After what feels like a long time in recession, lenders are still not keen to lend and before UK general election has ended, it doesn't feel just like very much is going to change.
Pre credit crunch times had a home loan market providing in excess of 25,000 different mortgage deals and loans galore, but today the UK markets have less than 5000 mortgage products on offer to the consumer.
Where did the credit crunch come from and could it happen again?
The US finance markets imploded in the 4th quarter of 2007 due to bad credit on the total amount sheets of large financial institutions, which ultimately caused what is known as a credit crunch.
In a credit crunch, lenders stop lending and start hoarding cash because they're 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 however the safest loans.
The UK economy have been flooded with accessible 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 buyer, 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 a simple one, YES!
If an appetite for investment in more risky markets returns, which you have to say it will, then pushing the limits commercially to get extra percentage market share and profit, could lead to the whole thing happening yet again. Having said that, it will require sometime to obtain there, as returning confidence to dabble by investors will be slow to return, but memories will return and the painful effects will soon be forgotten.
So, how may be the man on the road directly affected?
UK mortgage and loan lenders are releasing more new products on a daily basis and the very best mortgage deals of today are soon replaced tomorrow, but the very good news is that the deals are getting 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 well placed to search the market, compare mortgage rates on the client's behalf and secure an excellent mortgage rate to suit the borrower's exact needs. Besides finance, IFA's can provide a good value for money service if you are looking to source good quality, value for money, but cheap life insurance cover and pension plans, with advice that's specifically tailored to the average person or families needs.
Financial advice is available in many guises, the internet has led to a plethora of channels being designed for the consumer to utilise when seeking insight. Finance related price comparison websites have the added benefit of being truly a one stop look for all mortgage, loan and insurance needs. By completing https://thecardassociation.com , you have the benefit of using their services to trawl the market and find you the best deals available, but there is still a disagreement 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 plus some finance price comparison websites are actually offering both options under one roof to facilitate the needs of a far wider consumer group.