| 445 mortgage products withdrawn in a day! | | | | Lender 1 Valuation £136,000 this equates to a |
| Monday saw the biggest withdrawal of Mortgage | | | | £31,000 drop in value or 19% drop in value. At |
| products ever seen in one day. Michelle Slade, analyst | | | | first I thought this must be a mistake. But on |
| at Moneyfacts said that Black Monday saw 445 | | | | questioning the Lender on behalf of the client they |
| products withdrawn from the Market. There were | | | | were adamant that that was the valuation they |
| 3,525 residential mortgage products on offer before | | | | would use for Mortgage purposes. The client needed |
| Monday this fell to 2,988, but even worse was the | | | | £136,000 to remortgage and pay off her |
| Buy to Let products down from 662 to 481. Michelle | | | | father who had stumped up some money so she |
| Slade said commented" With an 11.4% cull in | | | | could get on the property ladder two years ago. This |
| mortgage products Monday was the largest ever | | | | lender would only lend £120,000 based on the |
| decline in mortgage products available to the public. | | | | new valuation. |
| By the end of Monday there were just 3,469 | | | | Lender 2 valuation £130,000 this equates to a |
| products left from 2,914. She continued " The current | | | | £36,000 drop in value or 22% drop in value. |
| Turmoil has hit the Buy to Let sector the hardest | | | | Again the lender was quizzed but to no avail they |
| with almost 60% of products withdrawn but the | | | | would only lend £116,000 not enough!!. |
| residential sector is not far behind" | | | | This shocked me as they actually paid more for the |
| One of the biggest causes of the withdrawal of Buy | | | | property two years ago than both lenders had |
| to let products was Bradford and Bingley withdrawing | | | | valued the property at and they had added a double |
| its entire range, along with UCB Home Loans and The | | | | garage and completely renovated the house. |
| Mortgage works who have both temporarily | | | | In the end the client has stuck with their original |
| withdrawn there product ranges due to | | | | lender and moved to an interest only repayment |
| unprecedented business levels. | | | | vehicle for affordability but they have been so |
| Halifax, Bank of Scotland Mortgages, Bristol & | | | | disgusted with the whole process that they have |
| West Mortgages, Intelligent Finance and Newcastle | | | | decided to emigrate to Australia!!. |
| BS have also restricted the range of products that | | | | So what should you be looking for from a Lender. |
| they now have on offer. | | | | 1) Some lenders are now applying an upfront non |
| "This news will be another blow for mortgage | | | | refundable application fee generally £100. If |
| borrowers, as not only do they now have a more | | | | your Loan to Value is quite high (above 75%) be |
| restricted choice, but the insecurity in the money | | | | very very wary of paying anything upfront as when |
| markets has caused many lenders to increase their | | | | they come to do the valuation you may not qualify |
| mortgage rates. | | | | for their products and you will loose your money. |
| "If more lenders decide to take the same stance and | | | | 2) Do lots and lots of research. Use the comparison |
| withdraw their range on a temporary basis, it is likely | | | | sites such as to find what look like good deals that |
| to cause a bottleneck for the remaining lenders. | | | | fit your requirements. |
| "As the pressure on these lenders increases, service | | | | 3) Then go to the lenders sites and recheck your |
| is likely to suffer. As a result we may see further | | | | research. Make sure you read all the facts and figures |
| lenders being forced temporarily to withdraw their | | | | prior to making an application |
| range. | | | | 4) Try to get a realistic valuation of your property. |
| "Coupled with the liquidity problems in the markets, it | | | | Contact at least 3 local estate agents and get 3 |
| may be that we see further increases with this | | | | valuations done. Tell them you need a quick sale to |
| phenomenon in other aspects of lending, such as | | | | get a valuation somewhere near what the lenders will |
| loans and overdraft rates. | | | | value you it at. |
| "It appears that lenders are slowly turning the tap | | | | 5) Then go to the Land Registry. Here you can look |
| off on the number of mortgage products available | | | | up how much properties have sold for recently. Be |
| and their appetite to lend. If the problems continue | | | | aware though that these figures are historic so allow |
| we have to start asking the question, will the tap will | | | | for further reductions on these prices. |
| be turned off completely until stable markets return?" | | | | 6) If you do make an application to a lender and |
| So what does this mean for the average house | | | | they send out a valuer make sure that they come to |
| buyer or the home owner who is coming off a fixed | | | | do the valuation when you are in. Do not accept a |
| rate deal and wants to re mortgage? | | | | drive by valuation. When the valuer comes round |
| The lenders who are still actively in the market and | | | | make sure you point out any improvements you |
| really tightening up on their lending criteria and even if | | | | have made, make sure you point out what other |
| you see some fantastic rates advertised very few | | | | properties have sold for in the last month and try to |
| people can actually get a mortgage. I have a client | | | | get the valuation as high as possible. |
| who had their house valued in March 2008 at | | | | 7) Be careful how many lenders you apply to this will |
| £167,000 for lending purposes, unfortunately | | | | show up on your credit score so choose wisely. |
| they didn't try to remortgage until September. They | | | | 8) If a rate seems too good to be true it probably is. |
| have had valuations done from two leading lenders | | | | Always look at the large well known lenders, if you |
| for Mortgage purposes and this what they came | | | | haven't heard of them don't go there. |
| back with | | | | |