After what feels as though a long time in recession, lenders are still not keen to lend and before UK general election is over, it doesn't feel just like very much will probably change.
Pre market meltdown times had a mortgage market providing more than 25,000 different mortgage deals and loans galore, but today the UK markets have less than 5000 mortgage products available to the consumer.
Where did the market meltdown come from and could it happen again?
The US finance markets imploded in the 4th quarter of 2007 due to bad credit on the balance sheets of large financial institutions, which ultimately caused what's known as a market meltdown.
In You can find out more , lenders stop lending and start hoarding cash because they are afraid of rising bad debts, resulting in bankruptcies and loan or mortgage defaults. They charge higher interest rates in a bid to stem the flow of business or reject all but the safest loans.
The UK economy had been flooded with accessible borrowed money because the mid 90's, however the market meltdown 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 spending money they didn't have, but could easily access on bank cards for expensive purchases such as for example luxurious holidays and smart cars.
The answer to could it happen again is really a simple one, YES!
If an appetite for investment in more risky markets returns, which you have to say this will, then pushing the limits commercially to gain extra percentage market share and profit, could lead to the whole thing happening yet again. Having said that, it will require sometime to get there, as returning confidence to dabble by investors will be slow to return, but good times will return and the painful effects will soon be forgotten.
So, how may be the man on the street directly affected?
UK mortgage and loan lenders are releasing more services on a regular basis and the best mortgage deals of today are soon replaced tomorrow, however 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 rate is out there found, if you know where you can look.
So how do Independent Financial Advisers add value?
Independent Financial Advisers (IFA's) are in a position to search the marketplace, compare mortgage rates on the client's behalf and secure a great mortgage rate to suit the borrower's exact needs. Along with finance, IFA's can offer a good affordability service if you're looking to source top quality, value for money, but cheap life insurance coverage cover and pension plans, with advice that is specifically tailored to the average person or families needs.
Financial advice comes in many guises, the web has led to various channels being designed for the consumer to utilise when seeking insight. Finance related price comparison websites have the added advantage of being truly a one stop shop for all mortgage, loan and insurance needs. By completing your details once, you have the advantage of utilizing their services to trawl the market and find you the very best deals available, but there is still an argument for using the services of a local for you, independent financial adviser. The IFA may take the time to understand any unusual circumstances that you will find and tailor their financial advice accordingly and some finance price comparison websites are now offering both options under one roof to facilitate the needs of a far wider consumer group.