Mortgage Lending Rate Slows
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Mortgage Lending Rate Slows
Summary
The growth in interest rates, coupled with rising housing prices and decreased disposable income, is squeezing new buyers out of the market and making it more challenging for current homeowners to upgrade, according to Howard Archer, Global Insights Chief UK and Global Economist. This trend is impacting home loans as rising inflation deters borrowing.Article
The current economic climate, marked by increasing interest rates and soaring house prices, is putting pressure on potential homebuyers while also making it harder for existing homeowners to upgrade. Howard Archer, Chief Economist for Global Insights, highlights this financial squeeze as a significant barrier in the housing market.Inflation's steady rise is discouraging homeowners from taking on new loans. Many are struggling with rising mortgage repayments, leading to a 30% surge in Individual Voluntary Agreements each year.
To manage financial difficulties, a significant number of homeowners are resorting to credit cards, which risks entangling them in a cycle of debt. This situation can damage credit scores and hinder future borrowing opportunities.
However, some homeowners have found relief through specialized mortgage brokers who offer remortgaging options for those with poor or negative credit. By leveraging the equity in their homes and benefiting from the average annual property price growth of 10%, these homeowners can access more funds than they realized.
These additional funds enable them to pay off debts and improve their credit ratings. The interest rates they negotiate with lenders are tailored to their financial situations, promoting better financial management.
Certain lenders even offer "payment holidays," allowing homeowners with remortgages to address immediate debts quickly. This approach helps them stabilize their finances, improve credit scores, and maintain solvency.
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