Mortgage Lenders For Bad Credit

The UK Mortgage Crunch
By Steve
Homeowners are coming under increased financial pressure, new figures indicate.

According to a study released by the Council of Mortgage Lenders (CML), payments made on mortgage interest over the course of October reached the highest peak recorded for more than 15 years. During the month, first-time buyers contributed just over a fifth (20.6 per cent) of their income towards mortgages, a slight increase from the 20.4 per cent noted in September and the uppermost point since 1991.

Meanwhile, consumers who are already on the housing ladder are paying 17.6 per cent of their salary, the largest proportion paid since 1992. As a result of making premium payments into mortgages, it could be possible that homeowners are experiencing problems in meeting other demands on their finances, such as utility bills, personal loans and credit card invoices.

The CML also pointed out that lending "remained strong" during the course of October, accounting for 33.5 billion pounds - a rise from 30.6 billion pouns during the same month in 2006. Further research from the firm indicated that those looking to take their first steps on to the housing ladder borrowed an average of 3.36 times their income in October, a fall from the 3.38 in September.

Existing homeowners, meanwhile, borrowed 3.02 times their salary - a figure unchanged for two months now. However, with the council stating that the majority of this lending was approved before the Northern Rock crisis and global credit crunch took full effect, it was suggested that borrowing via loans is set to be "more subdued".

Commenting on the data, Michael Coogan, director general for the CML, said: "October is the last month we expect lending volumes to be higher than a year ago as lenders and borrowers will behave more cautiously in an uncertain and slowing market environment.

Lenders have already responded to the credit squeeze by tightening lending criteria and increasing some loan costs. And looking ahead, any uncertainty in the housing market may mean that borrowers are less willing to stretch themselves   [This article related to Mortgage Lenders For Bad Credit continues below...]