feels as though a long time in recession, lenders remain not keen to lend and until the UK general election has ended, it doesn't feel like very much will probably change.
Pre market meltdown times had a mortgage market providing in excess of 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.
So where did the credit crunch come from and may it happen again?
The US finance markets imploded in the 4th quarter of 2007 due to bad credit on the total amount sheets of large finance institutions, which ultimately caused what's known as a market meltdown.
In a market meltdown, lenders stop lending and begin hoarding cash because they're afraid of rising bad debts, leading to bankruptcies and loan or mortgage defaults. They charge higher interest rates in a bid to stem the flow of business or reject all however the safest loans.
The UK economy have been flooded with easy to access borrowed money since the mid 90's, but the credit crunch meant that tightened credit would spell trouble for companies who needing funding by means of loans to pursue their business plans and the consumer, who had become used to freely spending money they didn't have, but could easily access on credit cards for expensive purchases such as for example luxurious holidays and smart cars.
The solution to could it happen again is really a simple one, YES!
If an appetite for investment in more risky markets returns, which you have to say this will, then pushing the limits commercially to gain extra percentage market share and profit, could lead to the whole thing happening yet again. Having said that, it will take sometime to get there, as returning confidence to dabble by investors will be slow to return, but memories will return and the painful effects will soon be forgotten.
So, how is the man on the road directly affected?
UK mortgage and loan lenders are releasing more new products on a regular basis and the best mortgage deals of today are soon replaced tomorrow, but the very good news is that the deals are receiving better and better. The percentage levels that lenders will loan to is increasing and a 90% mortgage, with a competitive interest 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 marketplace, compare mortgage rates on their client's behalf and secure a great mortgage rate to match the borrower's exact needs. Besides finance, IFA's can provide a good value for money service if you are looking to source top quality, value for money, but cheap life insurance cover and pension plans, with advice that is specifically tailored to the individual or families needs.
Financial advice is available in many guises, the internet has led to various channels being designed for the buyer to utilise when seeking insight. https://thecardassociation.com/business-tips-the-card-association-scam/ related price comparison websites have the added advantage of being a one stop shop for all mortgage, loan and insurance needs. By completing your details once, you have the benefit of using their services to trawl the marketplace and find you the very best deals available, but there's still a disagreement 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.