Mortgage Lending Today
“What is happening to mortgage lending in this present credit crisis?”
The banks are still lending, but they are taking no risks. Applying for a mortgage will be a much longer process than it has been in the past. Banks are requiring proof of everything that you put in your application. In the past years, some of the information given to banks has been accepted without question, even to the point of the ‘no doc’ loans. Those days are gone.
If you are going to approach a bank for a mortgage on a further property, be prepared to be put through the hoops. Get all your financial information correct and up to date.
Over the last year many banks have restructured their loans, so make sure you completely understand any loans that you take on. Know any ingoing or outgoing fees, and any other penalties that are set up in the clauses of the loan.
Talk to a good mortgage broker and get them to discuss with you several loan offers so that you can make an informed decision. Even though banks are being tough, they are still looking for good clients. If you are going to refinance, check on any penalty fees from your existing mortgage.
If you are purchasing property, and to save a lot of headaches, it really does pay to get a pre-approved loan before you go out to buy. Not only does this save you a lot of headaches by not having contracts fall over, but it also gives you some very strong negotiating power because sellers do not want their contracts falling over, then maybe have to sit on the market for another 3-6 months.
Filed Under: Property Investment Tips
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