As the UK economy remains in an official state of recession, homeowner loans increasingly appear to be the best option when considering lending.
The ongoing ‘credit crunch’ currently shows no indication of fully easing to pre-2007 levels, and attempting to obtain credit remains difficult. With banks still wary to lend, homeowner loan offers could well be the answer to your prayers …
Whats it all about? well it means great difficulty for people seeking to obtain credit facilities from financial institutions.
The lack of confidence in repayments leads to financial providers ‘tightening their belts’ as lending in general is considerably reduced.
So what caused the credit crunch?
- The global recession initially stemmed from poor lending decisions by financial institutions based mainly in the U.S.
- Sub-prime mortgages (high-risk mortgages offered to those whose credit status wouldn’t normally qualify for such lending) were offered in a ‘get rich quick’ format by American banks.
- These loans were then re-packaged as ‘investment opportunities’ and sold onto investors around the globe.
And what impact has it had on obtaining credit – specifically homeowner loans?
The U.K regulatory body, the FSA has massively tightened up regulations relating to lending, often, an intensely thorough assessment is required for unsecured lending in the form of loans, credit cards and finance agreements. This assessment usually takes credit scoring into consideration and uses a lot less practical judgement, It can, therefore, actually be significantly easier to obtain borrowings.
What’s the difference with homeowner loans?
As a responsible lender, rather than judging on face value and potentially misleading or incorrectly interpreted data, what we’re more interested in is lending responsibly – and fairly.
Demonstrating the commitment and ability to repay the loan, as well as establishing the appropriate amount of equity within a possible customer’s property is of far greater importance to us.