Bad Credit Mortgage market tightens up

The UK bad credit mortgage market has tightened its belt this week making in increasingly harder for would be home owners with bad credit to find a mortgage.

With the global stock markets going into free fall over the past few weeks due to the Sub Prime (Bad Credit) Mortgage markets collapsing in America, UK lenders tighten their loan conditions with at least seven UK bad credit mortgage lenders raising their interest rates or withdrawn their bad credit mortgage ranges completely.

In the past it has been possible to get a mortgage with a bad credit history as long as you have not been bankrupted.
According to the magazine Money Marketing, lenders including GMAC-RFC, Unity Homeloans, Infinity Mortgages, Mortgages plc, Preferred, and DB Mortgages have raised their borrowing rates, or withdrawn their bad credit mortgage deals totally. Some lenders have postponed the relaunch of their bad credit mortgage ranges too.

In the USA Capital One withdrew totally from the Mortgage Broker Market, shutting down its operation completely. In the past 9 months nearly 120 mortgage lenders have closed, gone bankrupt or been sold off to the highest bidder; that’s around three a week. This is also having a huge effect on the unemployment market with thousands of people losing their jobs. So
UK lenders have not been as careless as the USA market, but some pundits think there is going to be problem in the UK once the higher interest rates kick in and people with bad credit histories find it more difficult to keep up payments.

This also could affect the housing market, with less people being able to find themselves a mortgage to buy a today’s inflated prices, could see a fall in house prices and new mortgages.