After what feels as though an eternity in recession, lenders remain not keen to lend and until the UK general election is over, it doesn't feel like very much will change.
Pre credit crunch times had a home loan market providing more than 25,000 different mortgage deals and loans galore, but today the united kingdom markets have significantly less than 5000 mortgage products available to the consumer.
Where did the credit crunch come from and could it happen again?
THE UNITED STATES finance markets imploded in the 4th quarter of 2007 because of bad credit on the total amount sheets of large financial institutions, which ultimately caused what's known as a credit crunch.
In a market meltdown, lenders stop lending and begin hoarding cash because they're afraid of rising bad debts, leading to 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 have been flooded with easy to access borrowed money since the mid 90's, but 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 buyer, who had become used to freely extra cash they didn't have, but could easily access on credit cards for expensive purchases such as for example luxurious holidays and smart cars.
The solution 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 it will, then pushing the limits commercially to get extra percentage market share and profit, may lead to the whole lot happening all over again. Having said that, it will take 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 is the man on the street 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, however the 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 rate 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 match the borrower's exact needs. As well as finance, IFA's can offer a good value for money service if you are looking to source top quality, value for money, but cheap life insurance cover and pension plans, with advice that is specifically tailored to the individual or families needs.
Financial advice comes 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 advantage of being a one stop look for all mortgage, loan and insurance needs. By completing your details once, you have the advantage of using their services to trawl the market and find you the best deals available, but there is still an argument for utilizing the services of an area for you, independent financial adviser. https://redfynn.com/partner/">dual pricing merchant services can 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 now offering both options under one roof to facilitate the needs of a far wider consumer group.