After what feels like an eternity in recession, lenders are still not keen to lend and before UK general election is over, it doesn't feel like very much will change.
Pre credit crunch times had a mortgage market providing in excess of 25,000 different mortgage deals and loans galore, but today the UK markets have less than 5000 mortgage products available to the consumer.
So where did the credit crunch come from and may it happen again?
THE UNITED STATES 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 credit crunch.
In a credit crunch, lenders stop lending and start hoarding cash because they're afraid of rising debt, 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 because the mid 90's, but the credit crunch meant that tightened credit would spell trouble for companies who needing funding in the form of loans to pursue their business plans and the consumer, who had become used to freely extra cash they didn't have, but could easily access on bank cards for expensive purchases such as 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, that you've to say this will, then pushing the limits commercially to get extra percentage market share and profit, could lead to the whole lot happening yet again. Having said that, it will take sometime to obtain there, as returning confidence to dabble by investors will undoubtedly be slow to come back, but memories will return and the painful effects will be forgotten.
So, how is the man on the street directly affected?
UK mortgage and loan lenders are releasing more new products every day 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 found, if you know where you can look.
Just how do Independent Financial Advisers add value?
Independent Financial Advisers (IFA's) are in a position to search the marketplace, compare mortgage rates on their client's behalf and secure a great mortgage rate to suit the borrower's exact needs. In Click here for more info to finance, IFA's can offer a good affordability service if you're looking to source good quality, affordability, but cheap life insurance cover and pension plans, with advice that is specifically tailored to the average person or families needs.
Financial advice comes in many guises, the internet has led to various channels being designed for the consumer to utilise when seeking help and advice. Finance related price comparison websites have the added benefit of being a one stop look for all mortgage, loan and insurance needs. By completing your details once, you have the benefit of utilizing their services to trawl the marketplace and find you the very best deals available, but there is still a disagreement for utilizing the services of an area to you, independent financial adviser. The IFA can take the time to comprehend any unusual circumstances that you will find and tailor their financial advice accordingly plus some finance price comparison websites are now offering both options under one roof to facilitate the requirements of a far wider consumer group.