Remortgage deals ‘difficult to obtain’
Borrowers with bad credit records will find it much more difficult to obtain a mortgage during 2008, a debt expert has predicted.
Paul Fletcher, director of the Repossessions Advice Centre, explained that problems in the global credit market have prompted many banks to adopt more cautious lending criteria.
The borrowers most likely to be affected by this change are those who need a poor credit mortgage, he continued, as lenders are now less inclined to deal with people who they view as potentially high risk.
Homeowners with a chequered credit history who managed to obtain a fixed-rate mortgage two years ago when interest rates were much lower could soon be faced with real problems, said Mr Fletcher.
"They're struggling to remortgage, because the lenders have just stripped out all the criteria of what they would accept. A lot of these people just aren't going to be able to get a new mortgage product," he explained.
As a result, these people will find their repayments rise steeply when their fixed-rate period ends, Mr Fletcher added.
Personal finance website Moneyfacts.co.uk recently reported that the number of sub-prime residential mortgage products on the market has fallen by 63 per cent since July.
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