Is the Credit Crunch affecting Self Cert Mortgage Lending?
The credit crunch is affecting everyone and the pinch is very much taking hold of people up and down the country.
With the housing market hugely under fire, mortgages are very much being pinched. Lending criteria has been stepped up and 100% self cert mortgages or self cert mortgages offering large amounts of credit have been taken off the market and are a thing of a past.
Self cert mortgages have been affected quite a bit by the credit crunch, probably more so than any other type of mortgage and so when you are looking at getting a self cert mortgage now, you will find that there are fewer lenders on the market willing to help.
There isn’t a problem with self cert lending, but those offering self cert mortgages have been exposed to the sub-prime market. This has lead to a significant number of specialist lenders leaving the UK market or closing down that area altogether.
The criteria to get a self cert mortgage has also tightened across the market, so now only the most competitive rates are available to those with a deposit of 25% or more. Even with a deposit of 25% you will still pay a mortgage rate of around 7.5%.
A typical 25 year repayment mortgages of around £200,000 your monthly repayments would be £1,477.
There is a very competitive rate which gives 5.99% but is only available to those who have a 50% deposit and comes with a 2.5% arrangement fee, so if the mortgage is £200,000 you will pay £5,000.
For those who do not have 25% or more to put down, which is around £40, 000 or more, there are still a few deals where 80-85% are available. So as long as you have 15-20% to put down, you can get a larger self cert mortgage.
The key to getting a good self cert mortgage deal now is to seek a mortgage advisor who has access to the whole of the market and is going to be able to find the right self cert mortgage deal for you. If you want to know more about self cert mortgages and would like to speak to one of our Click n Go mortgage brokers, then contact us for advise on the market and how you can get onto the property ladder.
