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What Effect Will The End Of The Recession Have On Secured Loans, Mortgages And Remortgages?



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By : Anil Latke    99 or more times read
The recession was to a large extent caused by the very lax laid back underwriting in the financial sectors which consists of all types of loans both private and commercial, remortgages, mortgages, etc.

The majority of the civilized world was involved in this reckless free for all lending, but America was most likely the major culprit with the UK a close second.

Many senior officials at banks, building societies and other lending institutions liberally advanced loans of all kinds, including secured loans to homeowners as well as mortgages and remortgages that they must have known the borrowers could never afford to repay , and the same was true with business loans.

Business loans were advanced, especially in the property sector, to developers and buy to let entrepreneurs many of whom would not have been considered for any form of loan at all in previous decades.

The lenders were not concerned so much about the clients ability to pay back the funds borrowed or by the future of their own companies which employed them as they were about their own personal bonuses.

The main aspect that was totally wrong was the acceptance of self declarations of income without asking for any proof of genuine earnings, and it was inevitable that the finance sector lending money was going to collapse and collapse it did and with a vengeance.

Inevitably secured loans, remortgages and mortgages fell as a result with secured loans falling by more than 80% of their 2006 level, and suddenly secured loan, lender after secured lender ceased trading, as did the vast majority of secured loan brokers including major homeowner loans brokers who had been trading with success for years.

Mortgage lending suffered as people choose to stay on in their current homes as they had no confidence in their employment status , and mortgages were further affected by the tightening up of loan to value especially as regards first time buyers who were required to put down at least 25% of the property value as a deposit and not many were in this sort of comfortable financial position.

Remortgages which used to be such a popular way for homeowners to move from one mortgage provider to another to obtain a better interest rate or to raise funds for almost any purpose declined.

Again the decline in the remortgage sector was in part due to the slump in property prices meaning that low remortgage rates were no longer available to as many as before, as low mortgage and remortgage rates depend largely on the equity of a property, and also declined due to the lack of confidence in the economy.

The financial situation did lead to one financial sector seeing an Increase in business and this was in the debt advice and debt management sector with Citizens Advice which is of course a free debt advice service struggling to cope with the volume of people seeking debt solutions.

Now that the recession is over it is to be wondered exactly what will now happen in the fields of secured loans, remortgages and mortgages.
Champion Finance has been arranging secured homeowner loans for more than twenty six years. They
also arrange remortgages and mortgages from the whole market. When you need a mortgage or a remortgagealways come to Champion Finance first. They also provide debt advice of all kinds including plans for debt consolidation.


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