With all that is going on at present in the world of finance, the never ending news feeds of companies collapsing, panic over savings, governments having to finance and in some cases nationalise institutions, it will come as no surprise to the average house buyer that mortgages are harder to obtain than they were only twelve months ago.
125% loan to value has disappeared so far away it just seems like it was only a dream in the first place. 100% mortgages are a complete no no. 95% are difficult, to say the least, and to get one of these you have to have the credit file of a financial virgin.
I should take this opportunity to mention the phenomenon that is self certification. It is common opinion amongst many finance experts that this can be pinpointed for blame as the root of the current financial crisis and credit crunch. This isn't to say that self certification is entirely wiped out. It is still a possibility, it is just nigh on impossible to achieve. The gist of it is, the people who want it are those who are being refused it, and the people who can self certify have no need or desire to do so. And so it is in times of hard lending. The "have nots" can't have and the "haves" don't need.
So all that said you are probably reading this thinking "I don't really want to know what I can't have", you are probably thinking "What can I have and how?" Good question and one I will endeavour to cover in this article.
As with some other aspects of finance, mortgage advice has been seen as somewhat complicated and this was understandable give the range of products on offer to potential buyers. But with the removal of about 80% of the products available the process has been made a lot simpler.
The first thing you need to know is Equity is King, long live Equity! The less you have to borrow against the value of the house the easier you will find it getting a mortgage and that even means a self certification mortgage. Yes, even these can be easy mortgages to obtain if you have enough equity.
The second major element to getting a mortgage in this economic climate is income. OK we have talked about self cert, but ignoring that for a minute, if you have a very good income then lenders will lend to you, simple as that. The better your overall income is, the better you will find your chances are of getting a mortgage.
The final piece of the mortgage puzzle lies in your credit rating. Having a clean credit sheet is often the only thing blocking the path to a good low rate mortgage deal. If you have never missed a loan payment, or mortgage payment, or credit card payment, you are off to a good start. Having outstanding credit is fine, as long as it is paid on time and up to date. Without clean credit you will find getting a decent mortgage difficult at best, and whatever to find will probably be loaded with costs and clauses.
So if you can meet the above requirements you may be in luck, you may just be able to buck the market conditions and get yourself a decent mortgage in a market that is getting harder and harder to do what essentially a year ago was as easy as riding a bike, good luck.